30th Aug 2019 09:29
(Alliance News) - Frontier Smart Technologies Group Ltd on Friday reported a drop in revenue in the first half of the year due to heightened competition, but it still was able to narrow its loss.
Shares in Frontier Smart were up 6.4% at 26.59 pence in London in morning trade.
The audio and smart home technology company's revenue for the six months ended June 30 came in at USD14.2 million, dragged down 16% from USD17.0 million by rising competition for low-cost DAB radio.
Digital Radio revenue, which includes DAB and Smart Radio, dropped to USD13.1 million from USD14.9 million "reflecting increased competition for low cost DAB solutions, partly offset by a stronger performance in Smart Radio".
The company's pretax loss, however, narrowed to USD3.4 million from USD4.5 million on a drop in expenses.
Research & development was cut to USD2.8 million from USD4.6 million and sales & administrative expenses shrank to USD4.0 million from USD4.7 million. Total administrative expenses fell to USD8.5 million from USD11.2 million.
Frontier Smart said its results were in line with the warning issued in May, which included guidance for revenue of around USD36.6 million in all of 2019, down from USD41.8 million in 2018, due largely to DAB competition.
Half-year adjusted earnings before interest, depreciation, taxation, and amortisation loss was USD1.3 million, shrinking from a USD2.1 million Ebitda loss in 2018. For 2019 as a whole, the firm expects to post an adjusted Ebitda loss of no worse than USD900,000.
On Thursday last week, Frontier Smart said it has resumed merger talks with consultancy firm and 70% stakeholder Science Group PLC. Science Group made a 25.00p pence per share offer for Frontier Smart. Frontier Smart's board plans to recommend the offer to its other shareholders, having previously rejected it.
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