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Touchstar offloads struggling On-board business to director
2nd Dec 2019 11:26
(Sharecast News) - Transport and logistics data capture and mobile computing provider Touchstar has agreed the sale of the trade and assets of its non-core business, On-board Retail, to one of its directors Jon Hall, it announced on Monday.
The AIM-traded firm said the sale was for a consideration of £10,000, payable in cash on completion, plus 15% of the gross revenue of certain contracts between completion and the second anniversary of completion.
In addition, the company said it would be retaining deferred income received for certain On-board contracts, amounting to £75,000, and added that under the deal, it was agreed that Hall would stand down as a director, with immediate effect.
The firm said the On-board business previously sold and maintained software that facilitated the sales of in-flight duty-free, catering and ancillary products.
Its value was fully written off in Touchstar's accounts for the year ended 31 December 2018, and in the company's interim results in September, it was reported that On-board was effectively a discontinuing activity, and had been in run-off since.
For the year ended 31 December 2018, its contracts generated revenue of £0.7m, with the business having direct and attributable costs of around £0.8m.
Subsequently, revenue had declined "substantially", the board said, with current annual revenue derived from On-Board's contracts being £0.24m, with more than half of that value coming from contracts using old, legacy systems.
The sale of On-Board was not expected to have any material impact on the future profitability or cash generation of the group, the board confirmed.
"The legacy On-Board business has been a challenge for the group so we are delighted to be able to sell it and realise some value," said Touchstar chief executive officer Mark Hardy.
"Jon Hall has been with the group for over 23 years and on behalf of the board I would like to record its thanks to Jon for his many years of loyal and valuable service and wish him well for the future."
The AIM-traded firm said the sale was for a consideration of £10,000, payable in cash on completion, plus 15% of the gross revenue of certain contracts between completion and the second anniversary of completion.
In addition, the company said it would be retaining deferred income received for certain On-board contracts, amounting to £75,000, and added that under the deal, it was agreed that Hall would stand down as a director, with immediate effect.
The firm said the On-board business previously sold and maintained software that facilitated the sales of in-flight duty-free, catering and ancillary products.
Its value was fully written off in Touchstar's accounts for the year ended 31 December 2018, and in the company's interim results in September, it was reported that On-board was effectively a discontinuing activity, and had been in run-off since.
For the year ended 31 December 2018, its contracts generated revenue of £0.7m, with the business having direct and attributable costs of around £0.8m.
Subsequently, revenue had declined "substantially", the board said, with current annual revenue derived from On-Board's contracts being £0.24m, with more than half of that value coming from contracts using old, legacy systems.
The sale of On-Board was not expected to have any material impact on the future profitability or cash generation of the group, the board confirmed.
"The legacy On-Board business has been a challenge for the group so we are delighted to be able to sell it and realise some value," said Touchstar chief executive officer Mark Hardy.
"Jon Hall has been with the group for over 23 years and on behalf of the board I would like to record its thanks to Jon for his many years of loyal and valuable service and wish him well for the future."