FRONTIER SMART TECHNOLOGIES GROUP LTD Toumaz Limited (AIM: TMZ, 'Toumaz', or the 'Group'), a pioneer in ultra-low power wireless semiconductor technology, has published its unaudited trading update for the year ended 31 December 2014.
Highlights
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Full year revenues up 19.6% to £26.2 million (2013: £21.9 million)
- Healthcare revenues: £750,000 (2013: £60,000)
- Digital Audio revenues up 16.4% to £25.5 million (2013: £21.9 million) - up 23.3% at constant exchange rates
- R&D expenditure of £11.8 million (2013: £9.1 million)
- EBITDA1 loss of £9.8 million (2013: loss £9.4m)
- As at 31 December 2014 the Group's cash balance was £12.5 million
1. Earnings before interest, tax, depreciation, amortisation and share-based payments
Anthony Sethill, CEO of Toumaz said:
"2014 was an important year in our development as we passed a number of key milestones:
"In Healthcare, the first deployments of SensiumVitals® provided us with early revenues and valuable experience. Our deployments are expected to gain increasing traction across a number of territories over the next few months.
"The Digital Audio businesses also made good progress. Digital radio is both operationally profitable and cash generative - with increasingly positive cash-flows expected in the short and medium-term.
"Our connected audio operation has secured important design wins. The launch of our next generation chip in the second half of the year should generate significant interest."
Overview
The Group has traded in line with the Board's expectations, with strong revenue growth, the initial deployment of SensiumVitals® and disciplined cash management - whilst continuing to invest in new product development.
Over the year, operating cash consumption was £9.0 million, leaving the Group with £12.5 million of cash and well-positioned to achieve its objectives for 2015.
Healthcare
In 2014, the Group saw the first deployment of its SensiumVitals® wireless vital signs monitoring system in hospitals in the UK, US, Australia and Portugal. Revenues of £750,000 were up from £60,000 in 2013.
Significant deployments included Spire Healthcare's Montefiore Hospital in the UK, and Hurley Medical Center in Flint, Michigan.
The first installations, in a mix of general ward and emergency department settings, have proven the ability of SensiumVitals® to detect early signs of patient deterioration, thereby reducing patient risk and generating value for healthcare providers.
These early deployments have provided the Group with an opportunity to assess the system's performance in multiple, complex environments. Using this experience, the Group has upgraded the system's software to improve functionality and performance. Since completing this work at the end of December, a second tranche of deployments in France and Italy has begun.
With such clear ability to improve patient safety, customer interest in SensiumVitals® is strong. Worldwide, the Group has a qualified pipeline of over 130 hospitals; and the system has been showcased by NHS England as a significant new technology - http://www.england.nhs.uk/wp-content/uploads/2014/12/tecs-sensium.pdf.
Further system enhancements will be introduced in 2015, assisted by the Group's partnership with the University of Leicester, which is developing SpO2 and blood pressure monitoring for the next generation of SensiumVitals®.
Digital Audio
Digital Audio revenues grew 16.4% to £25.5 million (2013: £21.9 million) - up 23.3% at constant exchange rates - with strong performances from the Group's connected audio and digital radio business lines. In connected audio, significant design wins for its multi-room technologies led to revenue growth of 15.1%; whilst, in digital radio, strong demand in Europe resulted in revenue growth of 17.0%.
Market growth in connected audio is building as devices based on Wi-Fi rather than Bluetooth technologies grow in popularity. The Group has been able to leverage its relationship with Spotify to secure design wins for its multi-room technology with Philips and Harman Kardon.
Development of the Group's next generation connected audio silicon is making good progress; finished product is on schedule to ship in Q3 2015.
In digital radio, the Group maintained its share in a market showing healthy growth with particularly strong performances in Norway (Digital Switchover expected in 2017) and Germany (the public broadcaster recently confirming its long term commitment to DAB+). Prospects for further market growth, especially in Europe, appear positive.
Development of the Group's fourth generation digital radio chip is almost complete with first shipments of samples to customers made in December 2014. The current cycle of major R&D investment in digital radio is due to complete at the end of Q1 2015. This business line is then expected to generate significant positive cash-flows.
Balance sheet
As a result of tight cash management, the Group finished the year with net cash of £12.5 million (2013: £21.5 million).
Operating cash consumption was c. £9 million in 2014, with resources focused on the deployment of SensiumVitals® and the development of new silicon to support Digital Audio product releases in 2015.
After the significant development expenditure of recent years, and with digital radio entering a cash generative phase, the Group's product portfolio is now becoming more balanced from an investment perspective.
The Group expects to publish its full year results for the year to 31 December 2014 in mid-April 2015.
Enquiries:
Toumaz Limited | +44 (0)20 7391 0630 |
Anthony Sethill, Chief Executive Officer | |
Jonathan Apps, Chief Financial Officer | |
Peel Hunt LLP (Nominated Adviser and Broker) | +44 (0) 207 418 8900 |
Richard Kauffer/Daniel Harris | |
Instinctif Partners | +44 (0)20 7457 2020 |
Adrian Duffield/Kay Larsen |
About Toumaz (www.toumaz.com)
Toumaz Limited is a pioneer in low-power, wireless semiconductor and software technologies for healthcare and consumer audio. The company has two divisions, Sensium Healthcare and Frontier Silicon. Sensium Healthcare develops wireless solutions for patient monitoring. Frontier Silicon provides chips, modules and software for digital radio and connected audio devices.
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