Major retail deals sealed last year  are doing wonders for Fitbug's (FITB:AIM) wearable fitness kit sales. Like-for-like revenues jumped an eye-catching 495% to £1.4 million in the second half of 2014.

The £13.9 million cap says the strong second half reflects increased sales of its Orb fitness tracker in the final quarter. For that investors can doff their caps to landmark agreements with UK supermarket Sainsbury’s (SBRY) and US chain Target (TGT:NYSE).

Fitbug’s shares experienced a dramatic rally in the latter part of last year, soaring an impressive 5,272% in a month, as it announced deals with Sainsbury’s, Target, electronics giant Samsung (005930:KS), online retail giant Amazon (AMZN:NDQ) and US online consumer electronics retailer Best Buy (BBY:NYSE).

The excitement started to wane at the beginning of this year and the shares plunged 22% to 5p when Fitbug announced on 27 January that its trademark dispute against US rival Fitbit had been granted in Fitbit’s favour due to Fitbug’s delay in bringing the claim.

FITBUG HOLDINGS - Comparison Line Chart (Rebased to first)

Today’s positive trading update, which also shows a 310% increase in full year 2014 sales, sending the shares 26% higher to 7.3p, showing just how volatile the stock is, a factor investors need to be wary of.

The Camden-based group expects to post a full year loss of £3.6 million, in line with its forecasts, as increased investment in its Kiqplan digital health coaching platform offsets stronger product sales. This compares with a pre-tax loss of £2.6 million in 2013.

Fitbug says the development of new Kiqplans is progressing well and it expects to have eight available for retail sale – and connected with Apple Watch – by the start of April.

It says the reception from retailers, device partners and consumers for Kiqplan has been ‘really encouraging’ and it expects to make a series of announcements in the coming months as the ‘pipeline discussions are progressed to fruition’.

Orb is now featured in the Argos catalogue and will shortly go live on - sales had been delayed from January due to a switch to the company's preferred distributor. Fitbug has also hired Adidas’ former director of marketing Simon Breakell to push its marketing drive. It could be exciting times ahead.

Issue Date: 13 Feb 2015