REG - CAP-XX Limited - Interim Results

CAP XXAnnouncement

06/03/2018 07:05

RNS Number : 7661G
CAP-XX Limited
06 March 2018
Dissemination of a Regulatory Announcement that contains inside information according to REGULATION (EU) No 596/2014 (MAR).
6 March 2018
CAP-XX Limited
("CAP-XX" or the "Company")
Interim Results for the half-year ended 31 December 2017
CAP-XX Limited, a world leader in the design and manufacture of thin, flat supercapacitors and energy management systems, is pleased to announce its interim results for the half-year ended 31 December 2017.
Key highlights
 Product Sales revenue of A$1.5 million (2016: A$1.3 million) up 9%
 Royalty revenue of A$0.42 million (2016: A$0.29 million) up 43% against the corresponding prior year period. Year on year, Murata royalty was up over 145% due to increased volumes across the product range
 Improved EBITDA loss of A$1.7 million (2016: loss A$1.9 million)
 Licencing negotiations continue with numerous parties. While there have been delays in finalizing these agreements, the Board remains optimistic that the most advanced of these will be concluded in the next six months
 Sales pipeline for prismatic supercapacitors, including cylindrical cans remains at high levels. First large volume cylindrical can order was shipped late in the reporting period
 Several automotive projects advancing and licensing negotiations continuing
 Acquired additional manufacturing equipment to increase production capacity and continued to reduce costs. Commissioning to be completed before the end of the current calendar year
 A small increase in overhead expenses associated with licencing negotiations and the increase in production capacity and cost reduction programme
 Cash reserves at the end of December 2017 were A$1.5 million (2016: A$0.6 million). The cash reserves at the end of December 2017 exclude the R&D Tax rebate of A$1.6 million which was received in early February 2018
Anthony Kongats, CEO of CAP-XX said:
"The current financial year has been another big step up for CAP-XX. The first half saw us win our first high volume order for Thinline, which will enter mass production in the current half, and completion of products for global automotive companies. We have progressed a number of licensing negotiations to an advanced stage and secured record royalty revenues from our current licences."
Electronic copies of CAP-XX's interim results for the half-year ended 31 December 2017 will shortly be available from the Company's website: www.cap-xx.com.
For further information contact:
CAP-XX Limited
Anthony Kongats (Chief Executive Officer) +61 (0) 2 9428 0139
Kreab (Financial PR)
Robert Speed +44 (0) 20 7074 1800
Allenby Capital (Nominated Adviser and Broker
David Hart / Alex Brearley +44 (0) 20 3328 5656
More information is available at www.cap-xx.com
Notes to Editors:
CAP-XX (LSE: CPX) is a world leader in the design and manufacture of thin, flat supercapacitors and energy management systems used in portable and small-scale electronic devices, and to an increasing extent, in larger applications such as automotive and renewable energy. The unique feature of CAP-XX supercapacitors is their very high power density and high energy storage capacity in a space-efficient prismatic package.These attributes are essential in power-hungry consumer and industrial electronics, and deliver similar benefits in automotive and other transportation applications. For more information about CAP-XX, visit www.cap-xx.com
Chairman's statement
The last six months performance has shown steady progress on the delivery of the Company's long-term strategy. We have announced a large volume Thinline design win, the successful rollout of the cylindrical can product range, improved the size and breadth of the current sales pipeline and deployed additional manufacturing initiatives to increase capacity and reduce costs. Revenues from product sales and royalties continue to increase with contributions from both AVX and Murata. The Board remains confident that some of the licensing opportunities currently under negotiation will come to fruition, notwithstanding the recent delays encountered.
Total sales revenue for the six months to 31 December 2017 was A$1.5 million (2016: A$1.3 million). Product sales were up on the previous year by 9% with volumes and pricing up 3% and 9% respectively whilst the stronger Australian dollar had a negative effect of 3% on US$ denominated product revenue. Pleasingly, royalty receipts continue to grow on a year to year basis principally due to Murata which is up 145% from the previous year. AVX has advised that year on year revenue on products utilising technology licensed from CAP-XX has increased fourfold, albeit from a low base.
Operating expenditure continues to be tightly controlled, with the only increases being in the product and business development areas, including licencing activities. The previously announced investments in operations, resources and plant and equipment are beginning to pay dividends with most of the key initiatives having been deployed and now delivering positive outcomes. The Company has also recently acquired, at minimal cost, certain idle manufacturing assets that were located at a former contract manufacturer's site in Malaysia. These assets are being transferred to our current contract manufacturer's site and will be in operation in the second half of the current calendar year. The deployment of these assets and the acquisition of additional capacity will be critical to meet the expected increase in demand in the short to medium term.
The operating result for the six-month operating period ended 31 December 2017 was an EBITDA loss of A$1.7 million (2016: EBITDA loss of A$1.9 million). Cash reserves as at the end of December 2017 were A$1.5 million which was up from A$0.6 million as at in 31 December 2016. The Federal Government R&D tax rebate which was anticipated to be received in October 2017, as in past years, was delayed due to a desk top review conducted by the Australian Taxation Office. On the successful completion of the review, the rebate totalling A$1.6 million was received in early February 2018. These funds have not been included in the cash reserves position as at December 2017. The Board remains confident that the Company's short to medium cash requirements will be satisfied by the current cash reserves in addition to the expected increase in revenue receipts (from product sales, licensing and royalty receipts) and improving margins.
Interest in CAP-XX's small form factor product range remains high, notably for applications relating to the internet of things (IOT). In August 2017, the Company announced its first high-volume design win in the wearable market and it is anticipated that mass production revenue will commence to be recognised in the second half of the current financial year. The Company has several large volume opportunities in the sales pipeline which are being pursued with the expectation that design wins and revenue should be forthcoming before the end of the current calendar year. Some opportunities that were initially expected to be finalised in the current financial year may slip into the first half of the 2019 financial year due to a customer delaying its mass production start date. Importantly the opportunities being pursued are not concentrated on a single target market nor customer but are across several of the Company's key target markets which reinforces the CAP-XX product's widespread appeal. These opportunities span the wearable, health, building management, automotive, security, metering and energy harvesting market segments.
Within the last twelve months, the Company released cylindrical cells and the end customer and distributor feedback has been positive. Several significant high-volume opportunities for these cylindrical products are being evaluated and material shipments commenced during the last three months.
Despite the time delays associated with finalising the previously announced licensing opportunities, the Board is optimistic that several of the licensing opportunities currently under negotiation will be finalised in the short to medium term. The finalisation and realisation of licensing opportunities remains a key priority for CAP-XX's management. The Board remains confident that the most advanced of the Company's negotiations will conclude during the current half year although the final timing of these outcomes is driven by commercial considerations. However, the Company has extensive experience in negotiation with multinational corporations and recognises that the closing stages of negotiations can be protracted.
The Automotive market strategy remains to partner with an automotive Tier-1 or Tier-2 manufacturer for customer interface, production and sales. CAP-XX has achieved sales of small supercapacitors to two leading German car makers, one directly and one via a distributor and the Company is in advanced negotiations with a North American Tier-1 component supplier to address the market for both large and small supercapacitor devices.
The Company has been improving and refining its automotive offering over the last six months, and the time delays associated with product evaluation and module testing has allowed the Company to pursue other market segments interested in the Company's large supercapacitor product offering. Extensive discussions with the Australian Defence Department and several prime military contractors have introduced opportunities which are of interest to the Company. Discussions regarding these have proven fruitful and the parties are keen to move the process forward.
The Board is pleased with the Company's progress over the last six months. The short-term outlook is also pleasing with key customer meetings in Europe this month to add further clarity on the outlook for the second half and beyond. The Board remains confident that the Company is on track to deliver on its long-term strategy.
Patrick Elliott
Chairman
CAP-XX Limited
Consolidated statement of profit or loss
For the half-year ended 31 December 2017
Consolidated
Half-year 2017
Half-year 2016
Currency: Australian Dollars
$
$
Revenue from sale of goods and services
1,544,554
1,347,226
Cost of sale of goods and services
(1,123,455)
(1,121,004)
Gross margin (loss) on sale of goods and services
421,099
226,222
Other revenue
24,446
1,849
Other income
720,000
735,399
General and administrative expenses
(1,077,551)
(1,179,252)
Process and engineering expenses
(569,997)
(446,548)
Selling and marketing expenses
(358,159)
(345,207)
Research and development expenses
(781,754)
(794,698)
Other expenses
(67,994)
(129,776)
(Loss) before income tax
(1,689,910)
(1,932,011)
Income tax benefit/(expense)
-
-
Net loss after income tax for the half year
(1,689,910)
(1,932,011)
(Loss) attributable to members of CAP-XX Limited
(1,689,910)
(1,932,011)
Loss per share attributable to the ordinary equity holders of the company
Cents
Cents
Basic loss per share
(0.57)
(0.72)
Diluted loss per share
(0.57)
(0.72)
CAP-XX Limited
Consolidated statement of comprehensive income
For the half year ended 31 December 2017
Consolidated
2017
2016
Currency: Australian Dollars
$
$
Loss for the half year
(1,689,910)
(1,932,011)
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Exchange differences on translation of foreign operations
2,411
(22,323)
Other comprehensive loss for the half year, net of tax
 2,411
 (22,323)
Total comprehensive loss for the half year attributable to owners of CAP-XX Limited
 (1,687,499)
 (1,954,334)
CAP-XX Limited
Consolidated statement of financial position
As at 31 December 2017
Consolidated
31 December 2017
30 June 2017
31 December 2016
Currency: Australian Dollars
$
$
$
ASSETS
Current assets
Cash and cash equivalents
1,514,463
3,881,792
636,528
Receivables
264,839
419,146
280,245
Inventories
1,601,915
1,321,327
1,115,347
Other
2,430,706
1,676,618
835,850
Total current assets
5,811,923
7,298,883
2,867,970
Non-current assets
Property, plant and equipment
420,745
369,779
359,837
Other
236,507
236,507
236,507
Total non-current assets
657,252
606,286
596,344
TOTAL ASSETS
6,469,175
7,905,169
3,464,314
LIABILITIES
Current liabilities
Payables
1,047,310
1,013,954
620,159
Provisions
708,167
682,962
668,056
Total current liabilities
1,755,477
1,696,916
1,288,215
Non-current liabilities
Provisions
86,240
91,756
82,652
Total non-current liabilities
86,240
91,756
82,652
TOTAL LIABILITIES
1,841,717
1,788,672
1,370,867
NET ASSETS
4,627,458
6,116,497
2,093,447
EQUITY
Contributed equity
98,389,390
98,343,719
94,603,260
Reserves
4,480,173
4,324,973
4,310,144
Accumulated losses
(98,242,105)
(96,552,195)
(96,819,957)
TOTAL EQUITY
4,627,458
6,116,497
2,093,447
CAP-XX Limited
Consolidated statements of changes in equity
For the half-year ended 31 December 2017
Consolidated
Contributed
Equity
$
Reserve
$
Accumulated losses
$
Total
$
Balance at 1 July 2016
94,558,726
4,035,574
(94,887,946)
3,706,354
Loss for the period as reported in the 2016 interim financial statements
-
 (1,932,011)
(1,932,011)
Other comprehensive loss
-
 (22,323)
 -
(22,323)
Transactions with owners in their capacity as owners:
Contributions of equity, net of transaction costs and tax
44,534
44,534
Employee share options  value of employee services
-
296,893
-
296,893
Balance at 31 December 2016
94,603,260
4,310,144
(96,819,957)
2,093,447
Profit for the period as reported in the 2017 financial statements
-
 -
 267,762
267,762
Other comprehensive income
-
 28,874
 -
28,874
Transactions with owners in their capacity as owners:
Contributions of equity, net of transaction costs and tax
3,740,459
-
-
3,740,459
Employee share options  value of employee services
-
(14,045)
-
(14,045)
Balance at 30 June 2017
98,343,719
4,324,973
(96,552,195)
6,116,497
Profit for the period as reported in the 2017 interim financial statements
-
 -
 (1,689,910)
(1,689,910)
Other comprehensive income
-
 2,411
 -
2,411
Transactions with owners in their capacity as owners:
Contributions of equity, net of transaction costs and tax
 45,671
-
-
45,671
Employee share options  value of employee services
-
152,789
-
152,789
Balance at 31 December 2017
98,389,390
4,480,173
(98,242,105)
4,627,458
CAP-XX Limited
Consolidated Statement of Cash Flows
For the half-year ended 31 December 2017
Consolidated
Half-year
2017
Half-year
2016
Currency: Australian Dollars
$
$
Cash flows from operating activities
Receipts from customers (inclusive of goods and services tax)
1,853,316
3,371,096
Payments to suppliers and employees (inclusive of goods and services tax)
(4,163,655)
(3,553,937)
(2,310,339)
(182,841)
Tax credit received
-
1,542,925
Interest received
24,446
1,849
Net cash (outflow) from operating activities
(2,285,893)
1,361,933
Cash flows from investing activities
Payments for property, plant and equipment
(129,518)
(79,247)
Net cash (outflow) from investing activities
(129,518)
(79,247)
Cash flows from financing activities
Proceeds from issue of shares
45,671
44,534
Proceeds from Loans
-
(1,000,000)
Net cash inflow from financing activities
45,671
(955,466)
Net (decrease) in cash and cash equivalents
(2,369,740)
(327,220
Cash and cash equivalents at the beginning of the half-year
3,881,792
331,631
Effects of exchange rate changes on cash and cash equivalents
2,411
(22,323)
Cash and cash equivalents at the end of the half-year
1,514,463
636,528
This general purpose interim financial report, for the half-year reporting period ended 31 December 2017, has been prepared in accordance with Australian equivalents to International Financial Reporting Standards (AIFRSs), other authoritative pronouncements of the Australian Accounting Standards Board, Urgent Issues Group Interpretations and the Corporations Act 2001. This general purpose interim financial report, for the half-year reporting period ended 31 December 2017, is (with the exception of the figures for 30 June 2017 in the Balance Sheet) unaudited.

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