This announcement contains inside information for the purposes of Article 7 of the UK version of Regulation (EU) No 596/2014 which is part of UK law by virtue of the European Union (Withdrawal) Act 2018, as amended ("MAR"). Upon the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.

16 September 2025

Touchstar plc

(the "Company", "Touchstar" or the "Group")

Interim results for the

Six months ended 30 June 2025

"Results in line with management expectations.

Significant transformation of the business in progress under new leadership"

Touchstar plc ((AIM: TST), a supplier securing the logistics of people and product to a variety of industrial sectors, is pleased to announce its interim results for the six months ended 30 June 2025 ("H1 25" and "Period").

Key Financials

* Refer to note 3 for definition

** adjusted for £21,000 exceptional costs. Refer to note 5 for details

*** includes booked recurring revenue

·      Order book at Period end up 11% year-on-year to £2,520,865

·      2025 results are expected to be second half weighted due to timing of major installations

·      Recurring revenue accounted for 45% of total revenues

·      Gross margins impacted by increases in direct salary costs, NI tax rises and product mix

·      Balance sheet remains strong with net cash of £2 million and £260,000 cash generated in the Period

·      Increased investment in sales, technology and marketing impacted short term profitability

·      Dividend increased 17% to 1.75p per share

Operational Highlights

The opportunity for Touchstar is to rapidly establish itself as the leading partner in secured logistics for customers, people and products. To achieve this ambition, the Group has commenced a comprehensive restructuring of its business designed to drive efficiency, collaboration, focus, ownership and consistency - laying a strong foundation for sustainable growth. These measures reflect the Board's ambition and include:

·      Lynden Jones appointed CEO to lead the transformation and growth of the business

·      Production processes streamlined to improve efficiency

·      Software development roles migrating from India to Manchester

·      Sales team restructured to improve customer engagement and enable cross-selling

·      Analysis of acquisition targets underway to accelerate growth

·      Identifying the next-generation product set that meets our brand promise

·      Enhanced website and refreshed marketing materials to reinforce brand presence and deepen local engagement

Commenting, Ian Martin, Chair of Touchstar, said:  

"Today, we are not only announcing our interim results but also beginning to unveil a more ambitious strategy, positioning the Company as a leading partner in the secured logistics of people and products. Under new leadership, there is renewed purpose, energy and determination to deliver on this vision.

"In 2025, our focus is on strengthening the foundations of the business and enhancing its growth prospects. We expect this phase of transformation to be substantially completed by the year end.

"The Board expects a stronger second half, with full-year performance anticipated to be  in line with expectations. Demand for our products and services continues to be strong. That said, much remains to be done. Transformation is rarely linear; there will be challenges along the way. Nevertheless, we are making strong progress, and I remain optimistic for the future of the Company."

For further information, please contact:

Information on Touchstar plc can be seen at: www.touchstarplc.com

Chairman's Report

Overview

In February, the strategic review announced by the Company in September 2024 was concluded. The Board determined that, at that time, the best interests of shareholders would be served by the Company remaining a standalone AIM-quoted entity.

Following this, the Board set out a plan to build on the Group's operational and financial performance, with a series of measures aimed at accelerating its next stage of development, increasing the underlying value of the business, and enhancing returns to shareholders. These measures include:

·    Driving stronger organic growth through further investment in the fuel delivery business in overseas markets and building on the ability of the Group's technology platform and solutions to be applied in a wider range of vertical sectors;

·      Changes to the management team to facilitate the execution of the plan;

·      Increasing the Company's marketing and promotional activities; and

·     Returning surplus cash to shareholders via dividends and deploying it to enhance underlying value through a recommencement of share buybacks.

The Board is delighted to report that progress has been made in all these areas, most notably with the appointment of Lynden Jones to the Board in March and his subsequent appointment as CEO in June 2025.

It has become clear during the Period that to achieve this scale of progress and ambition, the Group must embrace transformation that is radical rather than evolutional. That transformation is now firmly underway under Lynden's leadership.

Touchstar is currently best known for its work in the fuel industry. While this is a profitable sector, it represents a relatively small market in terms of that Touchstar can service. The Group's solutions, however, are highly adaptable and capable of serving a much broader set of industries.

Accordingly, the Company is repositioning how the business is presented and marketed. The goal is to establish Touchstar as the partner of choice to all depots, warehouses and retailers, a market opportunity many times greater than our historic roots. The Company will build on the trust its customers already have in place, broaden its engagement by offering more of the solutions, and leverage its skills and expertise to deliver a one-stop solution.

Under the Touchstar name, and through its two principal offerings, the Company intends to be known as the supplier who can "Secure the Logistics of People and Product".

Financial Results

Touchstar has delivered satisfactory results for the period, in line with management's expectation. The Company previously highlighted that the FY 25 results would be second half weighted, the order book rising by 11% year on year gives validity to this statement. The comparison to the prior year was expected to show a year in transition and would not reflect the tremendous progress made in improving the organisation.

Revenue in the Period decreased slightly to £3,365,000 (H1 24: £3,377,000). This is due to the larger petrochemical distribution installations being predominately weighted in the second half of 2025 in comparison to last year, thereby reverting to the traditional seasonal pattern.

Growth of 2.5% in recurring revenue softened the overall rate of decline in total sales.  For H1 25 recurring revenue was £1,533,500, representing 45% of total sales (H1 24: 44%). The business strategy is still to build the level of recurring revenues in both absolute terms and in relation to total sales. Recurring revenue growth in the year to date has been constrained by delays in installations seen in 2024, which in turn postponed go-live dates and in turn the recognition of deferred revenue. These timing impacts have temporarily softened the trajectory, but the underlying progress remains unchanged.

Although gross margins remained at a healthy level, they declined by 410 basis points to 55% in H1 25 (H1 24: 59.1%).  This reduction is due to three factors: an increase in direct salaries (a combination of additional resource, salary increases and an increase in employers NI costs), product mix and an increase in the UK R&D head count as the Group on shores software development.

These factors resulted in administrative costs rising by £259,000 or 15% to £2,012,000 in H1 25 (H1 24: £1,753,000). Although vital for the long-term development this increase, combined with the decrease in revenue, has led the Company to record a loss before tax in the H1 25 of £142,000 (H1 24: £254,000 profit).

A tax credit of £43,000 (H1 24: charge (£23,000)) resulted in a more modest loss in H1 25 on a post-tax basis of £99,000 in H1 25 (H1 24: £231,000 profit).

This equates to a basic loss per share of 1.22p per share in H1 25 (H1 24 earnings: 2.82 p). 

The Company had an exceptional charge of £21,000 in the period relating to a director's severance cost (H1:24 nil), which, if excluded, results in an adjusted loss per share of 0.96p on a post-tax loss of £78,000.

The Company bought back 24,161 shares in the Period (H1 24: nil) pursuant to its share buyback programme which commenced in May 2025. The total number of shares with voting rights as at the Period end was 8,176,116 (H1 24: 8,200,277).

Adjusted EBITDA* declined in H1 25 to £235,000 (H1 24: £589,000).

The interim ordinary dividend of 1.75p per share will be paid on 20 November 2026 to shareholders on the register on 24 October 2025. The ex-dividend date will be 23 October 2025.

Spending on R&D increased as further investment was made into our technology and services. In H1 25 we invested £349,000 in R&D (H1 24: £283,000). In FY25 we are budgeted to spend £770,000 in R&D updating and enhancing our existing product portfolio, a 29% increase on the 2024 level of investment.

The balance sheet remains strong. Cash and cash per share were higher with the operations generating positive cash flow of £260,000.

 The order book, rose by 11% to £2,520,865 at the period end (H1 24: £2,275,733).

Current Trading and Outlook

The Board expects a stronger second half, with full-year performance anticipated to be in line with expectations. That said, much remains to be achieved to deliver that outcome. Transformation is not a smooth or linear process; there will inevitably be challenges along the way. We must navigate increased costs, the short-term impact of investing ahead of revenue growth, and a higher burden from taxation all at a time of flatlining in the UK economy.

The key objectives for 2025 are, by the year end, to:

·      Complete the transition to the next-generation management team

·      Restructure the internal organisation to support stronger organic growth and the integration of future acquisitions

·      Repositioned the business to serve the wider depot, warehouse and retail markets

·      Enhanced our market profile through an improved digital presence, communications and marketing

·      Finalise improvements in sales capability

·      Conducted a detailed review of acquisition opportunities

·      Define the next-generation product set aligned with our brand promise

·      Clearly articulate our future direction to external stakeholders

In relation to share buybacks, the Board has decided to bring the formal programme to an end with effect from the end of September. Thereafter, buybacks will be considered on an ad hoc basis.

Success will depend on our ability to win new sales, strengthen our brand and digital presence, expand into new markets and broaden our offering to existing customers. At the same time, the Board will consider select acquisitions to bridge any product gaps, strengthen the Group's market position, and give it the best platform for long-term success. With the renewed ambition and refreshed strategy, the Board is confident of the outlook of the business.

I Martin

Executive Chairman

15 September 2025

Unaudited consolidated income statement for the six months ended 30 June 2025                                                        

Earnings per ordinary share (pence) attributable to owners of the parent during the period: