Trading Update

Frontier Smart Technologies Group Ltd

('Frontier' or the 'Group')

Trading update

"EBITDA positive for 2016"

Frontier (AIM: FST), a pioneer in technologies for Digital Radio and Smart Audio devices, announces the following trading update for the year ended 31 December 2016 ('FY 2016') ahead of the announcement of its full year results.

The Group expects to report an improved financial performance for FY 2016, achieving a positive Group EBITDA on a continuing basis, ahead of current market expectations.

Revenue for the financial year is expected to be approximately £32 million and underlying EBITDA1 is anticipated to be c. £0.7 million (FY 2015: comparative EBITDA loss of £0.8 million2), which is ahead of current market expectations. This is due to improved Digital Radio revenue generation, a decrease in R&D expenditure, the sale of the loss-making Healthcare division and foreign exchange tailwinds. The Board expects revenue and underlying EBITDA to improve in 2017, driven by growth in Smart Audio. As at 31 December 2016, the Group had a solid cash position of £3.4 million. 

During FY 2016, the Group was renamed Frontier Smart Technologies to reflect the sole focus on DAB and Smart Audio technologies following the sale of the Healthcare division. Frontier has maintained a market leading position in Digital Radio with growth in Germany, the UK and the Netherlands and has been awarded a number of design wins for its new Smart Audio platform, Minuet, incorporating Google Chromecast.

Trading in 2017 has started in an encouraging manner across both business lines.

Anthony Sethill, CEO of Frontier Smart Technologies, said: 

"2016 has been a year of transition for Frontier, culminating in us delivering a positive EBITDA for the full year. Having sold our loss-making Healthcare division in July, we are now fully focused on our DAB and Smart Audio technologies and view 2017 with increased optimism."

The Group expects to publish its full year results for the year to 31 December 2016 in the first half of April 2017. A further announcement will be made in due course.

- Ends -

Notes

1 Underlying EBITDA means earnings before interest, tax, depreciation, amortisation, and before non-recurring and certain non-cash items

2 EBITDA disclosed for the continuing business and prepared on a consistent basis

3   This trading update is based upon unaudited management accounts and has been prepared solely to provide additional information on trading to the shareholders of Frontier. It should not be relied on by any other party for other purposes. Certain statements made in this update are forward-looking statements. Such statements have been made by the Directors in good faith using information available up until the date that they approved this update. Forward-looking statements should be regarded with caution because of the inherent uncertainties in economic trends and business risks.

4 The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation. Upon the publication of this announcement via a regulatory information service, this inside information is now considered to be in the public domain.

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About Frontier Smart Technologies

Frontier is a pioneer in software and hardware technologies for Digital Audio devices. The Group has one operating division, Frontier Silicon, which provides solutions for Digital Radio and Smart Audio devices.

Frontier was founded in 2002. Customers include many leading consumer audio brands: Bose, Bowers & Wilkins, Denon, Grundig, harman/kardon (JBL), Onkyo, Panasonic, Philips, Pioneer, Pure, Roberts, Sony, TechniSat, Yamaha, and many more.

The Group is headquartered in London, with engineering, sales and operations teams in Cambridge, Timisoara (Romania), Hong Kong, and Shenzhen. Please visit http://www.frontiersmart.com/