Touchstar Shares Slide Despite Swing to EBITDA Profit

Touchstar (LON: TST), the Manchester-based maker of rugged mobile computers and logistics software, saw its shares tumble today after a trading update flagged a weaker second half despite improved first-half profitability.

Shares fell as much as roughly 9-12% intraday to around 75-77.5p, down from Tuesday’s close of 85p.

The RNS trading update, covering the six months to 30 June, showed revenue flat at £3.4m, but adjusted EBITDA, a cash-profit proxy, swung to a £0.03m profit from a £0.24m loss a year earlier. The order book rose to £2.63m from £2.52m, and cash held steady at £2.0m. However, the board said H2 revenue would be slightly weaker than H1, citing cautious customer decision-making, even as it said the full-year loss should come in below current market expectations.

The pre-tax loss held at £0.1m, unchanged on H1 last year, underlining that the turnaround remains incomplete. Gross margin dipped to 46% from an adjusted 48%, reflecting a change in how development costs are accounted for rather than a trading deterioration. The restructuring behind the improvement included ending standalone development of the PODStar product line, appointing a new Head of Engineering, and redesigning the sales model, changes management says are still working through to revenue.

Chief executive Lynden Jones said: “I have previously said 2026 would be a transitional and pivotal year for the Group as we build a simpler, more capable and more scalable business and look to return the Group to profitability in 2027. I am pleased with our progress in H1 as we continue the transformation started in H2 2025 and expect further progress in H2.”

Touchstar’s December update had already flagged 2026 as transitional, with a return to full-year profitability targeted for 2027. Today’s fall came alongside the board’s cautious H2 guidance and the continuing pre-tax loss.