Frontier Smart Technologies shares tumble despite narrowing losses

Digital radio technology company Frontier Smart Technologies stumbled on Thursday after the firm revealed that while pre-tax losses had contracted, it had still been unable to turn a profit in its most recent fiscal year.

Frontier improved its pre-tax loss from the £3m posted in 2016 to £1.6m for the year ended 31 December, mainly thanks to a significantly better EBITDA of £1.9m - up 171% year-on-year.

Revenues grew 28% to £41m as radio revenues turned up 15% and Frontier received its first material revenues of £4.7m from its smart audio division.

Frontier saw a "strong performance" in radio, especially throughout the first half, driven by switch-off of FM radio in Norway and steady growth in other European markets

In smart audio, Frontier saw over 20 new models that incorporated its solution with Google Chromecast be released and made working demonstrations of its Google Voice Assistant, Amazon's Alexa voice services and Apple AirPlay 2 audio solutions at the CES tradeshow in January 2018.

Research and development expenditure was broadly flat - down £100,000 to £6.5m.

The group expected to see "modest growth in revenues and EBITDA" as it continued to invest in the smart audio division.

Anthony Sethill, Frontier's chief executive, said, "2018 has started in line with plan and is likely to see modest revenue growth year on year. In Radio, the peak impact of FM switch-off in Norway will have passed, but we still expect to see steady volume growth in other European markets. Medium-term prospects will be boosted by Switzerland starting to switch-off its FM signals in 2020/21."

At 31 December, Frontier had £3m in net cash, a marked improvement from its £700,000 net debt position twelve months prior.

Losses per share widened from 3.36p to 4.44p.

As of 1000 GMT, shares had lost 6.09% to 157.30p.