Frontier swings to profit as demand for DAB continues

Digital radio and smart audio technology company Frontier Smart Tech published its final results for the full year to 31 December on Friday, with EBITDA ahead of market expectations, turning positive at £0.7m compared to a loss of £0.8m in 2015.

The AIM-traded firm reported steady revenues of £32.1m, from £31.7m, with digital radio revenues up 8% to £22.3m.

Smart audio revenues were down 11% to £9.8m, which the board said was pending the release of Minuet, the group's new solution incorporating Google's Chromecast platform.

Research and development expenditure was reduced 11% to £6.6m, and the company’s loss making healthcare division was sold in July 2016 for gross proceeds of £1.3m and a ten-year royalty agreement.

As at 31 December, the group's cash balance was £3.4m.

“2016 was a pivotal year for the group,” said CEO Anthony Sethill.

“We sold our loss-making healthcare business, delivered our first positive EBITDA figure and are now fully focused on our consumer audio technology business.”

Sethill said that in digital radio, Frontier maintained its market leadership position as international markets for DAB radio continued to develop.

“With Norway becoming the first country in the world to switch off its FM signals, the prospects for this business are encouraging.

“2016 was an important year for our smart audio business, as we completed the development of our new Minuet solution incorporating Google's Chromecast platform.

“The first consumer products using this solution are now available in-store, with more to follow in the coming months.”

Sethill said that would help drive group revenue and EBITDA growth in 2017.