TIDMTMZ
RNS Number : 8734K
Toumaz Limited
27 September 2016
For immediate release 27 September 2016
Toumaz Limited
('Toumaz', or the 'Group' or 'the Company')
Interim Results
'A period of transition'
Toumaz Limited (AIM: TMZ), a pioneer in technologies for Digital
Radio and Smart Audio devices, publishes its results for the six
months ended 30 June 2016.
Key Points
-- Healthcare division sold in July 2016 for GBP1.3 million plus
ten-year royalty agreement - eliminating associated cash losses
-- Continuing operations moving towards break-even; expected to
be EBITDA and trading cash flow positive in H2 2016
Proposal to change name of Toumaz Limited to Frontier Smart
Technologies Group Limited
-- Key financials for the continuing business:
o Revenues steady at GBP13.7 million (H1 2015: GBP13.8
million)
o R&D expenditure reduced to GBP2.8 million (H1 2015: GBP4.7
million) - no further silicon development planned in foreseeable
future
o EBITDA loss improved to GBP0.04million (H1 2015: loss of
GBP2.2 million)
o Cash attributable to continuing business at 30 June 2016 of
GBP3.8 million (31 December 2015: GBP7.7 million)
Anthony Sethill, CEO of Toumaz, commented: "Having sold
Healthcare and eliminated the associated losses and cash burn, we
have created a solid platform for profitable growth. The Group is
now fully focused on Digital Audio, where our established
leadership in Digital Radio provides a platform from which to
develop our position in Smart Audio."
Enquiries:
+44 (0) 20 7391
Toumaz Limited 0630
Anthony Sethill, Chief Executive
Officer
Jonathan Apps, Chief Financial
Officer
Peel Hunt LLP (Nominated Adviser +44 (0) 20 7418
and Broker) 8900
Richard Kauffer/ Euan Brown
+44 (0) 20 7466
Buchanan Communications Limited 5000
Sophie McNulty/ Henry Harrison-Topham/
Steph Watson
About Toumaz
The Toumaz Group is a pioneer in software and hardware
technologies for Digital Audio devices.
Having sold its Healthcare division in July 2016, the Group now
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 company is headquartered in London, with engineering, sales
and operations teams in Cambridge, Timisoara (Romania), Hong Kong,
and Shenzhen.
www.toumaz.com
Introduction
The first half of 2016 was a period of transition for Toumaz,
culminating shortly after the period-end with the sale of the
Group's Healthcare division, Sensium Healthcare. The disposal
followed a strategic review announced by the Board in September
2015 and eliminates the cash losses associated with the Healthcare
business. The Group is now focused entirely on its Digital Audio
division, Frontier Silicon ('Frontier'), where the key development
priority has been the completion of Minuet, its next generation
Smart Audio platform incorporating Google Cast for Audio. This
programme is in mass production - with first shipments due in Q4
2016.
Looking ahead, the Group expects to be EBITDA positive in the
second half of 2016. As a result, despite the considerable changes
undertaken in the year, the Board expects the Group to be close to
break-even on a continuing basis for the current financial year as
a whole.
In view of these changes, Toumaz is today also announcing
separately a proposal to change its name to Frontier Smart
Technologies Group Limited, together with a 40 for 1 share
consolidation, subject to shareholder approval at a General Meeting
to be held on 1 November 2016.
Overview of H1 performance
Given the disposal of the Healthcare division, Toumaz is
reporting H1 results on both a combined and continuing operations
basis. Excluding Healthcare, Group revenues held broadly steady at
GBP13.7 million (H1 2015: GBP13.8 million). Growth in Digital Radio
revenues were offset by a fall in Smart Audio revenues - the latter
reflecting a comparison against H1 2015 which included one-off
project related revenues of GBP0.5 million and the process of
transitioning to the Group's next generation Smart Audio platform,
Minuet. Combined revenues including Healthcare were GBP13.7 million
(H1 2015: GBP14.0 million).
The Group benefitted from changes in exchange rates as
Frontier's revenues are predominantly in US dollars. In constant
exchange rates, Group revenues, excluding Healthcare, were down 6%
year on year.
At an operational level, Frontier's priorities in H1 2016 were:
the commercialisation of the Group's existing solutions in Digital
Radio and Smart Audio; and the completion of Minuet, which allows
smart audio devices, such as wireless speakers, to incorporate
Google's new Cast for Audio technology.
In Digital Radio, the Group has maintained its market leadership
position. The Group's Digital Radio revenues increased 7% to GBP9.3
million (H1 2015: GBP8.7 million), driven by increased volumes (up
11% from 1.8 million to 2.0 million units). Volume growth is due to
the expansion of DAB digital radio in continental Europe,
especially in Germany and the Netherlands (launched respectively in
2011 and 2013). Average prices fell slightly, reflecting a gradual
shift to newer, lower cost solutions. Growth is expected to slow in
H2, but full year revenues for Digital Radio are expected to be
marginally up on 2015.
The 14% decline in Frontier's Smart Audio revenues to GBP4.4
million in H1 2016 (H1 2015: GBP5.1 million) was mainly due to the
non-recurrence of one-off project fees of GBP0.5 million in H1
2015. There was also a reduction in volumes (down 7% from c.350,000
to 330,000), which was partially offset by a slight increase in
average selling prices (up 3%). The decline in volumes was due to
customers awaiting the arrival of Minuet, the Group's new
Cast-enabled solution.
The Minuet development programme is now in mass production -
slightly later than originally anticipated - and is expected to
ship in Q4 2016.
In September 2016, the Group announced its first design win for
Minuet with Harman, the world's largest manufacturer of speakers,
for its new Google Cast-enabled wireless speaker, the JBL Playlist.
First revenues for this product are expected in Q4 2016.
Frontier's R&D expenditure in H1 2016 was GBP2.8 million -
down 40% (H1 2015: GBP4.7m). With the completion of silicon
development in 2015, the majority of Frontier's R&D is now
software development for the Smart Audio market, with teams based
in Cambridge and Romania. Where appropriate, it also licenses
technologies from third parties. Frontier is not planning any new
silicon developments.
Combined Group EBITDA improved to a loss of GBP5.0 million in H1
2016 (H1 2015: loss of GBP5.5 million), with the majority of these
losses incurred by the Healthcare business. Excluding Healthcare,
the loss improved to GBP0.04 million in H1 2016 (H1 2015: GBP2.2
million).
At the end of June 2016, the Group had GBP3.8 million in cash.
The Group is expected to be EBITDA positive in the second half of
2016.
Disposal of the Healthcare division
The Board announced a strategic review of the loss-making
Healthcare business, Sensium, in September 2015. Advisers were
appointed and, having considered a full range of options, it was
clear that significant investment would be required to see the
business through to break-even. The Board therefore decided that a
sale of Sensium was the most effective means of delivering
shareholder value.
Proceeds from the sale (GBP1.0 million on completion and a
further GBP0.3 million on 31 December 2016) will be used to fund
working capital requirements. In addition, the Group will benefit
from a 10 year royalty stream (3% of net revenues for five years,
followed by 2% of net revenues for the following five years). If
the new owner, The Surgical Company, sells the business within the
next four years, Toumaz will receive 19% of the net proceeds.
Proposed Change of Name and Share Consolidation
Change of Name
In order to reflect the Group's change in focus to a pure play
Digital Radio and Smart Audio technology company, it proposes to
change its name from Toumaz Limited to Frontier Smart Technologies
Group Limited with effect from 2 November 2016. The London Stock
Exchange TIDM (ticker) for the Ordinary Shares will be changed from
"TMZ.L" to "FST.L", which will also take effect from 08:00 A.M. on
2 November 2016.
Proposed Share Consolidation
The Board believes that a consolidation of the Company's share
capital ("the Share Consolidation") will result in a more
appropriate number of shares in issue for a company of Toumaz's
size and may also help to make the New Ordinary Shares more
attractive to investors going forward.
As at 30 June 2016, the Company had 1,709,830,865 existing
ordinary shares of GBP0.0025 each ("Existing Ordinary Shares") in
issue. With shares of low denominations, small absolute movements
in the share price can represent large percentage movements
resulting in high volatility. The Share Consolidation is expected
to assist in reducing the aforementioned volatility in the
Company's share price and enable a more consistent valuation of the
Company. The Board also believes that the bid/offer spread on
shares priced at low absolute levels can be disproportionate to the
share price and therefore to the detriment of shareholders.
The Directors therefore propose that every 40 Existing Ordinary
Shares be consolidated into one new ordinary share with a nominal
value of 10p (currently, 0.25p).
Other than a change in nominal value, the New Ordinary Shares
will carry equivalent rights under the Articles of Association to
the Existing Ordinary Shares.
Further details of the proposed share consolidation will be
provided to shareholders in the Notice of General Meeting.
Growth opportunity
The Board believes that growth opportunities exist in both the
Digital Radio and Smart Audio markets and the introduction of voice
recognition as a feature for Smart Audio and Smart Home devices
could provide additional upside.
Frontier is well placed to succeed in these markets: it has a
strong track record in delivering high quality, reliable technology
solutions for consumer audio products and has existing
relationships with leading consumer audio brands.
Digital Radio
The Group is the world leader in the provision of chips and
modules for consumer DAB digital radios. Further market volume
growth is likely in the medium and long term as the first countries
move towards Digital Switchover (Norway in 2017 and Switzerland in
2020-24), and other European markets including Italy, France and
Belgium, begin to develop.
Due to its maturity and population size, the UK is the Group's
largest market for DAB Digital Radios, accounting for about a third
of total volumes. A decision by the UK government to set a date for
Digital Switchover ('DSO') could provide a significant uplift in
sales. The market criteria(1) for a potential decision on DSO are
expected to be achieved in the second half of 2018, but it is too
early to say if or when a date for DSO might be set.
The second largest market for DAB Digital Radio is Germany.
Receiver sales volumes are growing strongly, up 27% in H1 2016.
There is growing political support for measures which could
accelerate this growth. Greater clarity on the impact of this
support should be forthcoming over the next 12 months.
Frontier plays an active role helping to build political and
broadcaster support for DAB Digital Radio across Europe.
For the Group, having completed the development of its fourth
generation DAB chip in 2015, the strategy in Digital Radio is to
maximise profitability by retaining market share, maintaining
margins and adopting a prudent approach to R&D.
Smart Audio
The Group has been active in Wi-Fi enabled audio solutions for
several years, starting with solutions for Internet Radio and then
incorporating online music services, such as Spotify. In 2015, the
Group announced it would be working with Google to develop a new
solution incorporating Google's Cast for Audio technology. Frontier
is one of a small number of solution providers working with Google
on this technology.
Market volumes for Wi-Fi enabled Smart Audio devices (speakers,
soundbars, Hi-Fi systems, audio / video receivers and Internet
radios) are expected to grow in the next three years. The
introduction of voice personal assistants may also represent an
additional driver of the Smart Audio market. With the inclusion of
microphones in a speaker, users can control the speaker via voice
commands. These speakers can also offer connectivity to the
internet and other smart home appliances, all controlled via voice.
The Amazon Echo is the first such device to have successfully
launched and Google has announced plans to introduce a
voice-controlled Google Home Assistant before the end of 2016(2)
.
Frontier is well placed to succeed in this market given its
engineering skills, track record of delivery and its extensive
customer and ecosystem relationships.
________________________________ (1) DAB transmissions should
cover 97% of the population and 50% of radio listening should be
digital (2)
http://www.theverge.com/2016/5/18/11688376/google-home-speaker-announced-virtual-assistant-io-2016
Outlook
With the sale of the Healthcare division and re-focusing on
Digital Audio, the Group has established a solid platform on which
to build as it seeks to take full advantage of the medium and long
term growth opportunities in both Digital Radio and Smart
Audio.
Excluding Healthcare, Group full year revenues for 2016 are
expected to show single figure growth year on year. As outlined
above, Digital Radio revenues are expected to be broadly flat
compared to 2015. Smart Audio revenues are expected to improve in
the second half of the year relative to H2 2015. The first
shipments of Minuet, Frontier's Google Cast-enabled solution, are
expected in Q4 2016.
The UK currently accounts for about one third of Group revenues.
At a global level, Group revenues (in Sterling) are likely to
benefit from a sustained drop in the Sterling / Dollar exchange
rate. It is too early to judge if the Brexit decision will have a
significant impact on UK trading but the increase in import prices
may have a negative impact on volumes.
Historically, end-users for Frontier-based products (DAB and
Internet radios) have been predominantly European-based. With the
introduction of the Group's Google Cast-enabled Smart Audio
solution, the North American market is expected to become more
important for Toumaz from 2017 onwards.
Having disposed of the Healthcare business, the Group expects to
be EBITDA positive in H2 2016 and to be close to break-even on a
continuing basis for FY 2016.
Financial Review
As noted previously, the Group disposed of its Healthcare
subsidiaries on 22 July 2016 and took the decision to close its
silicon development subsidiary on the same day. The results of
these entities are disclosed as discontinued businesses in these
statements. Numbers disclosed in the narrative below relate solely
to the continuing business and comparatives have been restated to
exclude the discontinued businesses.
H1 revenues for the continuing operations were broadly steady at
GBP13.7 million (2015: GBP13.8m) with gross margin also similar to
the prior year at GBP6.0 million (2015: GBP6.2 million).
Behind these numbers, Digital Radio revenues grew 7% to GBP9.3
million (H1 2015: GBP8.7 million) driven by an increase in unit
sales to 2.0 million from 1.8 million. The key driver of this
volume growth has been the continued growth of DAB Digital Radio in
continental Europe. The ASP per unit has declined from GBP4.77 to
GBP4.52 as a result of a move away from Chorus 3 based products
towards the more cost-optimised Chorus 4 products.
Smart Audio revenues decreased by 13.7% to GBP4.4 million (2015:
GBP5.1 million) mainly due to the non-recurrence of one-off project
related revenues (GBP0.5 million) in H1 2015. In addition, Smart
Audio volumes are down year on year to 329,000 (2015: 354,000k) as
customers delay placing orders until Minuet enters production; this
was partially offset by a 3% rise in ASPs from GBP12.94 to
GBP13.31.
The Group has benefited from the recent movement in the USD/GBP
exchange rate as the majority of its revenue is booked in dollars.
Against this however is the possible increase in retail selling
prices in the UK from the reduced purchasing power of sterling. In
constant dollar terms revenue for H1 2016 is $19.8m (2015:
$21.4m).
Overall gross margins are 1% down from 44.9% in 2015. Gross
profit has remained broadly flat at GBP6.0 million (2015: GBP6.2
million).
EBITDA loss can be calculated as:
Six months Six months
to 30 June to 30 June
2016 2015
GBP'000 GBP'000
Revenue 13,659 13,790
Cost of sales 7,657 7,595
Gross profit 6,002 6,195
Research and development 2,762 4,696
Sales and admin expenses 3,275 3,727
EBITDA (loss) (35) (2,228)
Research and development costs are expensed where possible and
mainly reflect the software development on Minuet. This has just
entered mass production with first sales expected in Q4 2016. As
stated previously R&D expenditure peaked in H1 2015 and shows a
40% reduction year-on-year.
EBITDA loss has reduced significantly and the Frontier business
is trending towards a break-even position for the full year
2016.
Other non-trading costs included in the full profit and loss
account primarily comprise the non-cash employee share based
payments and amortisation and depreciation. In addition, due to the
disposal of Healthcare, a charge of GBP9.4m has been taken in
respect of an impairment of intangible fixed assets.
Group pre-tax loss was GBP2.0 million (2015: loss GBP7.4
million) with a loss per share on the continuing business of 0.02p
(2015: loss 0.41p).
Cash and cash equivalents at 30 June 2016 including discontinued
activities was GBP3.8 million (31 Dec 2015: GBP7.5 million) and the
balance at 31 August 2015 was GBP3.4 million. The Group is expected
to be trading cash flow positive in the second half.
Toumaz Limited
Unaudited Interim Results
for the six month period ended 30 June 2016
Statement of Comprehensive Income
for the period ended 30 June 2016
Unaudited Restated Unaudited Restated
Six months Six months Audited
ended ended Year ended
30 June 2016 30 June 2015 31 December
Note 2015
GBP'000 GBP'000 GBP'000
Revenue 3 13,659 13,790 31,721
Cost of sales (7,657) (7,595) (18,030)
---------------------------- ---- ------------- ------------------ ------------
Gross profit 6,002 6,195 13,691
---------------------------- ---- ------------- ------------------ ------------
Amortisation of intangible
assets (1,186) (1,259) (2,480)
Impairment 6 - (3,016) (3,016)
Depreciation (175) (183) (371)
Share based payment (380) (678) (1,229)
Exceptional items - - (1,122)
Research & development (2,762) (4,695) (7,362)
Sales & administrative
expenses - other (3,275) (3,727) (7,110)
---------------------------- ---- ------------- ------------------ ------------
Total administrative
expenses (7,778) (13,558) (22,690)
---------------------------- ---- ------------- ------------------ ------------
Loss from continuing
operations (1,776) (7,363) (8,999)
Finance income 5 12 15
Finance charges (189) - (75)
---------------------------- ---- ------------- ------------------ ------------
Loss before taxation (1,960) (7,351) (9,059)
Taxation 1,373 346 1,133
---------------------------- ---- ------------- ------------------ ------------
Loss for the period
from continuing operations (587) (7,005) (7,926)
---------------------------- ---- ------------- ------------------ ------------
Loss for the period
from discontinued
operations 7 (14,160) (3,291) (6,809)
Loss for the Period (14,747) (10,296) (14,735)
---------------------------- ---- ------------- ------------------ ------------
Other comprehensive
(expense)/income
Items that will be
reclassified subsequently
to profit or loss
Exchange differences
on translating foreign
operations (31) (11) 59
Other comprehensive
income/(expense) for
the period (31) (11) 59
---------------------------- ---- ------------- ------------------ ------------
Total comprehensive
loss for the period (14,778) (10,307) (14,676)
---------------------------- ---- ------------- ------------------ ------------
Earnings per share
Basic earnings per share
-From continuing operations (0.03)p (0.41)p (0.47)p
4 (0.83)p (0.20)p (0.40)p
-From discontinued operations
4
------------------------------- ---------- ---------- ----------
Consolidated Statement of Financial Position
at 30 June 2016
Unaudited Unaudited Audited
Note 30 June 2016 30 June 2015 31 December 2015
Assets GBP'000 GBP'000 GBP'000
Non-current assets
Goodwill 5 8,536 19,118 19,118
Other intangible assets 6 9,701 14,271 11,519
Property, plant and equipment 514 737 707
18,751 34,126 31,344
------------------------------------------------------------- ------ ------------- ------------- -----------------
Current assets
Inventories 3,144 2,935 2,666
Tax receivable 934 - 1,301
Trade and other receivables 8 7,302 4,796 6,342
Cash and cash equivalents 9 3,378 5,521 7,748
------------------------------------------------------------- ------ ------------- ------------- -----------------
Total current assets 14,758 13,252 18,057
------------------------------------------------------------- ------ ------------- ------------- -----------------
Assets included in disposal group classified as held for sale 7 3,592 - -
------------------------------------------------------------- ------ ------------- ------------- -----------------
Total assets 37,101 47,378 49,401
------------------------------------------------------------- ------ ------------- ------------- -----------------
Liabilities
Current liabilities
------------------------------------------------------------- ------ ------------- ------------- -----------------
Trade and other payables 10 9,975 9,134 11,239
------------------------------------------------------------- ------ ------------- ------------- -----------------
Total current liabilities 9,975 9,134 11,239
------------------------------------------------------------- ------ ------------- ------------- -----------------
Other liabilities > 1 year 3,453 - 3,735
Liabilities included in disposal group classified as held for
sale 7 3,631 - -
Total liabilities 17,059 9,134 14,974
------------------------------------------------------------- ------ ------------- ------------- -----------------
Equity
Share capital 11 4,275 4,257 4,262
Share premium 115,300 115,251 115,300
Share based payment reserve 4,881 4,003 4,501
Foreign exchange reserve (66) (105) (35)
Retained earnings (104,348) (85,162) (89,601)
Total equity 20,042 38,244 34,427
------------------------------------------------------------- ------ ------------- ------------- -----------------
Total equity and liabilities 37,101 47,378 49,401
------------------------------------------------------------- ------ ------------- ------------- -----------------
Consolidated Statement of Changes in Equity
for the period ended 30 June 2016
Share
based Foreign
Share Share payment Retained exchange Total
capital premium reserve earnings reserve equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January
2016 4,262 115,300 4,501 (89,601) (35) 34,427
Share-based
payments - - 380 - - 380
Issue of share
capital 13 - - - - 13
Transactions
with owners 13 - 380 - - 393
--------- -------- --------- --------- ---------- --------
Loss for the
period - - - (14,747) - (14,747)
Other comprehensive
losses
Exchange differences
on translating
foreign operations - - - - (31) (31)
Total comprehensive
loss - - - (14,747) (31) (14,778)
--------- -------- --------- --------- ---------- --------
At 30 June
2016 4,275 115,300 4,881 (104,348) (66) 20,042
========= ======== ========= ========= ========== ========
Share
based Foreign
Share Share payment Retained exchange Total
capital premium reserve earnings reserve equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January
2015 4,195 115,251 3,325 (74,866) (94) 47,811
Share-based
payments - - 678 - - 678
Contingent - -
shares issued - - - -
Issue of share
capital 62 - - - - 62
Transactions
with owners 62 - 678 - - 740
--------- -------- --------- --------- ---------- --------
Loss for the
period - - - (10,296) - (10,296)
Other comprehensive
losses
Exchange differences
on translating
foreign operations - - - - (11) (11)
Total comprehensive
loss - - - (10,296) (11) (10,307)
--------- -------- --------- --------- ---------- --------
At 30 June
2015 4,257 115,251 4,003 (85,162) (105) 38,244
========= ======== ========= ========= ========== ========
Share
based Foreign exchange
Share Share payment Retained reserve Total
capital premium reserve earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January
2015 4,195 115,251 3,325 (74,866) (94) 47,811
Share-based
payments - - 1,229 - - 1,229
Issue of share
capital 63 - - - - 63
Cost of share - -
issue - - - -
Deferred consideration
- retention
element 4 49 (53) - - -
Transactions
with owners 67 49 1,176 - - 1,292
--------- -------- --------- --------- ------------------ --------
Loss for the
period - - - (14,735) - (14,735)
Other comprehensive
losses
Exchange differences
on translating
foreign operations - - - - 59 59
Total comprehensive
loss - - - (14,735) 59 (14,676)
--------- -------- --------- --------- ------------------ --------
At 31 December
2015 4,262 115,300 4,501 (89,601) (35) 34,427
========= ======== ========= ========= ================== ========
Consolidated Cash Flow Statement
For the period ended 30 June 2016
Unaudited Unaudited
Six months Six months Audited
ended ended Year ended
30 June 30 June 31 December
2016 2015 2015
GBP'000 GBP'000 GBP'000
Cash flows from operating
activities
Loss before taxation (1,960) (7,351) (9,059)
Amortisation 1,186 1,259 2,480
Depreciation 175 183 371
Impairment of prepayments - 3,016 3,016
Exceptional items - - 1,122
Share based payments 380 678 1,229
Net interest (received)/
paid 184 (12) 60
Increase in inventories (478) (1,371) (1,102)
Increase in trade and
other receivables (290) (622) (2,038)
(Decrease)/ increase
in trade and other payables (682) 271 1,111
Foreign exchange movements (31) (11) 59
Tax refund 1,685 1,999 1,998
Net cash inflow / (outflow)
from continuing operations 169 (1,961) (753)
------------------------------ ----------- ----------- ------------
Net cash outflow from
discontinuing operations (3,636) (3,238) (6,985)
------------------------------ ----------- ----------- ------------
Cash flow from investing
activities
Purchase of property,
plant and equipment (56) (399) (578)
Purchase on intangible
assets (63) (1,385) (1,389)
Interest paid (184) (12) -
Net cash used in investing
activities (303) (1,796) (1,967)
------------------------------ ----------- ----------- ------------
Cash flow from financing
activities
Loan (300) - 5,000
Proceeds from issue of
share capital - 3 (75)
Share issue costs - - 15
Net cash inflow from
financing activities (300) 3 4,940
------------------------------ ----------- ----------- ------------
Net change in cash and
cash equivalents (4,070) (6,992) (4,765)
------------------------------ ----------- ----------- ------------
Cash and cash equivalents
at beginning of period 7,448 12,513 12,513
Cash and cash equivalents
at end of period 3,378 5,521 7,748
------------------------------ ----------- ----------- ------------
Notes to the Interim Report
For the period ended 30 June 2016
1. Nature of operations and general information
Toumaz Limited and subsidiaries' ('the Group') principal
activity is that of commercial exploitation of wireless
infrastructure technologies with commercial propositions for
consumer electronic sector.
On 22 July 2016, the Group disposed of its subsidiary companies
that were involved with wireless healthcare technologies. The
activities of those companies has been classifies as "discontinued"
in these statements. In addition, the Group also decided to close
Frontier Microsystems a company involved with low power RF
technologies and the results of that company have also been treated
as "discontinued" in these statements.
Toumaz Limited is the Group's ultimate parent company. It is
incorporated in the Cayman Islands. The address of Toumaz Limited's
registered office is Elgin House, 119 Elgin Avenue, George Town,
Grand Cayman, Cayman Islands. Toumaz Limited's shares are listed on
the Alternative Investment Market of the London Stock Exchange.
Toumaz Limited's consolidated interim financial statements are
presented in Pounds Sterling (GBP), which is also the functional
currency of the parent company.
The financial information set out in this interim report does
not constitute statutory accounts. The Group's statutory financial
statements for the year ended 31 December 2015 are available from
the Group's website. The auditor's report on those financial
statements was unqualified.
2. Accounting Policies
Basis of Preparation
These interim condensed consolidated financial statements are
for the six months ended 30 June 2016. They have been prepared
following the recognition and measurement principles of IFRS. They
do not include all of the information required for full annual
financial statements, and should be read in conjunction with the
consolidated financial statements of the Group for the year ended
31 December 2015.
These financial statements have been prepared on the going
concern basis and under the historical cost convention.
These condensed consolidated interim financial statements have
been prepared in accordance with the accounting policies adopted in
the last annual financial statements for the year to 31 December
2015.
The accounting policies have been applied consistently
throughout the Group for the purposes of preparation of these
condensed consolidated interim financial statements.
3. Revenue by sector
Unaudited Unaudited Audited
30 June 30 June 31 December
2016 2015 2015
GBP'000 GBP'000 GBP'000
Digital Radio 9,273 8,685 20,647
Connected Audio 4,386 5,105 11,074
Revenue 13,659 13,790 31,721
---------------- --------- --------- ------------
4. Loss per share
The calculation of the basic loss per share is based on the loss
attributable to ordinary shareholders divided by the weighted
average number of shares in issue during the period. The impact of
the share options and share warrant on the loss per share is
anti-dilutive.
Basic loss per share
Unaudited Unaudited Audited
Six months Six months Year ended
ended ended 31 December
30 June 2016 30 June 2015 2015
Loss for the period attributable to equity shareholders - continuing
operations GBP587,000 GBP7,005,000 GBP7,926,000
Loss for the period attributable to equity shareholders - discontinuing
operations GBP14,160,000 GBP3,291,000 GBP6,809,000
Weighted average number of 0.25p ordinary shares 1,705,740,348 1,702,925,947 1,701,426,768
(Loss) per share - basic and diluted - continuing operations (0.03)p (0.41)p (0.47)p
(Loss) per share - basic and diluted - discontinuing operations (0.83)p (0.20)p (0.40)p
5. Goodwill
Frontier Sensium Frontier
Silicon Healthcare Microsystems Total
GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 1 January 2015 8,536 10,582 5,951 25,069
Additions - - - -
-------- ----------- ------------- -------
At 30 June 2015 8,536 10,582 5,951 25,069
Additions - - - -
-------- ----------- ------------- -------
At 31 December 2015 8,536 10,582 5,951 25,069
Additions - - - -
Assets held for disposal - (1,135) - (1,135)
At 30 June 2016 8,536 9,447 5,951 23,934
======== =========== ============= =======
Impairment
At 1 January 2015 - - 5,951 5,951
Charge in period - - - -
-------- ----------- ------------- -------
At 30 June 2015 - - 5,951 5,951
Charge in period - - - -
-------- ----------- ------------- -------
At 31 December 2015 - - 5,951 5,951
Charge in period - - - -
Impairment - 9,447 - 9,447
At 30 June 2016 - 9,447 5,951 15,398
======== =========== ============= =======
Net book amount at 30 June
2016 8,536 - - 8,536
======== =========== ============= =======
Net book amount at 30 June
2015 8,536 10,582 - 19,118
======== =========== ============= =======
Net book amount at 31 December
2015 8,536 10,582 - 19,118
======== =========== ============= =======
Sensium Healthcare
During the half-year, the Group has taken an impairment against
the goodwill arising on consolidation in respect Sensium
Healthcare. Sensium Healthcare and its subsidiaries were first
acquired on 3 November 2005 and were disposed of on 22 July 2016,
shortly after the period end. The calculation of the value to be
impaired was made by deducting the fair value of expected proceeds
from disposal including royalties, less any costs of disposal, from
the carrying value of the goodwill.
Frontier Microsystems
Goodwill relating to Toumaz Microsystems results from the
acquisition of Future Waves UK Limited and Toumaz Asia on 20 May
2009.
Frontier Silicon
Goodwill relating to Frontier Silicon results from the
acquisition of Frontier Silicon Ltd on 20 August 2012.
6. Other intangible assets
Marketing Customer Intellectual Licence
intellectual intellectual property & development
property property fees Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 1 January 2015 4,000 1,690 17,009 16,562 39,261
Additions - - - 1,383 1,383
------------- ------------- ------------ -------------- -------
At 30 June 2015 4,000 1,690 17,009 17,945 40,644
Additions - - - 6 6
Disposals - - - (1,378) (1,378)
At 31 December 2015 4,000 1,690 17,009 16,573 39,272
Foreign exchange on
opening balances - - - 3 3
Additions - - - 80 80
Disposals - - - (14) (14)
Assets held for disposal - - - (933) (933)
------------- ------------- ------------ -------------- -------
At 30 June 2016 4,000 1,690 17,009 15,709 38,408
============= ============= ============ ============== =======
Amortisation
At 1 January 2015 933 329 9,827 10,912 22,001
Charge in period 200 70 634 452 1,356
Impairment - - - 3,016 3,016
------------- ------------- ------------ -------------- -------
At 30 June 2015 1,133 399 10,461 14,380 26,373
Charge period 200 71 634 475 1,380
------------- ------------- ------------ -------------- -------
At 31 December 2015 1,333 470 11,095 14,855 27,753
Charge period 200 70 634 282 1,186
Disposals - - - (11) (11)
Assets held for disposal - - - (221) (221)
At 30 June 2016 1,533 540 11,729 14,905 28,707
------------- ------------- ------------ -------------- -------
Net book amount at
30 June 2016 2,467 1,150 5,280 804 9,701
============= ============= ============ ============== =======
Net Book amount at
30 June 2015 2,867 1,291 6,548 3,565 14,271
============= ============= ============ ============== =======
Net book amount at
31 December 2015 2,667 1,220 5,914 1,718 11,519
============= ============= ============ ============== =======
Intellectual property
Intellectual property relates to the valuation of beneficial
licence agreements, trade names and customer relationships in
Sensium Healthcare and Frontier Silicon at the date of their
original acquisition.
Licence & development fees
The licences relate to technology on new projects essential to
the future development of the new generation digital chips. The
licences will be amortised in accordance with the Group accounting
policy and will be subject to an annual impairment review.
Impairment
In the period to 30 June 2015 the Company resolved to cease
designing its own silicon for its next generation connected audio
solution and to use third party silicon. Subsequently, in August
2015, a termination agreement was signed with Imagination
Technologies Plc who had been designing the chip on the company's
behalf.
At the time the decision was taken to cease development of its
own silicon, the company was carrying GBP4.5m of licensed IP on its
balance sheet in respect of third party licences purchased to
enable the chip development. The board have reviewed these licences
for impairment and consider that they are no longer required for
the on-going development of the company's other products. Included
in the termination agreement with Imagination, who will continue to
develop the solution, are provisions for royalty income to the
company on future sales of Imagination products. The board believes
that a fair value of the expected future royalty streams is
GBP1.5m. Consequently in the first half of 2015, the Company has
recognised an impairment of GBP3.0m against the carrying value of
the licensed IP. In the second half year the remaining licensed IP
will be de-recognised and the Company will recognise a contingent
receivable in respect of pending royalty income from
Imagination.
Marketing
Marketing-related intangible assets are defined as those assets
that are primarily used in the marketing or promotion of products
and services. The Frontier solutions are well known and preferred
by a majority of the consumer electronic brands who specifically
instruct their manufacturers to use Frontier modules and solutions
in their audio systems.
Customer relationships
Customer-related intangible assets may consist of customer
lists, order or production backlogs, customer contracts and
relationships, and non-contractual customer relationships. Frontier
has developed relationships with both consumer electronic brands
and manufacturers. The customer relationship valuation captures the
economic benefits of having these trading relationships.
7. Discontinued operations and non-current assets held for
sale
The amounts presented in the statement of profit or loss under
discontinued operations relate to the disposal of Sensium
Healthcare and its subsidiaries, together with the closure of
Frontier Microsystems. Sensium Healthcare was disposed of on 22
July 2016 and the decision to close Frontier Microsystems was taken
on the same day. As disclosed in note 5, included within the loss
from discontinued operations of GBP14,160,000 is a non-cash
impairment charge of GBP9,447,000 in respect of goodwill and
GBP4,713,000 being the loss recorded for the half year. Where costs
are expected to be incurred in the second half year in respect of
the discontinued businesses, a fair value estimate of that cost has
been included in determining the loss from discontinued operations
for the first half.
8. Trade and other receivables
Unaudited Unaudited Audited
30 June 30 June 31 December
2016 2015 2015
GBP'000 GBP'000 GBP'000
Trade receivables 4,909 2,992 4,061
Other debtors 2,057 807 1,341
Prepayments and accrued
income 336 997 940
Trade and other receivables 7,302 4,796 6,342
---------------------------- --------- --------- ------------
Trade and other receivables are usually due within 30 - 60 days
and do not bear any effective interest rate.
The fair value of these short term financial assets is not
individually determined as the carrying amount is a reasonable
approximation of fair value.
9. Cash and cash equivalents
As at 30 June 2016, cash and cash equivalents attributable to
the continuing business were GBP3.4 million, with a further GBP0.4
million disclosed on the Consolidated Statement of Financial
Position under "Assets included in disposal group classified as
held for sale".
10. Trade and other payables
Unaudited Unaudited Audited
30 June 30 June 31 December
2016 2015 2015
GBP'000 GBP'000 GBP'000
Trade payables 5,283 5,205 3,621
Other payables 490 468 1,459
Accruals and deferred income 3,039 3,461 4,996
Loan 1,163 - 1,163
Trade and other payables 9,975 9,134 11,239
----------------------------- --------- --------- ------------
The fair value of trade and other payables has not been
disclosed as, due to their short duration, management considers the
carrying amounts recognised in the balance sheet to be a reasonable
approximation of their fair value.
11. Share capital
Unaudited Audited
30 June Unaudited 31 December
2016 30 June 2015 2015
GBP GBP GBP
Authorised
4,000,000,000 ordinary shares of
0.25p 10,000,000 10,000,000 10,000,000
Allotted, issued and fully paid 1,709,830,865 1,702,925,947 1,704,779,379
GBP 4,274,577 4,257,315 4,261,948
------------------------------------- ------------- ------------- -------------
The movement in the number of shares
is as follows:
Number of
ordinary
shares
At 1 January 2015 1,677,866,400
Shares issued 25,059,547
At 30 June 2015 1,702,925,947
Shares issued 1,853,432
-------------
At 31 December 2015 1,704,779,379
Shares issued 5,051,486
At 30 June 2016 1,709,830,865
-------------
All shares are equally eligible to receive dividends and the
repayment of capital and represent equal votes at meetings of
shareholders with the exception of 98,462,243 shares held jointly
by the Employee Benefit Trust and participants for the purpose of
the Company's joint share ownership plan in relation to which all
voting rights have been waived.
Allotments
16 March 2016, 2,666,119 ordinary shares 0f 0.25p were issued in
relation to the exercise of share options by employees.
29 March 2016, 1,000,699 ordinary shares 0f 0.25p were issued in
relation to the exercise of share options by employees.
25 April 2016, 64,668 ordinary shares 0f 0.25p were issued in
relation to the exercise of share options by employees.
3 May 2016, 1,320,000 ordinary shares 0f 0.25p were issued in
relation to the exercise of share options by employees.
12. Post Balance Sheet Events
On 22 July 2016, the Group disposed of its healthcare
subsidiaries for a consideration of GBP1.3m plus an ongoing royalty
stream. In addition, also on 22 July 2016, the Group decided to
close Frontier Microsystems its subsidiary working on next
generation silicon for healthcare. Both the healthcare subsidiaries
and Frontier Microsystem have been treated as discontinued business
in the accounts for the six months to 30 June. As a result of these
decisions an impairment charge of GBP9.4m has been taken in the
profit and loss account.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR DQLFLQKFZBBX
(END) Dow Jones Newswires
September 27, 2016 02:00 ET (06:00 GMT)
Toumaz (LSE:TMZ)
Historical Stock Chart
From Nov 2024 to Dec 2024
Toumaz (LSE:TMZ)
Historical Stock Chart
From Dec 2023 to Dec 2024
