26th Jul 2018 13:44
LONDON (Alliance News) - Frontier Smart Technologies Group Ltd on Thursday said its revenue is expected to decline sharply in the first half of 2018, but it hopes to improve financial performance by the year's end.
The stock was trading 10% lower on Thursday at 47.03 pence per share.
The digital audio technology company expects to report revenue for the six months to the end of June at USD17.0 million, down significantly from USD25.0 million reported a year earlier.
For 2018 as a whole, revenue is expected to decline to USD47.7 million from USD53.0 million the year before.
In the company's Digital Radio division, sales and the order book were affected by stock surplus in Norway. However, the company said it saw a recovery and expects Digital Radio revenue to normalise in the second half of 2018, before returning to growth in 2019.
Meanwhile, Smart Audio revenue in the first half of 2018 is expected to come in 19% higher year-on-year, reflecting a delay in the uptake of voice-enabled speakers from third party brands.
Looking forward, the company expects Smart Audio sector sales of third-party branded products to increase in 2019.
Back in May, Frontier implemented a range of measures to reduce research & development overheads, which are estimated to deliver USD3.4 million savings in 2018.
"As anticipated, trading conditions in the first half of the year have been challenging, especially when compared to the first half of 2017 which was significantly ahead of plan and our normal seasonality," said Chief Executive Anthony Sethill.
"I expect an improved year-on-year performance in the second half of 2018, with our Digital Radio and Smart Audio businesses both likely to achieve moderate growth," added Sethill.
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