StockMarketWire.com - Bagir posted wider annual losses as costs of developing manufacturing facilities in Ethiopia dented margins. The company also warned challenging conditions would likely to continue in the current year.

For 2018, pre-tax losses widened to $5.78m from $2.91m a year earlier and revenue increased 10% to $56.4m.

Revenue was driven by reflecting new client wins and increased purchase orders from certain existing customers.

The costs associated with developing the company's manufacturing facilities in Ethiopia, together with the transitional costs of moving production to more cost competitive manufacturing programs in Vietnam and Egypt in H1, affected gross margin for 2018 which decreased to 9.8% compared to 15.0% in 2017.

Sales in the three months ended 31 March 2019 were $16.3m, up from $11.2m a year earlier, and the company has an order backlog of $30.6m.

'2018 was undoubtedly a strategically important year for the business with significant progress being made rationalising the business operations. Looking ahead for 2019, trading conditions are likely to be similar to those experienced in 2018, however the Board believes that Bagir is well placed given the operational cost base reduction completed in 2018 and its strong order backlog,' the company said. At 8:48am: [LON:BAGR] Bagir Group Ltd share price was +0.2p at 1.4p



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