TIDMFST
RNS Number : 7992V
Frontier Smart Technologies Grp Ltd
26 July 2018
THIS ANNOUNCEMENT CONTAINS INFORMATION WHICH, PRIOR TO ITS
DISCLOSURE, WAS INSIDE INFORMATION FOR THE PURPOSES OF THE MARKET
ABUSE REGULATION.
For immediate release 26 July 2018
Frontier Smart Technologies Group Ltd
('Frontier' or the 'Group')
Half Year Trading Update
Frontier (AIM: FST), a pioneer in technologies for Digital Audio
devices, announces the following trading update for the six months
ended 30 June 2018 ('H1-2018' or the 'period').
As stated in the Group's trading update issued on 23 May 2018,
the Group expects to report H1-2018 revenues of circa US$17.0
million (H1-2017: US$25.0 million) and EBITDA(1) for the period is
anticipated to be a loss of approximately US$2.1 million (EBITDA
H1-2017: US$1.4 million).
FY-2018 revenues are expected to be in line with the Group's
guidance given in May at approximately US$47.7 million, (FY-2017:
US$53.0 million) and full year EBITDA is expected to be c. US$1.0
million (FY-2017: US$2.6 million).
In May 2018, the Board implemented a range of measures to reduce
planned R&D and other overheads. These measures should deliver
savings in FY-2018 of about US$3.4 million.
As at 30 June 2018, the cash balance was US$3.4 million (31
December 2017: US$7.9 million) which translates to a net debt
position of US$3.2 million (31 December 2017: net cash US$4.0
million). This net debt figure is higher than the figure given in
the Group's May update (US$2.1 million) due to the short-term
timing of cash flows from other working capital balances. It is
expected that by the end of the year the working capital balances
will have returned to normal levels accompanied by a significant
reduction in net debt.
As previously reported, the reduction in H1-2018 revenues was
largely due to lower retail sales of DAB radios following the
completion of the FM switch-off in Norway in December 2017. This
was exacerbated by Frontier's customers holding excess stock at the
start of 2018 which adversely impacted Frontier's order book for
Q2-2018. This was a short-term situation caused largely by
overstocking by customers in Q4 2017. In recent weeks, Frontier's
radio sales orders have started to recover, and the Board expects
Frontier's Digital Radio revenues to normalise in H2-2018, before
returning to growth in FY-2019.
Smart Audio revenues in H1-2018 are expected to be up 19 per
cent year-on-year. As highlighted in May 2018, this growth is
slower than had been anticipated and reflects a delay in the uptake
of voice-enabled speakers from third party brands. The prospects
for FY-2019 and beyond are more promising. As the Smart Audio
sector expands and matures, the Board expects sales of third-party
branded products to increase, especially in the medium / higher
price point categories, where consumers are looking for greater
product differentiation. Frontier is well placed to address this
opportunity.
Anthony Sethill, CEO of Frontier Smart Technologies, said: "As
anticipated, trading conditions in the first half of the year have
been challenging, especially when compared to H1-2017 which was
significantly ahead of plan and our normal seasonality. I expect an
improved year-on-year performance in H2-2018, with our Digital
Radio and Smart Audio businesses both likely to achieve moderate
growth. Nevertheless, the H1-2018 results will have an impact on
full year revenues, and accordingly, we have reduced our cost base
and extended our debt facility.
We will continue to closely monitor the Group's financial
performance, whilst ensuring that we maintain our leadership in
Digital Radio and are well-positioned to address the emerging
opportunities in the Smart Audio and Smart Home sectors."
The Group expects to publish its half year results for the
period ending 30 June 2018 in September 2018.
(1) EBITDA means earnings before interest, tax, depreciation and
amortisation, non-cash share-based payments and non-recurring
restructuring costs.
- Ends -
For further enquiries:
Frontier Smart Technologies Group Ltd +44 (0) 20 7391 0630
Anthony Sethill, Chief Executive Officer
Jonathan Apps, Chief Financial Officer
N+1 Singer (Nominated Adviser and Broker) +44 (0) 20 7496 3000
Shaun Dobson / Ben Farrow
Buchanan (Financial Communications) +44 (0) 20 7466 5000
Henry Harrison-Topham / Steph Watson / FST@buchanan.com
Gemma Mostyn-Owen
Forward-looking statements
The information in this release is based on management
information. This announcement includes statements that are forward
looking in nature. Forward looking statements involve known and
unknown risks, assumptions, uncertainties and other factors which
may cause the actual results, performance or achievements of the
Group to be materially different from any future results,
performance or achievements expressed or implied by such forward
looking statements. Except as required by the AIM Rules and
applicable law, the Group undertakes no obligation to update,
revise or change any forward-looking statements to reflect events
or developments occurring after the date of this announcement.
Notes to Editors
The Frontier Smart Technologies Group is a pioneer in
technologies for digital audio devices. Customers include many
leading consumer audio brands: Bose, Denon, Grundig, harman/kardon,
Hama, JBL, Marshall, Onkyo, Panasonic, Philips, Pioneer, Pure,
Roberts, Sony, TechniSat, UrbanEars, Yamaha, and many more.
Established in 2001, the Group is headquartered in London, with
engineering, sales, marketing and operations teams in Cambridge,
Timisoara (Romania), Hong Kong, and Shenzhen. For more information,
see: www.frontiersmart.com
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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