Financial highlights
Revenues up 30% at £14.0m (H1 2014: £10.8m)
Gross profit up 40% to £6.3m (H1 2014: £4.5m)
EBITDA loss at £5.5m (H1 2014: loss £5.6m)
R&D expenditure: £6.2m (H1 2014: £5.1m)
As at 30 June 2015, the cash balance was £5.5m
Frontier Silicon - Digital Audio
Digital Audio revenues increased by 34% to £13.8m (H1 2014: £10.3m), since April, the business has been EBITDA positive. The Board expects a strong performance in the second half of 2015, with record shipments in August.
The Group has a leading global position in the DAB market and gross margins which reflect this. The connected audio business is growing rapidly from a small base, driven in particular by global demand for streaming services, such as Spotify and Apple Music.
The prospects for 2016 are good. In June Toumaz signed an agreement to include Google Cast technology in its next generation connected audio solution, due to ship in mid-2016.
This business unit is expected to be cash generative and EBITDA positive in 2016.
Sensium Healthcare - Patient Monitoring
The Group now has a system that demonstrably works having resolved all the technical issues from its initial trials in 2014. This enhanced version of SensiumVitals® is now deployed into NHS hospitals as well as internationally. Although the system is well received as an improvement in patient care, it is taking longer than expected for the economic case to be made conclusively, i.e. that the costs of installing the system and its operation are outweighed by the benefits of earlier intervention in the treatment of deteriorating patient health.
The Board is now conducting a detailed review of the business model adopted to date, using internal resources and external advisers. This will establish in the near future the optimum way for Toumaz to secure value from the intellectual property behind the SensiumVitals® system.
Financing
At the end of June 2015, the Group had £5.5m in cash. Cash burn is seasonally significantly higher in the first half of the year than the second half. The Board has implemented an overhead reduction plan and R&D spend has peaked.
The Group expects to be able to fund its operations to the point of cash generation, without recourse to a further equity raise as a result of the review into the Sensium Healthcare business, the continued good performance in Digital Audio and the prospective availability of a modest debt facility.
Anthony Sethill, CEO of Toumaz, commented:
"Our Digital Audio business - Frontier Silicon - is performing well. The development of the Sensium Healthcare business is slower than envisaged.
"Accordingly, the Board is reviewing its options to best exploit the SensiumVitals® system and its IP.
"We expect to be cash generative from the middle of 2016. We are fully focussed on optimising shareholder value."
