Science Group PLC Frontier, acquisition and group update (6241T)
26 Noviembre 2021 - 1:00AM
UK Regulatory
TIDMSAG
RNS Number : 6241T
Science Group PLC
26 November 2021
26 November 2021
Science Group plc
Frontier Update, Acquisition
and
Group Trading Update
Frontier Smart Technologies ("Frontier") was acquired by Science
Group in 2019. Following a successful turnaround and integration,
Frontier is now a very profitable business, contributing to the
Group at a similar level to the Group's Services operations. As a
result, and subsequent to a review of the Frontier strategy early
in the year, Science Group has been investing in the Frontier
business during 2021.
The recent UK Digital Radio and Audio Review reaffirmed that
radio continues to be a strong trusted medium delivering
significant public value and highlighted the success of DAB. This
UK experience is believed by Frontier to be replicated in other
geographic markets. However like all technology markets, the
product category is evolving and one of the growth opportunities
identified in the strategy review undertaken in early 2021 was to
develop the SmartRadio segment. SmartRadio combines DAB/DAB+, FM
and Internet Radio providing access to tens of thousands of radio
stations worldwide. In addition, the product category is also
attracting diverse demographics as (i) audio streaming services
such as Spotify, Deezer and Amazon Music become mainstream, and
(ii) significant growth is now being seen in "spoken word"
services, such as podcasts and audiobooks.
In progressing the Frontier strategy, the Board has now
completed the acquisition of Magic Systech Inc ("Magic"), a
Taiwan-based company which specialises in Internet Radio
technology. The acquisition enhances the Frontier proposition
including a lower production cost technology architecture. For the
year ended 31 December 2020, unaudited results for Magic reported
revenue of US$2 million and a profit before tax of US$0.4 million.
Magic will be integrated into Frontier but the Magic Systech brand
will be retained. Consideration for the acquisition was US$4
million, paid in cash, although at completion Magic held cash of
$1.9 million, giving a net valuation of $2.1 million for the
business. The acquisition of Magic is the second significant
investment in Frontier resulting from the 2021 strategy review,
following on from the $6 million technology royalty buyout in
July.
Trading Update
While the Frontier acquisition has been highly successful and
has made a significant contribution to Science Group, trading in
all divisions continues positively. As a result, the Group remains
in line or slightly ahead of the upgraded guidance provided on 11
October 2021. In summary, the Board of Science Group anticipate
reporting another strong operating performance for 2021.
Following the Science Group strategic investment in TP Group in
August and the subsequent restructuring of that Board, the new
strategy for TP Group was announced on 1 November 2021. As reported
by TP Group, this strategy focuses on the UK-based Defence and
Aerospace operations which contribute approximately 70% of TP Group
revenue and a greater proportion of the profit contribution. The
relationship between Science Group and TP Group has developed
constructively in recent weeks and the Science Group Board remains
positive in relation to the long term merits of the investment.
End
Science Group plc
Tel: +44 (0) 1223 875
Martyn Ratcliffe, Chairman 200
Stifel Nicolaus Europe Limited (Nominated
Adviser and Joint Broker)
Tel: +44 (0) 20 7710
Nick Adams, Alex Price 7600
Liberum Capital Limited (Joint Broker)
Tel: +44 (0) 20 3100
Neil Patel, Cameron Duncan 2000
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