FST.L Regulatory News (FST)

21 January 2016

Toumaz Limited

Year-end trading update

Toumaz Limited (AIM: TMZ, 'Toumaz', or the 'Group'), a pioneer in ultra-low power wireless semiconductor technology, has published its trading update for the year ended 31 December 2015. 

Highlights

· Group revenues up 22.3% to £32.1 million (2014: £26.2 million)

o Digital Audio revenues up 24.5% to £31.8 million (2014: £25.5 million) - up 15.3% at constant exchange rates

o Healthcare revenues: £300,000 (2014: £750,000)

· R&D expenditure of £11.3 million (2014: £11.8 million)

· EBITDA loss £7.8 million (2014: loss £9.8m) 

· As at 31 December 2015, the Group's cash balance was £7.7 million

Anthony Sethill, CEO of Toumaz, said: 

"Our Digital Audio business, Frontier Silicon, had another successful year with digital radio revenues up 14.8% and connected audio up 48.1%.

"Digital Audio is well positioned to make strong progress in 2016. Development of our fourth generation digital radio chip was completed in April and is now shipping in significant volumes. Our next generation connected audio solution, incorporating Google Cast, is due for release in the middle of 2016. This project represents a major opportunity, as Frontier Silicon is one of a very small number of system integrators to be working with Google in connected audio.

"In Healthcare, the Board appointed advisors to assess the best option for exploiting SensiumVitals® and its IP. This work is now under way and is expected to complete in the middle of 2016."

Overview

Group revenues were up 22.3% to £32.1 million (2014: £26.2 million), driven by Digital Audio. Group EBITDA losses were reduced by 20% to £7.8 million (2014: loss £9.8m).

Digital Audio is expected to see continued strong growth in 2016.

In Healthcare, the Board has appointed advisors to help assess options for the business. The assessment is expected to be completed in the middle of 2016.

As of 31 December 2015, the Group had cash of £7.7 million, having drawn down its £5 million debt facility. R&D expenditure peaked in H1 2015. The Board expects the Group to be cash-flow positive in mid-2016.

Digital Audio

Frontier Silicon, the Digital Audio business, performed well in 2015. Revenues were up 24.5% to £31.8m (2014: £25.5 million) with its two units, digital radio and connected audio, both achieving healthy growth.

The business has been EBITDA positive, before the allocation of central overheads, since April 2015 and for the year as a whole.

Digital radio

Digital radio revenues were up 14.8% to £20.7 million (2014: £18.0 million) - driven by unit sales growth of 15.3% to 4.4 million (2014: 3.8 million).

The Group has retained its strong market leadership position and has benefited from healthy growth in key territories - especially in Norway, Germany and the Netherlands.

Major R&D expenditure in digital radio is complete. The Group's fourth generation chip is shipping in volumes and delivering improved margins to the business. Prospects for the digital radio business in 2016 are favourable.

Connected audio

Connected audio revenues were up 48.1% to £11.1 million (2014: £7.5 million), reflecting a combination of design wins and high market growth. Unit shipments grew by 34.4% to 0.8 million (2014: 0.6 million).

The Group's next generation solution incorporating Google Cast is due for release in mid-2016. This will target the mid/high end segments of the wireless speaker/soundbar market. Frontier Silicon is one of a very small number of system integrators working with Google on the Cast project.

Frontier Silicon's value-add is in software, system integration and its close working relationship with the Google Cast team. Silicon for the project is provided by Marvell Technology Group.

Customer interest in Frontier Silicon's next generation connected audio solution, incorporating Google Cast software, is positive.

Healthcare

A reassessment of the financial prospects for Sensium Healthcare in 2015 resulted in the Board initiating a review of strategic options for the business. Advisors have been appointed with a remit to engage with potential financial or strategic investors. This process is under way and the outcome is expected in the middle of 2016.

The business remains focused on securing commercial trials of the SensiumVitals® system - with the goal of delivering compelling evidence of the system's ability to improve patient outcomes and enhance healthcare economics for hospitals.

Trials are currently under way in three NHS hospitals, including St James's University Hospital, Leeds and the Queen Elizabeth Hospital, Birmingham.

The business appointed a new US-based Chief Commercial Officer in September. Several new commercial trials in Europe and North America are expected to start in the coming months.

Balance sheet

The Group ended the year with cash of £7.7 million (2014: £12.5 million) having drawn down its £5.0 million debt facility. With R&D expenditure past its peak, the Group is expected to be cash-flow generative in mid-2016.

The Group expects to publish its full year results for the year to 31 December 2015 in the second half of March 2016.

Enquiries

About Toumaz (www.toumaz.com)

Toumaz Limited is a pioneer in low-power, wireless semiconductor and software technologies for digital audio and healthcare. The company has two divisions, Frontier Silicon and Sensium Healthcare. Frontier Silicon provides chips, modules and software for digital radio and connected audio devices. Sensium Healthcare develops wireless solutions for patient monitoring.