Sounds good as Frontier Smart hits right notes financially
Improved second-half sales allied to prudent cash management saw a significantly improved financial position for Frontier Smart Technologies Group which has offices in Sawston near Cambridge.
The company pioneers technologies for digital radio and smart audio devices and expects the second half bounce back to push 2018 full-year performance to market expectations.
Revenue for the financial year is expected to be not less than $41 million and EBITDA2 is anticipated to be c$1.4m. As at December 31, Frontier had gross cash of $3.8m.
The digital radio business continues to deliver positive cashflows, albeit lower than FY 2017, which benefited from the Norwegian digital switch over. H2 2018 trading for digital radio was considerably stronger than H1.
This improvement is underpinned by the continued development of European DAB markets, in which Frontier retains its leadership position, coupled with tight management of costs.
Smart audio continues to be loss-making, albeit H2 2018 losses are expected to be substantially lower than in previous periods.
As reported in September 2018, Frontier is developing a licensing business model for smart audio targeting global Tier 1 customers. To support this initiative, the group is establishing new collaborative relationships with silicon providers, such as NXP Semiconductors NV.
Since the period end, Frontier has secured its first customer for licensing. Revenues for this new business line are expected to build gradually during 2019.
CEO Anthony Sethill said: “In the second half of 2018, the group delivered a significantly improved financial performance based on a recovery in sales and the implementation of our targeted cost reduction programme.
“Our digital radio business continues to generate strong positive cashflows. In smart audio, our licensing business has secured its first revenues and established a healthy pipeline of potential customers.
“For FY 2019, we expect further improvements in EBITDA, driven by the sustained performance of digital radio and the growth of our smart audio business – in particular its licensing arm.”