Starcom suffers fall in shares after profits hit

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Last updated: October 5, 2013 12:25 am

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By Bryce Elder
Starcom suffers fall in shares after profits hit by slow sales

Shares in Starcom, the Israeli maker of car tracking devices, fell after the Aim-quoted company reported a pre-tax loss of $89,000 for the six months to June 30 ? against a profit of $868,000 a year earlier ? and said profits for the full year would be lower than forecast, writes Kate Burgess.

Its half-year performance was attributed to slower sales of intelligent locks and monitoring devices, as well as higher marketing and R&D costs. The company also paid off a loan with the proceeds of its February flotation, and booked the expense of options granted to executives.

Michael Rosenberg, chairman, said the first two months of the year were affected by the IPO process, but the company had now received its
first big order for smart padlocks.


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Starcom (AIM: STAR), which specialises in the development of wireless solutions for the remote tracking, monitoring and protection of a variety of assets and people, is pleased to announce a non-exclusive distribution agreement with MAM Objects S.L, a telecommunications distributor with operations in South America which is also the exclusive distributor for a major global telecommunications company in the territory. The agreement, related to the distribution of the WatchLock, will see Starcom's award-winning device marketed and distributed throughout Central and South America with initial deployment in Ecuador and Colombia.

Starcom's CEO Avi Hartmann said:

"It is pleasing to see Starcom's global roll-out of its WatchLock device continue to gather momentum. Following the distribution agreement in the Ukraine earlier in the year, this agreement will see the WatchLock marketed in the fast developing Latin American market which we hope will result in significant sales of the product in the region. We continue to employ our strategy of working with distribution partners, as it offers us wide access to markets at a low cost point. Starcom looks forward to developing its Latin American presence, and expanding its market penetration into even more geographies in the future."


#3

Starcom (AIM: STAR), which specialises in the development of wireless solutions for the remote tracking, monitoring and protection of a variety of assets and people, is pleased to announce the official worldwide launch of the award-winning WatchLock high security padlock and electronic alarm system.

The Company has chosen the UK to be the first market for the launch, with the USA to commence in April and other territories to follow throughout the year. Starcom's team has completed a two day training workshop with the UK salesforce of Assa Abloy. A further positive development will be that Assa Abloy will now market the WatchLock under each of the Assa Abloy, Mul-T-lock and Yale brands, rather than just under the Mul-T-Lock brand, as has been the case to date.

Initial trials of the Watchlock commenced at the end of 2012 and were above management's expectations, resulting in over 20,000 units sold in 2013. Most of these units were sold directly through the Company rather than through Mul-T-Lock. The Directors of Starcom expect that the full implementation of the formal partnership with Assa Abloy, following the above mentioned training workshop, will have a positive impact on WatchLock sales going forward.

Avi Hartmann, CEO of Starcom, commented: "We believe that with the full support of Assa Abloy's world leading brands behind us we will see an increase in sales for our award-winning WatchLock. For a small company, entering a market of this size can only be achieved with a strong partner, and we know we have the best in Assa Abloy."

Micha Kimchi, CEO of Mul-T-Lock, commented: "The WatchLock is the winner of the 2012 IFSEC Innovation Award, and is a unique offering which combines top mechanical padlock security with an innovative GPS tracking and cellular communication device. It has been adopted by Assa Abloy EMEA as a high impact product, which we will be offering to all our high security brands in the UK market."

"Starting today, following the advanced training to the Mul-T-Lock, Yale and Abloy UK salesforces, all of our brands are set and ready to capture every opportunity in the market, though the locksmith and professional end-user channels."