TIDMTMZ
RNS Number : 9549E
Toumaz Limited
22 July 2016
For immediate release 22 July 2016
Toumaz Limited
('Toumaz' or the 'Group')
Sale of Healthcare division
and
Half year trading update
Toumaz (AIM: TMZ), a pioneer in wireless technologies, announces
the sale of its healthcare business, Sensium Healthcare
("Sensium"), and also provides a trading update for the six months
ended 30 June 2016.
Sale of Healthcare division
Toumaz has agreed the sale of Sensium to Dutch healthcare group,
The Surgical Company ("TSC"). TSC has been Sensium's distribution
partner in France, Germany and Benelux for the last three
years.
The consideration for Sensium comprises an initial payment of
GBP1 million on completion with an additional payment of GBP0.3
million on 31 December 2016. Toumaz will also receive royalties of
3% of net revenues for five years, followed by royalties of 2% of
net revenues for the following five years. If TSC chooses to sell
the business within the next four years, Toumaz will also receive
19% of the net proceeds.
The sale follows a strategic review which concluded that this
was the best option for the Group. The sale eliminates any further
cash losses associated with Healthcare - in H1 2016, the EBITDA
loss for Sensium was GBP3.9m - and will allow the Group to focus on
its Digital Audio division, Frontier Silicon, where the Board sees
significant growth opportunities.
Frontier Silicon is already the established market-leader in
Digital Radio and is benefitting from the growing adoption of DAB
radio internationally. In addition, the Group is well placed to
take advantage of the fast-growing demand for Wi-Fi-enabled smart
audio solutions.
Financial effects of the sale and losses attributable to
Sensium
For the year ended 31 December 2015, Sensium contributed revenue
to the Group of GBP0.3 million, an EBITDA loss of GBP6.9 million
and a loss before tax of GBP7.5 million. The total value of the net
assets being disposed of as at 31 December 2015 was GBP1.6
million.
Following the sale, the Group is expected to be cash-flow
positive in H2 2016.
Use of sale proceeds
The consideration will provide additional working capital to
support the growth and development of the Group.
Trading Update
As anticipated, Group revenues in the first half were marginally
lower at GBP13.7 million (GBP14.0 million in H1 2015) due mainly to
a decline in Healthcare revenues. Excluding Healthcare, revenues
were steady at GBP13.7 million (GBP13.8 million in H1 2015) ahead
of the launch of the Group's next generation smart audio product in
H2.
Group EBITDA improved by 35% to a loss of GBP3.6 million in H1
2016 (GBP5.5 million loss in H1 2015). This is largely attributable
to the reduction in the Group's research and development
('R&D') expenditure, which as planned decreased from GBP6.3
million in H1 2015 to GBP4.8 million in H1 2016.
Excluding Healthcare, the loss improved from GBP1.8 million in
H1 2015 to GBP35,000 in H1 2016 as R&D expenditure fell from
GBP4.7 million in H1 2015 to GBP2.6 million in H1 2016. R&D
expenditure is now focused primarily on software, with no new
silicon development programmes currently planned. The Board
anticipates that the Digital Audio division will be EBITDA positive
for FY 2016.
As at 30 June 2016, the cash balances stood at GBP3.8 million
(31 December 2015: GBP7.7 million).
Digital Radio
Digital Radio revenues increased 7% to GBP9.3 million (GBP8.7
million in H1 2015). The Group retained market share as volumes
increased, driven by the international expansion of DAB digital
radio, especially in continental Europe.
Smart Audio
Smart Audio revenues were GBP4.4 million (GBP5.1 million in H1
2015). This reflects a transition in the business to the Group's
next generation solution, incorporating Google's Cast for Audio
technology. Toumaz is one of a very small number of system
integrators to support Google Cast and interest from customers is
strong, particularly in the US. The Group's Cast-enabled solution
is on schedule to be released in Q3 2016, with first consumer
products incorporating the technology expected to be available in
Q4. Sales are expected to gain significant momentum in 2017.
The Board will provide a fuller update on trading and the
Group's future prospects at the announcement of the Half Year
results in the second half of September.
Anthony Sethill, CEO of Toumaz, commented:
"We are pleased to have completed the sale of the Healthcare
division, eliminating the associated cash burn and allowing us to
focus our financial and operational resources on Frontier Silicon,
our high growth Digital Audio business.
"Frontier Silicon benefits from market leading expertise both in
Digital Radio and increasingly in Smart Audio. The Group, excluding
Healthcare, remains on track to be EBITDA positive for the full
year and the growth opportunities for Digital and Smart Audio in
the years ahead are significant."
This announcement contains price sensitive information.
- Ends -
Enquiries:
Toumaz Limited
Anthony Sethill, Chief Executive Tel: +44 (0)
Officer 20 7391 0630
Jonathan Apps, Chief Financial www.toumaz.com
Officer
Peel Hunt LLP (Nominated Adviser
and Broker)
Richard Kauffer / Euan Brown Tel: +44 (0)
20 7418 8900
Buchanan
Sophie McNulty / Henry Harrison-Topham Tel: +44 (0)
/ Stephanie Watson 20 7466 5000
Toumaz@buchanan.uk.com www.buchanan.uk.com
Notes to editors:
About Toumaz
Toumaz Limited is a pioneer in digital radio and smart audio
technologies, providing chips, modules and software for consumer
electronic devices. For further information, please visit
www.toumaz.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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