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

Touchstar plc

Results for the year ended 31 December 2025

2026 is expected to be a pivotal year, with a stronger pipeline supporting the transition to a sustainable, growth‑oriented model. 

The Board of Touchstar plc ((AIM: TST) "Touchstar", the "Company" or the "Group"), suppliers of mobile data computing solutions and managed services to a variety of industrial sectors, is pleased to announce its results for the twelve months ended 31 December 2025 ("FY25" and "Period").

Key Financials

*Excludes exceptional costs of £1,393,000 (note 5)

 (2024: exceptional costs £57,000).

Highlights

·           2025 delivered a resilient underlying performance, with breakeven trading before exceptional items (£2,000 operating profit; £56,000 PBT), despite a year of significant organisational restructuring and product portfolio review.

·           Exceptional non‑cash charges of £1.18m relating to the impairment of development assets, resulted in a statutory loss but do not impact liquidity or operational strength.

·           Recurring revenue increased over 5% to £3.21m, representing 47% of total turnover, reinforcing the conscious shift toward a more predictable, SaaS‑led model.

·           Cash remains strong at £2.34m, after funding dividends and share buybacks - demonstrating continued financial resilience and disciplined cost control amid significant inflationary pressure.

·           Order intake entering 2026 is materially stronger, with Q1 2026 intake exceeding all corresponding periods since 2021, supporting confidence in forward momentum.

·           2025 restructuring has strengthened the organisational foundation, creating two balanced divisions and embedding clearer accountability, positioning the Group for improved scalability and growth.

·           2026 is expected to be a pivotal year, with a sharper commercial focus, maturing development governance and a stronger pipeline supporting the transition to a sustainable, growth‑oriented model for future years.

Lynden Jones, CEO of Touchstar commented:

"The Group enters 2026 with a clearer organisational structure, a strengthened leadership team and a more focused strategic direction. The restructuring undertaken during 2025 has created two balanced divisions with improved accountability, enhanced cross‑selling potential and greater operational efficiency.

While challenges remain, we are confident in the forward direction of the business. The early signs are positive with trading for the first quarter of FY26 in line with expectations and order intake being ahead of the equivalent period in every year since 2021.The focus for the remainder of 2026 is disciplined execution, strengthening pipeline generation, maturing development processes, and building the commercial engine required for sustainable growth."

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

Chairman's statement       

In 2025, the Group focused on strengthening its foundations for future growth. Under the leadership of our new CEO Lynden Jones, the business has undergone a structured reorganisation designed to improve efficiency, cement collaboration, and embed greater accountability across all functions. While the costs of these changes have impacted our reported results for the year, they reflect the scale of transformation underway which will position the Group more strongly for the future.

Looking ahead, 2026, will be a pivotal year as we reshape the business. Our priorities are clear:

·      completing the transition to next‑generation management;

·      repositioning the Group to serve the broader depot, warehouse, and retail markets;

·      defining a next‑generation product range aligned with our brand and long-term strategy, and;

·      increasing market profile through stronger communication and marketing.

The Group is moving away from its historic dependence on upgrade‑related income and is instead positioning itself for longer‑term, sustainable growth. This involves strengthening our commercial foundations, broadening our routes to market, and embedding a more structured approach to customer engagement. It is a meaningful shift in how the business operates, and while the transition is still progressing, the momentum and direction are firmly aligned with our strategic ambitions.

We recognise that 2026 will remain a transition year, characterised by ongoing market uncertainty and opportunities driven by technology evolution, changing customer needs and a requirement to have operational efficiency. With increased investment and a sharper commercial focus, along with a disciplined approach to product and customer management, Touchstar is well placed to respond.

Dividend

The Board recommends a final ordinary dividend of 1.5p per share (FY24: 1.5p). Together with the interim dividend of 1.75p (FY24: 1.5p) paid in November 2025, this results in a total ordinary dividend for the year of 3.25p (FY24: 3.0p).

Subject to the approval of shareholders at the Annual General Meeting, the final ordinary dividend of 1.5p per share will be paid on 12 August 2026 to shareholders on the register on 24 July 2026. The ex-dividend date will be 23 July 2026.

Financial Results and Exceptional Items

Results for the year ended 31 December 2025 were in line with revised market expectations, albeit below original expectations.  Exceptional non‑trading charges of £1,393,000 comprising:

·      £215,000 for senior management reorganisation;

·      £1,181,000 impairment of software development costs; and

·      £3,000 credit for costs of strategic review.

The impairment has arisen as a result of the Groups new strategy and focus on product groups.

To provide clearer visibility of underlying performance of the business in FY25 the table below shows prior comparison inclusive and exclusive of the exceptional charges taken in 2025.

*Adjusted profit before tax excludes net exceptional costs of £1,393,000 (note 5) and share based payment provision £6,000 (note 8(b)).

Revenue declined slightly to £6,821,000 (FY24: £6,893,000), reflecting customer hesitancy amid economic uncertainty. Underlying costs (excluding exceptional costs) increased by 3% to £3,910,000, broadly in line with inflation. Including exceptional items, the Group reported a pre‑tax loss of £1,397,000 (FY24: £388,000 profit). Excluding exceptionals, the pre‑tax profit was £56,000. After tax, underlying profit (excluding exceptionals) declined by £55,000 from £366,000 in FY24 to £311,000, with adjusted EPS down by 0.64p to 3.83p.

The balance sheet remains strong, with year‑end cash of £2,338,000 (FY24: £2,918,000). Operating cash flow for FY25 was £736,000. During the year, £479,000 was returned to shareholders through dividends and share buybacks, with 278,583 shares repurchased at an average price of 77.5p. This reduced the voting share capital to 7,921,494 and increased the number of shares being held in treasury to 553,583 shares.

EBITDA

The Group's EBITDA for the year is summarised below, presented on a reported and adjusted basis:

*Adjusted profit before tax excludes exceptional costs of £1,393,000 (note 5) and share based payment provision £6,000 .

Historically, the Group has capitalised both internal (salaries) and external (contractor) development costs where management considered that the investment would generate future revenue, amortising these costs over a four‑year period. As a result, the Group's EBITDA calculation was significantly higher than the operating profit, because capitalised development expenditure was excluded from EBITDA while amortisation was added back.  Following the strategic review earlier in the year and findings thereon, a full assessment of the Group's development activity, product roadmap and market positioning was completed in November 2025.  The review identified that some existing capitalised development costs no longer met the recoverability requirements, leading to an impairment. It further established that future development work would generally not satisfy the recognition criteria for capitalisation unless it related to new products or clearly defined enhancements.

The combined effect of the revised capitalisation spend, the change in useful economic life, and the impairment is a structural reset of the Group's EBITDA profile. Historically, EBITDA was higher because of:

•           high levels of capitalised development expenditure, and

•           significant amortisation add‑backs.

Under the revised model, moving forward EBITDA will now more closely reflects the Group's operating cash performance, with materially lower capitalisation and lower amortisation.

This is explained further in the Statement from the Chief Executive Officer along with note 9.

This revised policy provides a more transparent and comparable measure of performance, giving a clearer view of underlying profitability and aligning the Group with common practice across software and technology‑enabled businesses.

Outlook

The Group enters 2026 with a clearer organisational structure, a strengthened leadership team and a more focused strategic direction. The restructuring undertaken during 2025 has created two balanced divisions with improved accountability, enhanced cross‑selling potential and greater operational efficiency.

The Board anticipates a return to revenue growth and profitability in 2027, supported by:

- increased market activity across logistics, fuel distribution, warehousing and access control;

- expansion into targeted overseas markets, including the Nordics and Baltics; and

- the ongoing shift towards SaaS and multi‑year recurring revenue contracts.

The Board remains confident in the Group's long‑term prospects, supported by a strong product portfolio, a loyal customer base, a committed workforce and a clear strategy for sustainable growth.

I Martin

Chairman

6 May 2026

Statement from the Chief Executive Officer

2025 marked the beginning of a structured transition for Touchstar as we moved to address long‑standing commercial, operational, and product‑related challenges. The business is shifting from a historic reliance on upgrade‑driven revenues toward a more proactive, sustainable commercial model built more on new business generation, cross‑selling, and disciplined customer lifecycle management. This represents a significant cultural and operational shift, and while early‑stage challenges remain, the direction of travel is clear and positive.

Commercial Performance

With the enhanced placement of a project delivery team, the sales team can focus on the next requirement sooner resulting in more sales time. Order intake for the first quarter of 2026 was in line with expectations and ahead of first quarter intake for all years since 2021. This is encouraging given how fragile customer confidence has been and remains.

Our goal is to rachet up the pipeline coverage to a level that supports a higher growth rate and builds greater resilience into our revenue forecasts. Our goal is to more aggressively manage the sales pipeline ensuring the gestational period is kept as short as possible from quote to order.

Operational Delivery and Product Development

Development remains the most significant operational area requiring improvement. The backlog-comprising defects, enhancements, technical requirements, and internal product ambitions-is extensive and is now being fully catalogued and prioritised.

Key actions underway include:

- establishing a clear order of priority aligned to generating revenue and maximising customer benefit;

- reducing reactive development activity;

- improving the quality of product releases through a reduction in the frequency of releases; and

- ensuring customers are migrated to current software versions to reduce legacy burden.

A newly appointed Product Delivery Manager is already improving structure and visibility, though the function remains in early‑stage transition.

Customer Lifecycle and Renewals

The business has made strong progress in reducing exposure to legacy products, with only two customers remaining on legacy hardware platforms. Both are engaged in upgrade discussions, and no material revenue is currently at risk.

Renewal performance remains robust. Work is underway to evolve renewals from an administrative process to a strategic lifecycle engagement model, supported by a complete customer lifecycle database and alignment with the product roadmap.

Sales Execution and Resourcing

Sales execution remains in transition. Pipeline quality and cross‑selling activity require improvement, and lead‑generation metrics are still being embedded. However, early indicators are positive, with improved discipline, stronger communication, and greater ownership of performance across the team.

Recruitment plans remain aligned to strategy but are intentionally phased to ensure stability. Internal sales hires are planned for late Q2, and the Fire & Security northern sales role has been approved but not yet initiated.

Overseas Strategy

The overseas channel is progressing from exploratory engagement to early‑stage development. Initial partner discussions have advanced to a more strategic level, with negotiations underway regarding solution structure and customer ownership. Tangible progress is expected by late Q2 or early Q3.

Outlook

Touchstar is in a period of controlled transition, addressing historic structural weaknesses across sales, development, and customer management. The need for revenue growth is clearly understood and actively managed, and the shift toward a proactive, accountable sales culture is underway. Development governance is improving, customer lifecycle risk has reduced significantly, and renewal performance remains strong.

While challenges remain, we are confident in the forward direction of the business. The early signs are positive with trading for the first quarter of FY26 in line with expectations and order intake being ahead of the equivalent period in every year since 2021. The focus for the remainder of 2026 is disciplined execution, strengthening pipeline generation, maturing development processes, and building the commercial engine required for sustainable growth.

I would personally like to thank all my colleagues across the business for their continued hard work, professionalism, and commitment to excellence. It is the consistent effort of individuals-whether operating in customer-facing roles or supporting functions internally-that underpins the Company's performance. Those engaging directly with customers continue to represent Touchstar with integrity and professionalism, reinforcing our reputation in the market, while our internal teams maintain the operational strength and discipline required to deliver at scale. As the business evolves, it is important to emphasise that recent changes reflect a clearer articulation of who we are and how we present ourselves externally, aligned under our unified strapline, "securing the logistics of people and product." While there have been some departures during this period, we remain focused on supporting those who continue with the business. Their resilience, adaptability, and willingness to take ownership are driving accelerated personal development and ensuring continuity of performance as Touchstar moves forward with clarity and purpose.

L N Jones

Chief Executive Officer 

6 May 2026

EXTRACTS FROM THE STRATEGIC REPORT

Business Review and Principal Activities

The Group supplies, installs and maintains licensed software applications and hardware solutions for mobile applications in the transport, logistics, warehousing, fuel distribution and access control industries. Our solutions combine in‑house developed software, rugged mobile computing hardware and managed services to deliver complete, integrated systems that enhance operational efficiency, compliance and customer service for our clients.

During 2025, the Group continued to develop and enhance its product portfolio, with a particular focus on strengthening cloud‑based platforms, expanding SaaS capability and improving the performance and usability of our hardware devices. The Group operates under the Touchstar brand, providing consistent brand awareness and a cohesive market presence across all operating companies.

A key development during the year was the restructuring of the business into two balanced divisions, designed to improve operational focus, enhance cross‑selling opportunities and support the Group's long‑term growth strategy. This restructuring has strengthened the organisational foundation and positioned the Group for improved scalability and market penetration.

Key Performance Indicators

The Group uses a range of financial and operational key performance indicators (KPIs) to monitor performance, assess progress against strategic objectives and support effective decision‑making. The KPIs reflect the Group's focus on sustainable growth, recurring revenue expansion, operational efficiency and long‑term value creation.

Revenue

Total revenue for the year was £6,821,000 (2024: £6,893,000). Revenue remained broadly stable despite a more cautious economic environment and slower customer decision‑making cycles. The Group continues to prioritise high‑quality revenue streams, particularly those linked to recurring income and multi‑year contracts.

Gross Margin

Gross margin for the year was 57.6% (2024: 60.2%). While slightly lower than the prior year, the margin remains robust and reflects the strength of the Group's in‑house IP, managed service offering and disciplined pricing strategy. Margin performance continues to be a key indicator of product mix, operational efficiency and the value delivered to customers.

Recurring Revenue

Recurring revenue increased over 5% to £3,209,000, representing 47% of total turnover (2024: £3,051,000; 44%). This remains one of the Group's most important KPIs, reflecting the continued transition to a SaaS‑led model and the growing proportion of predictable, contracted income. The increasing proportion of predictable, contracted revenue provides a stable platform for future investment and supports the Group's transition towards a more scalable, software‑led business model. The Board remains committed to further strengthening this revenue stream as a strategic priority.

Order Intake

Order intake for the year was £3,651,000 (2024: £4,867,000). The reduction reflects slower order pipeline conversion in the first half of the year and the timing of larger capital projects. Order intake remains a key indicator of future revenue visibility and market activity.

Intake for the first quarter of 2026 was in line with management expectations and exceeds that in all corresponding periods since 2021.

Order Book

The order book at 31 December 2025 was £876,000 (2024: £1,270,000). While lower than the prior year, the pipeline entering 2026 is materially stronger, supported by enhanced product capability, increased cross‑selling opportunities and a more focused divisional structure.

Operating Profit Before Exceptional Costs

Operating profit before exceptional costs was £2,000 (2024: £408,000 profit). This KPI provides a clearer view of underlying trading performance, excluding non‑recurring items such as impairment charges and restructuring costs. Even with the impact of inflation on costs, the breakeven position reflects disciplined cost control during a year of transition.

Cash and Liquidity

The Group ended the year with cash of £2,338,000 (2024: £2,918,000), despite spend on product development (£658,000), payment of dividends (£264,000) and execution of share buybacks (£215,000). Cash generation and liquidity remain key KPIs, underpinning the Group's ability to invest in growth and maintain financial resilience.

Employee Retention and Engagement

The Group continues to benefit from a stable and committed workforce, with low attrition and long average tenure. Employee engagement, capability and retention remain critical KPIs, given the importance of technical expertise and customer service to the Group's success.

Order Intake and Order Book

Order intake for the year was £3,651,000 (2024: £4,867,000). The reduction reflects the slower pace of customer decision‑making across several sectors, particularly in the first half of the year, as well as the timing of larger capital projects.

The order book at 31 December 2025 stood at £876,000 (2024: £1,270,000). While lower than the prior year, the pipeline entering 2026 is materially stronger, supported by increased cross‑selling opportunities, enhanced product capability and a more focused divisional structure.

The Group's recurring revenue base continues to mitigate fluctuations in order intake, providing a strong foundation for future growth.

Business Environment

The Group's operations remain focused on the logistics, transport distribution, warehousing, fuel delivery and secure access control markets. Although these sectors serve different customer needs, the nature of the products, services and channels to market are comparable, and the Directors therefore continue to regard the Group as operating in one primary segment.

Activity levels across the sectors in which we operate remained steady during 2025, despite a more cautious economic backdrop. Customers continued to invest in technology to improve operational efficiency, compliance and safety, and the Group's ability to provide a complete, integrated solution across hardware, software and managed services remained a key differentiator.

The restructuring undertaken during the year has strengthened the Group's operational alignment and created two balanced divisions with clearer accountability and improved cross‑selling potential. The two divisions are known as IQ Logistics and Fire & Security with the strap line 'Securing the Logistics of People and Products'. This structure enhances our ability to deliver end‑to‑end solutions and increases the relevance of our offering across multiple industries.

Strategy

The Group's strategy is to deliver sustainable long‑term growth through a combination of product innovation, market expansion, operational efficiency and disciplined investment. The restructuring undertaken in 2025 has created a stronger platform from which to execute this strategy.

Strategic Priorities

- Strengthen recurring revenue through continued expansion of SaaS licences, multi‑year support contracts and managed services.

- Enhance product capability across both software and hardware, including the Back Office platform, ATEX and non‑ATEX devices, and next‑generation access control terminals.

- Expand market reach, with a focus on the Nordics, Baltics and selected US opportunities, supported by targeted marketing and partner channels.

- Increase cross‑selling between divisions to maximise customer lifetime value and improve solution penetration.

- Pursue selective acquisitions that complement the Group's product set, strengthen market position and accelerate growth.

- Improve operational efficiency through clearer divisional accountability, streamlined processes and enhanced use of technology.

Use of AI in Development

The Group continued to adopt AI‑enabled tools, including GitHub Copilot, to support software enhancements. These tools improve code quality, reduce development time and enhance security by identifying vulnerabilities earlier in the process. Importantly, all software developed using these tools remains the intellectual property of Touchstar.

Consolidated income statement for the year ended 31 December 2025

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

The exercise price of all share options granted at 31 December 2025 were below the average market share of ordinary shares during the period to 31 December 2025 and therefore deemed dilutive.

There is no other comprehensive income or expense in the current year or prior year and consequently no statement of other comprehensive income or expense has been presented.

All activity in 2025 relating to continuing operations.

The Company has elected to take the exemption under section 408 of the Companies Act 2006 not to present the parent Company income statement. The profit for the Company is detailed in the Statement of financial position and the Company statement of changes in shareholders' equity.