AIM-listed aerospace services company Strat Aero saw revenues rise 17% in its last trading year, helping the firm narrow losses following a "fundamental change" to its business model.
Strat Aero cut losses 28% to $2.51m as revenues grew to $1.01m from the $862,988 reported by the firm twelve months earlier.
Its subsidiary, Aero Kinetics, also managed to reduce its sales expenses by $105,000, boosting the group's gross profit margin to 88.6% from the 68.7% recorded in 2017.
The Essex-based group saw administrative costs drop 16% to $3.51m, with the majority of savings coming as a result of cutting staff and consultancy costs in its non-value-added business areas.
Strat Aero made "considerable efforts" to reduce its debt throughout the year, including the settlement of $387,000 of outstanding debts with Russell Peck, a former director of the company and its US subsidiary and one of its largest creditors, and a renegotiation of its £300,000 loan with Farina Investments, which was settled in its entirety following the end of its trading year.
At the period-end, the firm was holding net assets of $992,389, which marked a considerable turnaround from the $43,517 of net liabilities it had on its books at the start of the trading year, and cash balances of approximately £550,000.
During the second half of 2017, it became clear to the group that a "fundamental change" in the cost base and business model of the group was required and, as a result, the firm raised a total of $1.28m through a placing and open offer in December 2017.
Strat Aero also claimed it had made further progress since the period-end, including the Geocurve survey and inspection business winning a significant £1.1m contract in February 2018 and the acquisition of a 37% stake in Gyrometric Systems, for a cash consideration of $320,000.
"Fixed costs have now been substantially reduced from those prevailing in 2017, and income at Geocurve and Gyrometric is on an upward trajectory. We are continuing to cut costs wherever possible. Strong new business prospects at Geocurve and Gyrometric allow all stakeholders to look to the future with renewed optimism," said chairman Nigel Burton.
As of 1330 BST, Strat Aero shares
had lost 11.23% to 0.058p.