REG - CAP-XX Limited - Interim Results

CAP XXAnnouncement

06/03/2019 07:05

RNS Number : 9954R
CAP-XX Limited
06 March 2019
 


 
Dissemination of a Regulatory Announcement that contains inside information according to REGULATION (EU) No 596/2014 (MAR).
 
 
 
6 March 2019
 
 
CAP-XX Limited
("CAP-XX" or the "Company")
 
Interim Results for the half-year ended 31 December 2018
 
 
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 2018.
 
Key highlights
 
·      Total Sales Revenue of A$1.6 million (2017: A$1.5million) up 4%
·      Increased like for like gross margin of 54.1% (2017: 49.1%) due to realisation of the Company's previously announced manufacturing initiatives*
·      Continuing improvement in EBITDA performance.  EBITDA loss reduced to A$1.0 million (2017: loss A$1.4 million)**
·      TDK licence arrangement completed in October 2018. Ongoing licencing negotiations with numerous other international parties are at varying stages
·      Sales pipeline for prismatic and cylindrical can supercapacitors are at historically high levels. The Company is reviewing options for additional production capacity. In the short term, due to worldwide economic uncertainties, the timing of when certain significant pipeline projects may move to the mass production stage remains unclear
·      Product development initiatives remain on track, particularly for the 3 Volt product
·      5% reduction in year on year overhead expenses of A$2.8 million (2017: A$3.0 million), excluding share based payments expense
·      Cash reserves as at 31 December 2018 were A$4.6 million (2017: A$1.5 million) which includes the proceeds of the equity subscription in November 2018 (£1.75 million) and the R&D Tax Rebate of A$1.6 million
* Current period Gross Margin result and prior period comparative Gross Margin results have been adjusted to reflect changes in the accounting policy for Gross Margin as set out in Note 2.
** EBITDA excludes amortisation of employee share options.
 
Anthony Kongats, CEO of CAP-XX said:
"Significant milestones for CAP-XX were delivered over the six months to 31 December 2018. The benefits from previously highlighted manufacturing initiatives are being realised, with a significant improvement in reported gross margins. The ongoing growth in the pipeline of major new sales projects has given the Board the confidence to start examining options for expanding production capacity. The TDK licence agreement has been signed and good progress has been made towards the completion of several other licence arrangements. Development of future product releases, especially the 3V product, remains on schedule."
 
Electronic copies of CAP-XX's interim results for the half-year ended 31 December 2018 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 Company's performance for the six months ended 31 December 2018 has delivered some material steps towards the achievement of the organisation's short to medium-term goals. The six months ended 31 December 2018 can be characterised by: gross margin improvement due to the full realisation of process and production initiatives that have been highlighted in previous reports (and notwithstanding the changes in accounting policies described below); royalties from the TDK licence arrangement beginning to be received; and healthy cash reserves due to the proceeds from an equity subscription and the R&D Tax rebate being received. Additionally, the historically high sales pipeline augurs well for long-term sales growth prospects.
 
In order to represent more accurately the Gross Margin being delivered by the sale of CAP-XX's goods and services,  adjustments have been made in the statements of profit or loss and financial position to transfer the impact of both expenditure on eligible research and development activities and work in progress production from the cost of sale of goods and services to operating expenditure and work in progress inventory respectively. This adjustment has been made in both the current period and the comparative period presented below, to ensure that a like for like comparison remains in place. Further details regarding this adjustment can be found in Note 2 below. 
 
The sales pipeline for both prismatic and the recently released cylindrical can supercapacitors are at historically high levels and covers several key market segments, including Automotive, Healthcare, Industrial and Tracking. These opportunities are at various stages of the sales process, but provide the Board and management with confidence in CAP-XX's medium to longer-term sales revenue prospects. To this end, the Board has asked the Company to look at options to increase its manufacturing capacity, including both internal and external manufacturing process options.
 
In the short-term, the degree of current worldwide economic uncertainty may result in some delays as to when certain of the identified projects within the pipeline may proceed to mass production. Projects are not being cancelled, but are at risk of slippage in terms of the timing of when initial orders were expected to be received. This is a common finding when negotiating with third-parties in the electronic components industry. It is too early to determine the effect that any such timing slippage may have on the results for the second half of the current financial year. 
 
Total revenue for the six months to 31 December 2018 was A$1.6 million (2017: A$1.5 million). Product sales were up on the previous year by 5%. Royalty and licencing revenue were flat when compared to the previous year.
 
For the six-month operating period ended 31 December 2018, the EBITDA loss of A$1.0 million (2017: EBITDA loss of A$1.4 million), which excludes the amortisation of the share based payment expense, improved A$0.4 million or 32% from the previous year. Cash reserves as at 31 December 2018 were A$4.6 million (2017: A$1.5 million), benefiting from the proceeds of the equity subscription in November 2018 (£1.75 million) as well as the receipt of A$1.6 million (2017: A$1.6 million) from a R&D Tax Rebate in the same month.  
 
The Board was pleased to finalise the TDK licencing arrangements in October 2018 and the initial payments from this agreement have been received over the last six months. There are still several other material licensing agreements being negotiated with several worldwide potential licencees, although given that these licencing discussions are all at differing stages of completion, the Board is reluctant to state publicly when they are likely to be completed.  However, it should be stressed that the successful completion of licencing negotiations remains a key short-term objective for the CAP-XX management team.  The CAP-XX research and development team are on track for the delivery of their product development road map, with no major obstacles being encountered. This is especially the case for the development of the 3V product which remains on track for release later in 2019.
 
The Board remains confident that the Company is starting to make material progress towards the achievement of its long-term goal of achieving a cash break-even position as soon as possible.
 
In terms of the outcome for the full year ending 30 June 2019, although the Company's long-term sales pipeline is healthy, CAP-XX's immediate concern is the short term sales revenue position, and the Board intends to provide a trading update in respect of the second half of the 2019 financial year before the end of April 2019, once all relevant customer visits are completed and their short term order positions are better understood.
 
 
Patrick Elliott
Chairman
 
 




  
 
 
CAP-XX Limited
Consolidated statement of profit or loss
For the half-year ended 31 December 2018




 


 


Consolidated


 




 


 


Half-year 2018


Half-year 2017




 


 


 


 




Currency: Australian Dollars


 


$


$




 


 


 


 




Revenue from sale of goods and services


 


1,603,484


1,544,554




Cost of sale of goods and services


 


(735,147)


(787,318)




Gross margin (loss) on sale of goods and services


 


868,337


757,236




 


 


 


 




Other revenue


 


9,519


24,446




Other income


 


884,211


720,000




 


 


 


 




General and administrative expenses


 


(1,067,995)


(924,762)




Process and engineering expenses


 


(552,131)


(839,603)




Selling and marketing expenses


 


(339,220)


(358,159)




Research and development expenses
Share based payments


 


(809,812)
(567,813)


(781,754)
(152,789)




Other expenses


 


(41,468)


(67,994)




(Loss) before income tax


 


(1,616,372)


(1,623,379)




 


 


 


 




Income tax benefit/(expense)


 


-


-




Net loss after income tax for the half year


 


(1,616,372)


(1,623,379)




 


 


 


 




(Loss) attributable to members of CAP-XX Limited


 


(1,616,372)


(1,623,379)




 


 


 


 




Loss per share attributable to the ordinary equity holders of the company


 


Cents


Cents




Basic loss per share


 


(0.52)


(0.54)




Diluted loss per share


 


(0.52)


(0.54)



 
 
 
 
 



 
 
 
 
CAP-XX Limited
Consolidated statement of comprehensive income
For the half year ended 31 December 2018
 
 




 


Consolidated


 




 


 


 


 


 




 


 


2018


2017


 




Currency: Australian Dollars


 


$


$


 




Loss for the half year


 


(1,616,372)


(1,623,379)


 




Other comprehensive income


 


 


 


 




Items that may be reclassified subsequently to profit or loss
 
 


 


 


 


 




Exchange differences on translation of foreign operations


 


(38,496)


2,411


 




Other comprehensive loss for the half year, net of tax


 


            (38,496)


                2,411


 




Total comprehensive loss for the half year attributable to owners of CAP-XX Limited


 


      (1,654,868)


      (1,620,968)


 




 




 
 
 
CAP-XX Limited
Consolidated statement of financial position
As at 31 December 2018




 


 


 


 


     Consolidated




 


 


 


31 December 2018


30 June 2018


31 December 2017


 




 


 


 


 


 


 


 




Currency: Australian Dollars


 


 


$


$


$


 




 


 


 


 


 


 


 




ASSETS


 


 


 


 


 


 




Current assets


 


 


 


 


 


 




Cash and cash equivalents


 


 


4,623,238


1,911,346


1,514,463


 




Receivables


 


 


327,296


823,090


264,839


 




Inventories


 


 


1,814,766


1,404,205


1,668,446


 




Other


Note 1


 


921,106


1,784,384


2,430,706


 




Total current assets


 


 


7,686,406


5,923,025


5,878,454


 




 


 


 


 


 


 


 




Non-current assets


 


 


 


 


 


 




Property, plant and equipment


 


 


590,138


572,949


420,745


 




Other


 


 


236,507


236,507


236,507


 




Total non-current assets


 


 


826,645


809,456


657,252


 




 


 


 


 


 


 


 




TOTAL ASSETS


 


 


8,513,051


6,732,481


6,535,706


 




 


 


 


 


 


 


 




LIABILITIES


 


 


 


 


 


 




Current liabilities


 


 


 


 


 


 




Payables


 


 


835,112


1,144,289


1,047,310


 




Provisions


 


 


734,425


760,491


708,167


 




Total current liabilities


 


 


1,569,537


1,904,780


1,755,477


 




 


 


 


 


 


 


 




Non-current liabilities


 


 


 


 


 


 




Provisions


 


 


125,018


41,296


86,240


 




Total non-current liabilities


 


 


125,018


41,296


86,240


 




 


 


 


 


 


 


 




TOTAL LIABILITIES


 


 


1,694,555


1,946,076


1,841,717


 




 


 


 


 


 


 


 




NET ASSETS


 


 


7,001,795


4,786,405


4,693,989


 




 


 


 


 


 


 


 




 


 


 


 


 


 


 




EQUITY


 


 


 


 


 


 




Contributed equity


 


 


101,867,507


98,565,062


98,389,390


 




Reserves


 


 


5,741,487


5,212,170


4,480,173


 




Accumulated losses


 


 


(100,607,199)


(98,990,827)


(98,175,574)


 




TOTAL EQUITY


 


 


7,001,795


4,786,405


4,693,989


 




 
 
 
 
 
CAP-XX Limited
Consolidated statements of changes in equity
For the half-year ended 31 December 2018




 


Consolidated




 


 




 


 


Contributed
Equity
$


Reserve
$


Accumulated losses
$


Total
$




 


 


 


 


 


 




Balance at 1 July 2017


 


98,343,719


4,324,973


(96,552,195)


6,116,497




Loss for the period as reported in the 2016 financial statements


 


- 


              


   (2,438,632)


(2,438,632)




 
Other comprehensive loss 


 


- 


               (33,031)


   -


 
(33,031)




Transactions with owners in their capacity as owners:


 


 


 


 


 




Contributions of equity, net of transaction costs and  tax


 


221,343


 


 


221,343




Employee share options ‑ value of employee services


 
 


-


920,228


-


920,228




 


 


 


 


 


 




Balance at 30 June 2018


 


98,565,062


5,212,170


 (98,990,827)


 4,786,405




 
Profit for the period as reported in the 2017 interim financial statements


 


- 


               -


   (1,616,372)


(1,616,372)




Other comprehensive income 


 


- 


               (38,496)


   -


 
(38,496)




Transactions with owners in their capacity as owners:


 


 


 


 


 




Contributions of equity, net of transaction costs and tax


 


 3,302,445


 - 


 - 


3,302,445




Employee share options ‑ value of employee services


 


-


567,813


-


567,813




 


 


 


 


 


 




Balance at 31 December 2018


 


101,867,507


5,741,487


 (100,607,199)


7,001,795




 


 


 


 


 


 




 


 


 


 


 




 
           



CAP-XX Limited
Consolidated Statement of Cash Flows
For the half-year ended 31 December 2018




 


 


Consolidated




 


 


Half-year        2018


Half-year
2017




 


 


 


 




Currency: Australian Dollars


 


$


$




 


 


 


 




Cash flows from operating activities


 


 


 




Receipts from customers (inclusive of goods and services tax)


 


2,259,627


1,853,316




Payments to suppliers and employees (inclusive of goods and services tax)


 


(4,303,597)


(4,163,655)




 


 


(2,043,970)


(2,310,339)




Tax credit received


 


1,596,547


-




Interest received


 


9,519


24,446




Net cash (outflow) from operating activities


 


(437,904)


(2,285,893)




 


 


 


 




Cash flows from investing activities


 


 


 




Payments for property, plant and equipment


 


(114,153)


(129,518)




Net cash (outflow) from investing activities


 


(114,153)


(129,518)




 


 


 


 




Cash flows from financing activities


 


 


 




Proceeds from issue of shares


 


3,302,445


45,671




Net cash inflow from financing activities


 


3,302,445


45,671




 


 


 


 




Net (decrease) in cash and cash equivalents


 


2,750,388


(2,369,740)




Cash and cash equivalents at the beginning of the half-year


 


1,911,346


3,881,792




Effects of exchange rate changes on cash and cash equivalents


 


(38,496)


2,411




Cash and cash equivalents at the end of the half-year


 
 


4,623,238


1,514,463




 


 


 


 




 
 
 
 
This general purpose interim financial report, for the half-year reporting period ended 31 December 2018, 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 2018, is unaudited.
 
 
 
Note 1 - Other Assets
Currency: Australian Dollars
                     Consolidated
                                                                                                                                2018                                            2017
          $                                              $
 
R&D Rebate - Australian Tax Office (FY17)                                                                -                                       1,551,489
R&D Rebate - Australian Tax Office (FY18)                                                      751,000                                        720,000
Royalty Payments - Accrual                                                                                80,320                                           90,000
Prepayments                                                                                                       78,959                                           58,390
Other                                                                                                                   10,827                                           10,827
                                                                                                          
Total Other Assets                                                                                          921,106                                      2,430,706
 
 
 
 
Note 2    Restatement of comparatives
 
In order to reflect accurately the delivered gross margin, an adjustment has been made to the value of cost of goods and services. This adjustment is necessary to value the expenditure associated with the cost of sale of goods and services in order to accurately record the Gross Margin generated from the sale of CAP-XX's goods and services. Having revisited the gross margin calculation, it has been found that the value of cost of goods and services has been overstated, which has principally included materials, inventory being understated and process and engineering expenses being understated. This is due to the adjustments required in the valuation of work in progress inventory and the reclassification of feedstock expenditure associated with eligible research and development expenditure. This error has been corrected and is reflected in the relevant balances recorded at 31 December 2018 and for the comparative period.
 
 
Extracts, being only those line items affected, are disclosed below:
 
Consolidated Statement of profit or loss of the earlier comparative period - 30 June 2018




Currency: Australian Dollars


 


Consolidated




 


 


2018


 


 


 


2018




Extract


 


Original basis of calculation


 


Adjustment


 


Restated




 


 


$


 


       $


 


  $




Expenses


 


 


 


 


 


 




Cost of sale of goods and services


 


(2,704,077)


 


738,155


 


         (1,965,922)




Process and engineering expenses


 


(1,213,190)


 


 (554,856)


 


    (1,768,046)




 
 
Loss before income tax


 
       


(2,621,931)


 


183,299


 


(2,438,632)




 


 


 


 


 


 


 




Income tax benefit


 


-


 


-


 


-




 


 


 


 


 


 


 




 
Net loss for the period


 


(2,621,931)


 


183,299


 


(2,438,632)




 


 


 


 


 


 


 




 


 


 


 


 


 


 




Loss attributable to the owners of CAP-XX Limited


 


(2,621,931)


 


183,299


 


(2,438,632)




 


 


 


 


 


 


 




 
 
Consolidated Statement of comprehensive income




 


 


Consolidated




Currency: Australian Dollars


 


2018


 


 


 


2018




Extract


 


Original basis of calculation


 


Adjustment


 


Restated




 


 


$


 


       $


 


 $




Loss for the period


 


 
(2,621,931)


 


183,299


 


(2,438,632)




 


 


 


 


 


 


 




 


 


 


 


 


 


 




Total comprehensive income for the period attributable to owners of CAP-XX Limited


 


(2,621,931)


 


183,299


 


(2,438,632)




 


 


 


 


 


 


 




 
  
Consolidated Statement of financial position at the beginning of the earlier comparative period - 30 June 2018       
 




 


Consolidated




Extract


   31/12/2018
    Original basis of calculation


Adjustment


31/12/2017
Restated




Current assets


$


        $


   $
 




Inventories


1,220,906


183,299


1,404,205




Total current assets


5,739,726


183,299


5,923,025




 

 
 
 



TOTAL ASSETS
 


6,549,182


183,299


6,732,481




 

 
 
 



Net assets


4,603,106


183,299


4,786,405




 


 


 


 




Equity


 


 


 




Accumulated losses


(99,174,126)


183,299


 
(98,990,827)
 




 
TOTAL EQUITY


 
4,603,106


 
183,299


 
 4,786,405




 
 
 
Extracts, being only those line items affected, are disclosed below:
Consolidated Statement of profit or loss of the earliest comparative period - 31 December 2017
 
Consolidated Statement of profit or loss




Currency: Australian Dollars


 


Consolidated




 


 


2017


 


 


 


2017




Extract


 


Reported


 


Adjustment


 


Restated




 


 


$


 


       $


 


  $




Expenses


 


 


 


 


 


 




Cost of sale of goods and services


 


(1,123,455)


 


336,137


 


         (787,318)




Process and engineering expenses


 


(569,997)


 


 (269,606)


 


    (839,603)




 
 
Loss before income tax


 
       


(1,689,910)


 


66,531


 


(1,623,379)




 


 


 


 


 


 


 




Income tax benefit


 


-


 


-


 


-




 


 


 


 


 


 


 




 
Net loss for the period


 


(1,689,910)


 


66,531


 


(1,623,379)




 


 


 


 


 


 


 




 


 


 


 


 


 


 




Loss attributable to the owners of CAP-XX Limited


 


(1,689,910)


 


66,531


 


(1,623,379)




 


 


 


 


 


 


 




 
Consolidated Statement of comprehensive income




 


 


Consolidated




 


 


2017


 


 


 


2017




Extract


 


Reported


 


Adjustment


 


Restated




 


 


$


 


       $


 


 $




Loss for the period


 


 
(1,689,910)


 


66,531


 


(1,623,379)




 


 


 


 


 


 


 




 


 


 


 


 


 


 




Total comprehensive income for the period attributable to owners of CAP-XX Limited


 


(1,687,499)


 


66,531


 


(1,620,968)




 


 


 


 


 


 


 




  
 
Consolidated Statement of financial position at the beginning of the earliest comparative period - 31 December 2017           
 




 


Consolidated




Extract


   31/12/2017
    Reported


Adjustment


31/12/2017
Restated




Current assets


$


        $


   $
 




Inventories


1,601,915


66,531


1,668,446




Total current assets


5,811,923


66,531


5,878,454




 


 


 


 




 
TOTAL ASSETS
 


6,469,175


66,531


6,535,706




 


 


 


 




Net assets


4,627,458


66,531


4,693,989




 
 


 


 


 




Equity


 


 


 




Accumulated losses


(98,242,105)


66,531


 
(98,175,574)
 




 
TOTAL EQUITY


 
4,627,458


 
66,531


 
 4,693,989




 
 
-ENDS-




This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
 
END
 
 
IR EAKDKEFDNEEF