We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Register for Free to get streaming real-time quotes, interactive charts, live options flow, and more.
| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Frontier Smart Technologies Group Limited | LSE:FST | London | Ordinary Share | KYG3730C1078 | ORD 10P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 25.50 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
TIDMFST
RNS Number : 0306S
Frontier Smart Technologies Grp Ltd
28 September 2017
For immediate release 28 September 2017
Frontier Smart Technologies Group Limited
('Frontier', the 'Group' or the 'Company')
Half-Year Results
Frontier Smart Technologies Group Limited (AIM: FST), a pioneer in technologies for Digital Audio devices, is pleased to announce its half-year results for the six months ended 30 June 2017.
Key Highlights
-- H1 2017 financial highlights:
o Revenues up 44% at GBP19.7 million (H1 2016: GBP13.7 million); up 27% on a constant currency basis
o EBITDA of GBP1.1 million (H1 2016: loss of GBP0.04 million)
o R&D expenditure stable at GBP2.9 million (H1 2016: GBP2.8 million)
o As at 30 June 2017, cash and cash equivalents were up 41% at GBP4.8 million (31 December 2016: GBP3.4 million).
-- H1 2017 operational highlights:
o Strong growth in Digital Radio and Advanced Radio(1) driven by Digital Switchover in Norway and robust DAB volumes in continental Europe
o First material revenues from Smart Audio(2)
-- Full year 2017 outlook
o Trading since the end of H1 2017 has continued to be strong and the Board now expects FY 2017 EBITDA(3) to be significantly ahead of current market expectations(4) .
Anthony Sethill, CEO of Frontier, commented: "The Group has performed well in the first half of the year. In Digital and Advanced Radio, we have benefited from underlying growth in the sector and the impact of the Digital Switchover in Norway. In Smart Audio, we have secured the first material revenues for our Google Chromecast product.
"In the second half of the year, we expect trading to hold up well and our full year EBITDA performance should be significantly ahead of current market expectations."
Notes:
(1) Advanced Radio is an established business line for Frontier, in previous reports referred to as Smart Audio. The business offers technologies for Internet radios (devices often also providing access to online music services, such as Spotify).
(2) Smart Audio, as now defined, is the Group's newest business line. It encompasses technologies for Wi-Fi enabled audio devices (e.g. speakers, soundbars, AVRs), excluding Internet radios. These devices are generally based on software platforms from major technology players such as Google.
(3) EBITDA is defined as earnings before interest, tax, depreciation, amortisation, and before share based payments.
(4) Current market expectations prior to this announcement for the Group's EBITDA for the year ending 31 December 2017 are approx. GBP1.5 million.
Certain statements made in this release are forward-looking statements. Such statements have been made by the Directors in good faith using information available up until the date that they approved this update. Forward-looking statements should be regarded with caution because of the inherent uncertainties in economic trends and business risks.
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation. Upon the publication of this announcement via a regulatory information service, this inside information is now considered to be in the public domain.
Enquiries:
Hot Features
Premium
Frontier Smart Technologies +44 (0) 20 7391
Group Limited 0630
Anthony Sethill, Chief Executive
Officer
Jonathan Apps, Chief Financial
Officer
N+1 Singer (Nominated Adviser +44 (0) 20 7496
and Broker) 3000
Shaun Dobson / James Hopton
+44 (0) 20 7466
Buchanan 5000
Henry Harrison-Topham / Steph FST@buchanan.com
Watson / Gemma Mostyn-Owen
About Frontier
The Frontier Smart Technologies Group is a pioneer in technologies for digital audio devices. The original company, Frontier Silicon, was incorporated in 2001. Customers include many leading consumer audio brands: Bose, Denon, Grundig, harman/kardon, Onkyo, Panasonic, Philips, Pioneer, Pure, Roberts, Sony, TechniSat, Yamaha, and many more. The Company is headquartered in London, with engineering, sales and operations teams in Cambridge, Timisoara (Romania), Hong Kong, and Shenzhen. www.frontiersmart.com
Introduction
In this statement, Frontier reports on three business lines: Digital Radio, Advanced Radio and Smart Audio.
-- In Digital Radio, Frontier provides chips and modules for DAB radios (consumer and automotive aftermarket).
-- In Advanced Radio, Frontier provides solutions for Internet radios (devices often also offering access to online music services).
-- The Group's Smart Audio business is focused on solutions for Wi-Fi enabled audio devices such as Wi-Fi speakers, soundbars and AVRs. Generally, these devices incorporate software platforms from major technology companies such as Google.
Digital and Advanced Radio are well-established business lines where Frontier has market leading technologies and strong customer relationships, with both generating positive cashflows.
Smart Audio is the Group's newest business line and offers potentially attractive growth prospects. Market volumes are forecast by Strategy Analytics to rise from 14 million units in 2016 to 76 million in 2020. Whilst still in the early stages of development, growth in this sector is being driven by platforms such as Google Chromecast and voice technologies on devices such as the Amazon Echo and Google Home. Frontier's role is to work with third party brands to develop Smart Audio devices based on these proprietary technologies.
In 2016, Frontier returned its first positive EBITDA of GBP0.7 million with revenues of GBP32.1 million.
In previous reports, Advanced Radio was reported as part of the Group's Smart Audio activities. In future, starting with the Group's 2017 Full Year Results, the Group intends to report Digital and Advanced Radio as a single business line. However, to aid transparency, in this report Advanced Radio has been broken out as a separate business line.
Overview of H1 2017 performance
H1 2017 saw a strong financial performance for the Group, with reported revenues of GBP19.7 million up 44% (H1 2016: GBP13.7 million) and EBITDA improving to GBP1.1 million (H1 2016: loss of GBP0.04 million).
This growth in Group revenues was assisted by the decline in Sterling against the US Dollar. On a constant currency basis, revenues grew by 27% to US$25.0 million (H1 2016: US$19.7 million).
Digital Radio and Advanced Radio both saw strong growth in the period. Digital Radio dollar revenues were up 20% to US$16.1 million (H1 2016: US$13.4 million); and Advanced Radio revenues grew 11% to US$7.0 million (H1 2016: US$6.3 million). Digital Radio benefited from the start of the switch-off of FM broadcasts in Norway, a process which will continue throughout 2017, on top of robust underlying growth in DAB volumes in continental Europe. Both Radio businesses benefited from the introduction of new EU regulation (the Radio Equipment Directive), which encouraged some customers to bring forward orders into the first half of the year.
Smart Audio produced its first significant revenues, US$1.8 million in H1 2017 (H1 2016: zero). These sales were generated by design wins for Minuet, Frontier's Smart Audio solution incorporating Google Chromecast. Customers include Harman JBL, Urbanears, Brookstone, Jensen and SOLIS.
Group R&D expenditure in H1 2017 was broadly flat at GBP2.9 million (H1 2016: GBP2.8 million).
At 30 June 2017, the Group's cash balance was GBP4.8 million (31 December 2016: GBP3.4 million). This equates to a net cash position of GBP1.3 million (31 December 2016: net debt GBP0.7 million).
Prospects
The Digital Radio and Advanced Radio business lines are expected to continue generating positive cashflows for the medium term. Smart Audio is a new business sector driven by large US technology companies such as Google and Amazon. The Smart Audio market is expected to be substantially larger than that of DAB. The Group's aim over the next 18 months is to establish itself as the leading system integrator in this sector.
Digital Radio
Digital Radio volumes for 2018 may remain at similar levels to 2017 following the completion of Digital Switchover ('DSO') in Norway. Thereafter prospects for Digital Radio remain favourable, with continued progress across Europe and the beginning of DSO in Switzerland in 2020.
Advanced Radio
Advanced Radio is expected to remain a relatively niche business concentrated in Germany and the UK. Frontier is expected to maintain its leadership of this sector, a position which should be boosted by the introduction in Q3 2017 of a new module, specifically targeting the 'entry price point' segment.
In Q3 2017, Frontier has also since announced that it is working on technologies which will allow its Advanced Radios and wireless speakers to be controlled via Amazon's Echo and Echo Dot devices.
Smart Audio
Frontier continues to be one of a small number of technology providers working with Google on its Chromecast platform. Having delivered the first design wins for the Group's Minuet platform, there are now two strands to Frontier's engineering spend; first, continuing to enhance the existing solution (e.g. by adding new features such as wireless stereo) and; second, the development of a new version of Minuet incorporating Google's Voice Assistant.
Subject to Google approvals, this voice-enabled solution should be ready for mass production in H1 2018. Discussions with potential customers are currently under way.
Financial Review
H1 2017 revenues of GBP19.7 million were up 44% year-on-year (H1 2016: GBP13.7 million).
Gross margin of GBP8.1 million was up 35% (H1 2016: GBP6.0 million). In percentage terms, gross margin fell from 44% to 41% of revenues. This decline reflects the lower margins attributable to the Smart Audio business (where the Group uses third party silicon; whereas in Digital and Advanced Radio the Group uses its own silicon). As Smart Audio grows, a further decline in the Group's percentage margins is expected.
EBITDA for H1 2017 improved to GBP1.1 million (H1 2016: loss of GBP0.04 million), driven by a combination of Digital Radio US dollar revenues, which were up 20% to US$16.1 million (H1 2016: US$13.4 million), and Advanced Radio revenues which grew 11% to US$7.0 million (H1 2016: US$6.3 million). The Group has benefited from the continued growth of DAB Digital Radio in continental Europe and the ongoing switch-off of the analogue transmission network in Norway.
Smart Audio now refers only to the Group's new technologies for Wi-Fi enabled audio devices (excluding Internet radios, which are based on the Group's older solutions).
This change is designed to give visibility to the separate performance of each of the Group's established business lines (Digital and Advanced Radio) and its new business line (Smart Audio). Smart Audio is expected to deliver greater long term growth than Digital and Advanced Radio, but is still in the early stages of development and currently accounts for a significant proportion of Group R&D.
Smart Audio revenues from Minuet based products in H1 2017 were US$1.8 million (H1 2016: zero).
The Group has benefited during the period under review from the movement in the USD/GBP exchange rate as the majority of its revenue is booked in US Dollars. Offsetting these gains, however, are a slight decline in UK volumes (following an increase in UK retail selling prices due to the decline in Sterling) and certain overhead costs denominated in currencies other than Sterling. Gross margin in H1 2017 has increased by 35% to GBP8.1 million (H1 2016: GBP6.0 million).
EBITDA can be calculated as:
H1 2017 H1 2016
GBP'000 GBP'000
--------- ---------
Revenue 19,727 13,659
Cost of sales 11,641 7,657
Gross margin 8,086 6,002
Research and development 2,868 2,762
Sales and administrative
expenses 4,141 3,275
EBITDA 1,077 (35)
Certain R&D costs related to future Minuet software development were expensed as the conditions required for capitalisation under IFRS were not met. As stated previously, research and development ('R&D') expenditure has been broadly consistent year-on-year. Sales and administrative expenses increased by 26% year-on-year, reflecting a combination of exchange rate effects and an increased investment in sales and marketing to support the Group's entry into Smart Audio.
Frontier is now cash flow positive as evidenced by an increase in the net cash position from net debt at 31 December of GBP0.7 million to a net cash position of GBP1.3 million.
Group pre-tax loss was GBP0.8 million (2016: loss GBP2.0 million) with a loss per share on the continuing business of 2.88 pence (2016: loss 1.38 pence).
Outlook
Based on the strong performance in H1 2017 and with good visibility of the Group's H2 order book, the Board now expects FY 2017 EBITDA to be significantly ahead of current market expectations.
Reported revenue growth for H2 2017 is expected to be lower than H1 2017, as the decline in Sterling against the US Dollar has started to reverse.
Underlying Digital Radio and Advanced Radio revenue growth is expected to slow on H1 2017 as the benefits of the Norway switchover are likely to have passed their peak. Nevertheless, growth in Digital Radio volumes in continental Europe should remain robust.
The slowing of growth in Digital and Advanced Radio is however expected to be offset by Smart Audio. Group revenues from Smart Audio are currently on an upward trend, with H2 2017 revenues expected to be significantly higher than in H1 2017. Whilst the sector remains in the early stages of development, several new models based on Frontier solutions have recently received Google certification and initial orders for these products are encouraging.
The net impact of the strong performance in H1 2017 and continued growth in H2 2017 is that FY 2017 revenues (in Sterling) are expected to be significantly ahead of FY 2016.
Anthony Sethill
Chief Executive Officer
27 September 2017
Statement of Comprehensive Income
for the period ended 30 June 2017
Unaudited Unaudited Audited
six months six months year ended
ended ended 31 December
30 June 2017 30 June 2016 2016
Note Restated Restated
GBP'000 GBP'000 GBP'000
Revenue 4 19,727 13,659 32,135
Cost of sales (11,641) (7,657) (18,000)
---------------------------- ---- ------------- ------------- ------------
Gross profit 8,086 6,002 14,135
---------------------------- ---- ------------- ------------- ------------
Research & development (2,868) (2,762) (6,588)
Sales & administrative
expenses (4,141) (3,275) (6,876)
EBITDA 1,077 (35) 671
---------------------------- ---- ------------- ------------- ------------
Amortisation (1,182) (1,186) (2,377)
Depreciation (151) (175) (355)
Share based payment (357) (380) (633)
---------------------------- ---- ------------- ------------- ------------
Total administrative
expenses (8,699) (7,778) (16,829)
---------------------------- ---- ------------- ------------- ------------
Loss from continuing
operations (613) (1,776) (2,694)
Finance income 6 5 9
Finance charges (148) (189) (361)
---------------------------- ---- ------------- ------------- ------------
Loss before taxation (755) (1,960) (3,046)
Taxation (475) 1,373 1,607
---------------------------- ---- ------------- ------------- ------------
Loss for the period
from continuing operations (1,230) (587) (1,439)
---------------------------- ---- ------------- ------------- ------------
Loss for the period
from discontinued
operations - (15,879) (15,892)
Loss for the Period (1,230) (16,466) (17,331)
---------------------------- ---- ------------- ------------- ------------
Other comprehensive
income/ (expense)
Items that will be
reclassified subsequently
to profit or loss
Exchange differences
on translating foreign
operations 65 (31) 17
Other comprehensive
income/(expense) for
the period 65 (31) 17
---------------------------- ---- ------------- ------------- ------------
Total comprehensive
loss for the period (1,165) (16,497) (17,314)
---------------------------- ---- ------------- ------------- ------------
Earnings per share
---------------------------- ---- ------------- ------------- ------------
Basic earnings per
share
- From continuing
operations 5 (2.88)p (1.38)p (3.36)p
- From discontinued
operations 5 - (37.2)p (37.1)p
---------------------------- ---- ------------- ------------- ------------
Consolidated Statement of Financial Position at 30 June 2017
Unaudited Unaudited Audited
Note 30 June 30 June 31 December
2017 2016 2016
Restated Restated
Assets GBP'000 GBP'000 GBP'000
Non-current assets
Goodwill 6 8,536 8,536 8,536
Other intangible assets 7 7,348 9,701 8,510
Property, plant and equipment 339 514 401
16,223 18,751 17,447
------------------------------------------------------------------- ------ --------- --------- ------------
Current assets
Inventories 4,154 3,144 2,588
Tax receivable 319 934 1,123
Trade and other receivables 8 4,688 5,621 8,209
Cash and cash equivalents 4,816 3,378 3,376 ------------------------------------------------------------------- ------ --------- --------- ------------ Total current assets 13,977 13,077 15,296 ------------------------------------------------------------------- ------ --------- --------- ------------ Assets included in disposal group classified as held for sale - 3,592 - ------------------------------------------------------------------- ------ --------- --------- ------------ Total assets 30,200 35,420 32,743 ------------------------------------------------------------------- ------ --------- --------- ------------ Liabilities Current liabilities ------------------------------------------------------------------- ------ --------- --------- ------------ Trade and other payables 9 10,957 10,013 12,112 ------------------------------------------------------------------- ------ --------- --------- ------------ Total current liabilities 10,957 10,013 12,112 ------------------------------------------------------------------- ------ --------- --------- ------------ Other liabilities > 1 year 10 2,291 3,453 2,872 Liabilities included in disposal group classified as held for sale - 3,631 - Total liabilities 13,248 17,097 14,984 ------------------------------------------------------------------- ------ --------- --------- ------------ Equity Share capital 11 4,276 4,275 4,275 Share premium 115,300 115,300 115,300 Share based payment reserve 5,491 4,881 5,134 Foreign exchange reserve 47 (66) (18) Retained earnings (108,162) (106,067) (106,932) Total equity 16,952 18,323 17,759 ------------------------------------------------------------------- ------ --------- --------- ------------ Total equity and liabilities 30,200 35,420 32,743 ------------------------------------------------------------------- ------ --------- --------- ------------
Consolidated Statement of Changes in Equity at 30 June 2017
Share
based Foreign
Share Share payment Retained exchange Total
capital premium reserve earnings reserve equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January
2017 4,275 115,300 5,134 (106,932) (18) 17,759
Share-based
payments - - 357 - - 357
Issue of share
capital 1 - - - - 1
Transactions
with owners 1 - 357 - - 358
--------- -------- --------- --------- ---------- -------
Loss for the
period - - - (1,230) - (1,230)
Other comprehensive
losses
Exchange differences
on translating
foreign operations - - - - 65 65
Total comprehensive
loss - - - (1,230) 65 (1,165)
--------- -------- --------- --------- ---------- -------
At 30 June 2017 4,276 115,300 5,491 (108,162) 47 16,952
========= ======== ========= ========= ========== =======
Consolidated Statement of Changes in Equity
for the period ended 30 June 2016
Share
based Foreign
Share Share payment Retained exchange Total
capital premium reserve earnings reserve equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January
2016 4,262 115,300 4,501 (89,601) (35) 34,427
Share-based
payments - - 380 - - 380
Issue of share
capital 13 - - - - 13
Transactions
with owners 13 - 380 - - 393
------- -------- --------- --------- ---------- --------
Loss for the
period (restated) - - - (16,466) - (16,466)
Other comprehensive
losses
Exchange differences
on translating
foreign operations - - - - (31) (31)
Total comprehensive
loss - - - (16,466) (31) (16,497)
------- -------- --------- --------- ---------- --------
At 30 June 2016 4,275 115,300 4,881 (106,067) (66) 18,323
======= ======== ========= ========= ========== ========
Consolidated Statement of Changes in Equity
for the period ended 31 December 2016
Share
based Foreign
Share Share payment Retained exchange Total
capital premium reserve earnings reserve equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January
2016 4,262 115,300 4,501 (89,601) (35) 34,427
Share-based
payments - - 633 - - 633
Issue of share
capital 13 - - - - 13
Transactions
with owners 13 - 633 - - 646
--------- -------- --------- --------- ---------- --------
Loss for the
period (restated) - - - (17,331) - (17,331)
Other comprehensive
losses
Exchange differences
on translating
foreign operations - - - - 17 17
Total comprehensive
loss - - - (17,331) 17 (17,314)
--------- -------- --------- --------- ---------- --------
At 31 December
2016 4,275 115,300 5,134 (106,932) (18) 17,759
========= ======== ========= ========= ========== ========
Consolidated Cash Flow Statement
for the period ended 30 June 2017
Unaudited
Unaudited six months Audited
six months ended year ended
ended 30 June 31 December
30 June 2016 2016
2017 Restated Restated
GBP'000 GBP'000 GBP'000
Cash flows from operating
activities
Loss before taxation (755) (1,960) (3,046)
Amortisation 1,182 1,186 2,377
Depreciation 151 175 355
Share based payments 357 380 633
Net interest paid 142 184 352
(Increase)/ decrease
in inventories (1,566) (478) 78
Decrease/ (increase)
in trade and other receivables 3,495 662 (1,881)
(Decrease)/ increase
in trade and other payables (1,136) (1,208) 900
Foreign exchange movements 74 (31) (559)
Tax refund 429 1,685 1,805
Net cash inflow / (outflow)
from continuing operations 2,373 595 1,014
--------------------------------- ----------- ----------- ------------
Net cash outflow from
discontinuing operations - (4,476) (5,200)
--------------------------------- ----------- ----------- ------------
Net cash flow from operating
activities 2,373 (3,881) (4,186)
--------------------------------- ----------- ----------- ------------
Cash flow from investing
activities
-------------------------------- ----------- ----------- ------------
Purchase of property,
plant and equipment (97) (56) (81)
Purchase of intangible
assets (21) (63) (143)
Proceeds from sale of
subsidiaries, net of
cash sold - - 714 Net cash (used in) / provided by investing activities (118) (119) 490 --------------------------------- ----------- ----------- ------------ Cash flow from financing activities Loan (600) (300) (900) Proceeds from issue of share capital 1 - - Loan interest payable (148) (189) (361) Interest receivable 6 5 9 Net cash used in financing activities (741) (484) (1,252) --------------------------------- ----------- ----------- ------------ Net change in cash and cash equivalents 1,514 (4,484) (4,948) --------------------------------- ----------- ----------- ------------ Cash and cash equivalents at beginning of period 3,376 7,748 7,748 Exchange differences on cash and cash equivalents (74) 114 576 Cash and cash equivalents at end of period 4,816 3,378 3,376 --------------------------------- ----------- ----------- ------------
Notes to the Interim Report
For the period ended 30 June 2017
1. Nature of operations and general information
Frontier Smart Technologies Group Limited and subsidiaries' (the 'Group') principal activity is the development and commercial exploitation of technologies for consumer digital audio devices.
Frontier Smart Technologies Group Limited is the Group's ultimate parent company. It is incorporated in the Cayman Islands. The address of Frontier Smart Technologies Group Limited's registered office is Elgin House, 119 Elgin Avenue, George Town, Grand Cayman, Cayman Islands. Frontier Smart Technologies Group Limited's shares are listed on the Alternative Investment Market of the London Stock Exchange. Frontier Smart Technologies Group Limited's consolidated interim financial statements are presented in Pounds Sterling (GBP), which is also the functional currency of the parent company.
The financial information set out in this interim report does not constitute statutory accounts. The Group's statutory financial statements for the year ended 31 December 2016 are available from the Group's website. The auditor's report on those financial statements was unqualified.
2. Accounting Policies
Basis of Preparation
These interim condensed consolidated financial statements are for the six months ended 30 June 2017. They have been prepared following the recognition and measurement principles of IFRS. They do not include all of the information required for full annual financial statements, and should be read in conjunction with the consolidated financial statements of the Group for the year ended 31 December 2016.
These financial statements have been prepared on the going concern basis and under the historical cost convention.
These condensed consolidated interim financial statements have been prepared in accordance with the accounting policies adopted in the last annual financial statements for the year to 31 December 2016.
The accounting policies have been applied consistently throughout the Group for the purposes of preparation of these condensed consolidated interim financial statements.
3. Prior Period Restatement
Shortly after the completion of the full year accounts for 2016 the company became aware that an inter-company debtor of GBP1.7 million in respect of the discontinued business should have been provided for in the period to 31 December 2016. In preparing these half year statements for the period to 30 June 2017, and having regard to the materiality of the debtor in respect of the half year 2017, the Board have concluded that the item should be treated as a prior year adjustment. The discontinued loss for the year to 31 December 2016 has therefore increased to GBP15.9 million from the GBP14.2 million previously reported.
4. Revenue by sector
Unaudited Audited
Unaudited 30 June 31 December
30 June 2017 2016 2016
GBP'000 GBP'000 GBP'000
Digital Radio 12,745 9,273 22.332
Advanced Radio 5,531 4,364 9,349
Smart Audio 1,451 22 454
Revenue 19,727 13,659 32,135
--------------- ------------- --------- ------------
Segmental information
As described under Segmental Reporting in the Principal Accounting Policies, Management currently identifies four divisions as operating segments.
For the period Digital Advanced Smart Group Total
ended 30 June 2017 Radio Radio Audio
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue 12,745 5,531 1,451 - 19,727
Cost of sales (6,966) (3,491) (1,184) - (11,641)
------------ --------- --------- --------- ---------
Gross profit 5,779 2,040 267 - 8,086
------------ --------- --------- --------- ---------
Research & development (310) (540) (2,018) - (2,868)
Sales & administrative
expenses - other (1,103) (604) (1,351) (1,083) (4,141)
------------------------ ------------ --------- --------- --------- ---------
EBITDA 4,366 896 (3,102) (1,083) 1,077
------------------------ ------------ --------- --------- --------- ---------
Amortisation of
intellectual property (1,176) (1) (2) (3) (1,182)
Depreciation (105) (13) (27) (6) (151)
Share based payment (357) (357)
------------ --------- --------- --------- ---------
Total administrative
expenses (2,694) (1,158) (3,398) (1,449) (8,699)
------------ --------- --------- --------- ---------
Profit/ (loss)
from continuing
operations 3,085 882 (3,131) (1,449) (613)
Net finance payable - - - (142) (142)
Profit/ (loss)
before taxation 3,085 882 (3,131) (1,591) (755)
------------ --------- --------- --------- ---------
For the period Digital Advanced Smart Group Total
ended 30 June 2016 Radio Radio Audio
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue 9,273 4,364 22 - 13,659
Cost of sales (4,934) (2,708) (15) - (7,657)
--------- --------- --------- --------- ---------
Gross profit 4,339 1,656 7 - 6,002
--------- --------- --------- --------- ---------
Research & development (557) (618) (1,587) - (2,762)
Sales & administrative
expenses - other (670) (342) (761) (1,502) (3,275)
------------------------ --------- --------- --------- --------- ---------
EBITDA 3,112 696 (2,341) (1,502) (35)
------------------------ --------- --------- --------- --------- ---------
Amortisation of
intellectual property (1,179) (7) - - (1,186)
Depreciation (133) (42) - - (175)
Share based payment - - - (380) (380)
--------- --------- --------- --------- ---------
Total administrative
expenses (2,539) (1,009) (2,348) (1,882) (7,778)
--------- --------- --------- --------- ---------
Profit/ (loss)
from continuing
operations 1,800 647 (2,341) (1,882) (1,776)
Net finance payable - - - (184) (184)
Profit/ (loss)
before taxation 1,800 647 (2,341) (2,066) (1,960)
--------- --------- --------- --------- ---------
For the period Digital Advanced Smart Group Total
ended 31 December Radio Radio Audio
2016 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue 22,332 9,349 454 - 32,135
Cost of sales (11,553) (6,129) (318) - (18,000)
--------- --------- --------- --------- ---------
Gross profit 10,779 3,220 136 - 14,135
--------- --------- --------- --------- ---------
Research & development (896) (1,444) (4,248) - (6,588)
Sales & administrative
expenses - other (1,196) (840) (1,870) (2,970) (6,876)
------------------------ --------- --------- --------- --------- ---------
EBITDA 8,687 936 (5,982) (2,970) 671
------------------------ --------- --------- --------- --------- ---------
Amortisation of
intellectual property (2,367) (10) - - (2,377)
Depreciation (262) (93) - - (355)
Share based payment - - - (633) (633)
--------- --------- --------- --------- ---------
Total administrative
expenses (4,721) (2,387) (6,118) (3,603) (16,829)
--------- --------- --------- --------- ---------
Profit/ (loss)
from continuing
operations 6,058 833 (5,982) (3,603) (2,694)
Net finance payable - - - (352) (352)
Profit/ (loss)
before taxation 6,058 833 (5,982) (3,955) (3,046)
--------- --------- --------- --------- ---------
5. Loss per share
The calculation of the basic loss per share is based on the loss attributable to ordinary shareholders divided by the weighted average number of shares in issue during the period. The impact of the share options on the loss per share is anti-dilutive.
Basic loss per share
Unaudited Audited
Unaudited Six months Year ended
Six months ended 31 December
ended 30 June 2016 2016
30 June 2017 Restated Restated
GBP'000 GBP'000 GBP'000
Loss for the period attributable
to equity shareholders
- continuing operations GBP1,230 GBP587 GBP1,439
Loss for the period attributable
to equity shareholders
- discontinuing operations - GBP15,879 GBP15,892
Weighted average number
of 10p ordinary shares 42,751,710 42,643,509 42,832,269
(Loss) per share - basic
and diluted - continuing
operations (2.88)p (1.38)p (3.36)p
(Loss) per share - basic
and diluted - discontinuing
operations - (37.2)p (37.1)p
6. Goodwill
Frontier Sensium Frontier
Silicon Healthcare Microsystems Total
GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 1 January 2016 8,536 10,582 5,951 25,069
Additions - - - -
-------- ----------- ------------- --------
At 30 June 2016 8,536 10,582 5,951 25,069
Additions
Disposals - (10,582) - (10,582)
-------- ----------- ------------- --------
At 31 December 2016 8,536 - 5,951 14,487
Additions - - - -
At 30 June 2017 8,536 - 5,951 14,487
======== =========== ============= ========
Impairment
At 1 January 2016 - - 5,951 5,951
Charge in period - - - -
-------- ----------- ------------- --------
At 30 June 2016 - - 5,951 5,951
Charge in period - - - -
-------- ----------- ------------- --------
At 31 December 2016 - - 5,951 5,951
Charge in period - - - -
-------- ----------- ------------- --------
At 30 June 2017 - - 5,951 15,398
Net book amount at
30 June 2017 8,536 - - 8,536
======== =========== ============= ========
Net book amount at
30 June 2016 8,536 - - 8,536
======== =========== ============= ========
Net book amount at
31 December 2016 8,536 - - 8,536
======== =========== ============= ========
Marketing Customer Other Licence
intellectual intellectual intellectual &
property property property Development
fees Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 1 January 2016 4,000 1,690 17,009 16,573 39,261
Foreign exchange
on opening balances - - - 3 3
Additions - - - 80 80
Disposals - - - (14) (14)
Assets held for disposal - - - (933) (933)
------------- ------------- ------------- ------------ -------
At 30 June 2016 4,000 1,690 17,009 15,709 40,644
Additions - - - 1 1
Adjustment to assets
held for disposal - - - 118 118
Disposals - - (6,805) - (6,805)
------------- ------------- ------------- ------------ -------
At 31 December 2016 4,000 1,690 10,204 15,828 33,958
Foreign exchange
on opening balances - - - (1) (1)
Additions - - - 21 21
Disposals - - - - -
At 30 June 2017 4,000 1,690 10,204 15,848 31,742
============= ============= ============= ============ =======
Amortisation
At 1 January 2016 1,333 470 11,095 14,855 27,753
Charge in period 200 70 634 282 1,186
Disposals (11) (11)
Assets held for disposal - - - (221) (221)
------------- ------------- ------------- ------------ -------
At 30 June 2016 1,533 540 11,729 14,905 28,707
Charge period 200 71 634 286 1,191
Adjustment to assets
held for disposal - - - 119 119
Disposals - - (6,805) - (6,805)
------------- ------------- ------------- ------------ -------
At 31 December 2016 1,733 611 5,558 15,310 23,212
Charge period 200 70 634 278 1,182
Disposals - - - - -
At 30 June 2017 1,933 681 6,192 15,588 24,394
============= ============= ============= ============ =======
Net book amount at
30 June 2017 2,067 1,009 4,012 260 7,348
============= ============= ============= ============ =======
Net Book amount at
30 June 2016 2,467 1,150 5,280 804 9,701
============= ============= ============= ============ =======
Net book amount at
31 December 2016 2,267 1,079 4,646 518 8,510
============= ============= ============= ============ =======
7. Other intangible assets
Intellectual property
Intellectual property relates to the valuation of beneficial licence agreements, trade names and customer relationships at the date of their original acquisition.
Licence & development fees
The licences relate to technology on new projects essential to the future development of the new generation digital chips. The licences will be amortised in accordance with the Group accounting policy and will be subject to an annual impairment review.
Marketing
Marketing-related intangible assets are defined as those assets that are primarily used in the marketing or promotion of products and services. The Frontier solutions are well known and preferred by a majority of the consumer electronic brands who specifically instruct their manufacturers to use Frontier modules and solutions in their audio systems.
Customer relationships
Customer-related intangible assets may consist of customer lists, order or production backlogs, customer contracts and relationships, and non-contractual customer relationships. Frontier has developed relationships with both consumer electronic brands and manufacturers. The customer relationship valuation captures the economic benefits of having these trading relationships.
8. Trade and other receivables
Unaudited Unaudited Audited
30 June 30 June 31 December
2017 2016 2015
GBP'000 GBP'000 GBP'000
Trade receivables 3,390 4,909 6,719
Other debtors 858 376 821
Prepayments and accrued
income 440 336 669
Trade and other receivables 4,688 5,621 8,209
---------------------------- --------- --------- ------------
Trade and other receivables are usually due within 30 - 60 days and do not bear any effective interest rate.
The fair value of these short term financial assets is not individually determined as the carrying amount is a reasonable approximation of fair value.
9. Trade and other payables
Unaudited Unaudited Audited
30 June 30 June 31 December
2017 2016 2016
GBP'000 GBP'000 GBP'000
Trade payables 5,475 5,283 6,740
Other payables 753 528 664
Accruals and deferred
income 3,569 3,039 3,548
Loan 1,160 1,163 1,160
Trade and other payables 10,957 10,013 12,112
------------------------- --------- --------- ------------
10. Creditors: amounts falling due after more than one year
Unaudited Unaudited Audited
30 June 30 June 31 December
2017 2016 2016
GBP'000 GBP'000 GBP'000
Loan 2,291 3,453 2,872
Total 2,291 3,453 2,872
------ --------- --------- ------------
Loan
Frontier Smart Technologies Group Limited entered into a loan facility agreement in October 2015 for a maximum of GBP5,000,000. The loan accrues interest monthly at 6.8% with interest repayable in 12 quarterly instalments commencing 29 December 2015. Capital repayments are payable quarterly in ten instalments commencing March 2016, made up of nine instalments of GBP300,000 and a final instalment of GBP2,300,000. The loan carries a fixed and floating charge over all the property, assets and undertakings of the Group.
11. Share capital
Audited
Unaudited Unaudited 31 December
30 June 2017 30 June 2016 2016
GBP GBP GBP
Authorised
100,000,000 ordinary
shares of 10p 10,000,000 10,000,000 10,000,000
Allotted, issued and
fully paid 42,761,636 42,745,772 42,748,464
GBP 4,276,163 4,274,577 4,274,846
------------------------------------- ------------- ------------- ---------------
The movement in the number of shares
is as follows:
Number of
ordinary
shares
At 1 January 2016 1,704,779,379
Shares issued 5,051,486
At 30 June 2016 1,709,830,865
Shares issued 107,724
Share consolidation 40:1 (1,667,190,125)
At 31 December 2016 42,748,464
Shares issued 13,172
At 30 June 2017 42,761,636
---------------
All shares are equally eligible to receive dividends and the repayment of capital and represent equal votes at meetings of shareholders with the exception of 2,238,462 shares held jointly by the Employee Benefit Trust and participants for the purpose of the Company's joint share ownership plan in relation to which all voting rights have been waived.
Allotments
2 May 2017 7,497 ordinary shares of 10p were issued in relation to the exercise of share options by employees.
5 June 2017 5,675 ordinary shares of 10p were issued in relation to the exercise of share options by employees.
12. Financial Instruments
The Group uses financial instruments comprising cash and cash equivalents, other loans and various other short-term instruments such as trade receivables and trade payables which arise from its operations. The main purpose of these financial instruments is to fund the Group's business strategy and the short-term working capital requirements of the business.
Financial assets by category
The IAS 39 categories of financial asset included in the balance sheet and the headings in which they are included are as follows:
30 June 2017
Loans Non Balance
and financial sheet
receivables assets total
GBP'000 GBP'000 GBP'000
Goodwill - 8,536 8,536
Other intangibles
assets - 7,348 7,348
Property,
plant and
equipment - 339 339
Inventories - 4,154 4,154
Trade receivables 3,390 - 3,390
Other receivables 858 - 858
Prepayments
and accrued
income - 440 440
Tax receivable - 319 319
Cash and cash
equivalents 4,816 - 4,816
Total 9,064 21,136 30,200
============ ========== =======
30 June 2016
Loans Non Balance
and financial sheet
receivables assets total
GBP'000 GBP'000 GBP'000
Goodwill - 8,536 8,536
Other intangibles
assets - 9,701 9,701
Property,
plant and
equipment - 514 514
Inventories - 3,144 3,144
Trade receivables 4,909 - 4,909
Other receivables 376 - 376
Prepayments
and accrued
income - 336 336
Assets held
for sale 3,592 3,592
Tax receivable - 934 934
Cash and cash
equivalents 3,378 - 3,378
------------ ---------- -------
Total 12,255 23,165 35,420
============ ========== =======
31 December
2016
Loans Non Balance
and financial sheet
receivables assets total
GBP'000 GBP'000 GBP'000
Goodwill - 8,536 8,536
Other intangibles
assets - 8,510 8,510
Property, plant
and equipment - 401 401
Inventories - 2,588 2,588
Trade receivables 6,719 - 6,719
Other receivables 821 - 821
Prepayments
and accrued
income - 669 669
Tax receivable - 1,123 1,123
Cash and cash
equivalents 3,376 - 3,376
Total 10,916 21,827 32,743
============ ========== =======
Financial liabilities by category
The IAS 39 categories of financial liability included in the balance sheet and the headings in which they are included are as follows:
Unaudited Unaudited Unaudited Unaudited Audited Audited
30 June 30 June 30 June 30 June 31 December 31 December
2017 2017 2016 2016 2016 2016
Other Other Other
financial financial financial
liabilities liabilities liabilities
at at at
amortised amortised amortised
cost Fair cost Fair cost Fair
Value Value Value
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Trade
payables 5,475 5,475 5,283 5,283 6,740 6,740
Other
payables 753 753 528 528 664 664
Accruals
and deferred
income 3,569 3,569 3,039 3,039 3,548 3,548
Liabilities
held for
disposal - - 3,631 3,631 - -
Loan 3,451 3,451 4,616 4,616 4,032 4,032
Total 13,248 13,248 17,097 17,097 14,984 14,984
============== ========== ============== ========== ============== =============
All financial assets and liabilities are stated at amortised cost.
The Group is exposed to a variety of financial risks which result from both its operating and investing activities. The Board is responsible for co-ordinating the Group's risk management and focuses on actively securing the Group's short to medium term cash flows. Long term financial investments are managed to generate lasting returns.
The Group does not actively engage in the trading of financial assets and has no financial derivatives. The most significant risks to which the Group is exposed are described below:
Credit risk
The Group's credit risk is primarily attributable to its trade receivables, recoverable taxation and cash and cash equivalents. The amounts presented in the balance sheet are net of any allowance for doubtful receivables, estimated by the Directors. The Group has a concentration of credit risk due to exposure from a limited number of customers. This is managed at the highest level in the Group. Cash at bank is all held with highly rated banks, the suitability of which is periodically reviewed.
Liquidity risk
The Group seeks to manage risks to ensure sufficient liquidity is available to meet foreseeable needs and to invest cash assets safely and profitably. Short term flexibility is achieved by the use of money markets to deposit excess cash which is not required in the short term. The Directors prepare rolling cash flow forecasts and seek to raise additional funding whenever a shortfall in facilities is forecast. Details of the funding status of the Group are included in the going concern paragraph in the principal accounting policies.
Currency risks
The Group is exposed to translation foreign exchange risk in connection with its investment in Frontier Silicon Ltd whose subsidiaries are Frontier Silicon (Hong Kong) Ltd incorporated in Hong Kong and Frontier Silicon SRL incorporated in Romania. The Group does not hedge any transactions. As a result, the Group is subject to foreign currency risk in respect of accounting for its investment in the subsidiaries.
13. Post Balance Sheet Events
There have been no material events since 30 June 2017.
- Ends -
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR LLFVAAEIDFID
(END) Dow Jones Newswires
September 28, 2017 02:01 ET (06:01 GMT)
1 Year Frontier Smart Technolog... Chart |
1 Month Frontier Smart Technolog... Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions
