By Ian Walker
Shares in Starcom PLC rose as much as 33% on Friday after the company said that it has raised 450,000 pounds ($620,730) via a premium share subscription and will use the money toward its new business pipeline as well as for potential new contracts.
The remote-tracking technology company said it has issued 36 million new ordinary shares at 1.25 pence each, a 34% premium to its closing price of 0.93 pence on Thursday.
Starcom said the shares are being subscribed for by several unnamed new investors.
Shares at 0916 GMT were up 0.28 pence, or 30%, at 1.20 pence having peaked at 1.24 pence earlier in the session.
The company said it is in talks over some potential new contracts that, if they proceed, could provide significant revenue over the next few years.
While cautioning that there is no certainty the discussions will lead to any actual contracts, Starcom said certain potential clients have indicated their desire to reach an agreement with the company and that the board is hopeful to agree to one or more before the year-end.
Starcom also said the board has been reviewing the company's market positions and will now start a rebranding of its products with a view to increasing its global marketing plans. The board is also thinking about changing the company's name to reflect any new branding.
The company said it still expects the second half of the year to improve against the first half, but a lot depends on the timing of any new contracts.
Starcom said it has been affected by the current supply-chain issues which has delayed some orders for customers.
These delays affect cash flow projections but the company is working to mitigate this as much as possible, it said, adding that the new funds will go toward boosting its working capital.
rite to Ian Walker at ian.walker@wsj.com
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