LONDON (Alliance News) - Wireless technology business Toumaz Ltd on Friday said it has sold its healthcare business, Sensium Healthcare, to Dutch group The Surgical Co.
Surgical Co has been Sensium's distribution partner in France, Germany and Benelux for the past three years. It is buying Sensium for an initial GBP1 million on completion, followed by a further GBP300,000 on December 31.
Toumaz also will receive royalties of 3% of net revenue for five years, followed by royalties of 2% for the five years after that. If Surgical Co sells the business within the next four years, Toumaz will receive 19% of the net proceeds.
Sensium suffered an earnings before interest, tax, depreciation and amortisation loss of GBP3.9 million in the first half of 2016, with no revenue. Following its disposal, Toumaz will focus on its digital audio division, Frontier Silicon.
Toumaz added that group revenue in the first half was marginally lower than the prior year at GBP13.7 million from GBP14.0 million, which it attributed to a decline in healthcare revenue.
Group Ebitda improved to a loss of GBP3.6 million from a loss of GBP5.5 million, which Toumaz said was due to a reduction in research & development expenditure to GBP4.8 million from GBP6.3 million.
Digital radio revenue increased to GBP9.3 million from GBP8.7 million, as volume increased driven by international expansion of DAB digital radio. Smart radio revenue, however, fell to GBP4.4 million from GBP5.1 million, which Toumaz said reflected a transition in the business to the group's next generation solution, which incorporates Google Cast for audio technology.
Toumaz said it has seen strong customer interest in Google Cast, particularly in the US, with the first consumer products incorporating the technology expected to be available in the fourth quarter of 2016. Sales are expected to gain "significant momentum" in 2017.
Toumaz will release its first-half results in the second half of September.
"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," Chief Executive Anthony Sethill said in a statement.
"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," he added.
Shares in Toumaz were trading flat at 1.75 pence on Friday morning.
By Karolina Kaminska; karolinakaminska@alliancenews.com @KarolinaAllNews
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