Frontier Smart Technologies expects a first-half loss as revenues dwindle

Frontier Smart Technologies expects the first half of its trading year to result in a loss after revenues slipped 32% year-on-year, it said on Thursday.

The AIM-listed firm said it expects revenues to drop from the $25m - seen at the midway point of its previous trading year - down to $17m, and anticipates an EBITDA loss for the period of approximately $2.1m - a 250% turnaround from the $1.4m profit posted just 12 months earlier.

Frontier doubled down on the full-year guidance it amended back in May, stating that it still expected $47.7m in revenues and $1m in EBITDA - a 10% and 61% decline, respectively.

The UK-based firm said the reduction in revenues was largely due to lower retail sales of DAB radios following the completion of the FM switch-off in Norway in December 2017, and by its customers holding excess stock at the start of 2018 which adversely impacted Frontier's order book.

Anthony Sethill, chief executive 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," added Sethill.

As of 1240 BST, Frontier shares had lost 8.60% to 47.99p.