REG - CAP-XX Limited - Interim Results
23/02/2022 07:00
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RNS Number : 5401C CAP-XX Limited 23 February 2022
Dissemination of a Regulatory Announcement that contains inside information
for the purposes of Regulation 11 of the Market Abuse (Amendment) (EU Exit)
Regulations 2019/310.
23 February 2022
CAP-XX Limited
("CAP-XX" or the "Company")
Interim Results for the half-year ended 31 December 2021
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 2021.
Key highlights
· Total revenue up 14% on corresponding half-year
· Product sales up 40% driven by DMF/DMT product lines and IoT
markets
· Sales order book at 31/12/21 more than 40% higher than 31/12/20
· Sales pipeline now in excess of US$50 million p.a. Interest from
global multinational companies increasing, especially for DMH, DMF and DMT
products
· Performance and output of Seven Hills production increased
significantly. GM% greater than 50%
· No royalty or licence income recognised in period
· CAP-XX is vigorously pursuing Maxwell for patent infringement and
AVX for breach of patent licence agreement
· Adjusted EBITDA was a loss of A$0.3 million (2020: Adjusted
EBITDA profit A$0.3 million)
· Cash reserves as at 31 December 2021 were A$5.1 million
* Adjusted EBITDA excludes net Murata project costs, patent infringement costs
and AASB16 expenses
Anthony Kongats, CEO of CAP-XX said:
"We are delighted with the increase in product sales and the pipeline of new
sales opportunities matched by improvements in our manufacturing operations
most notably at Seven Hills, NSW, Australia. We look forward to the second
half of the year."
Electronic copies of CAP-XX's interim results for the half-year ended 31
December 2021 will shortly be available from the Company's website:
www.cap-xx.com (http://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 Joint Broker)
David Hart / Alex Brearley (Corporate Finance)
+44 (0) 20 3328 5656
Tony Quirke (Sales and Corporate Broking)
Cenkos Securities plc (Joint Broker)
Neil McDonald / Pete Lynch
+44 (0) 13 1220 6939
More information is available at www.cap-xx.com (http://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 (http://www.cap-xx.com)
Chairman's statement
The first half of the current financial year has been characterised by
continued strong sales demand. Product sales at A$2.4 million are up 40% on
the corresponding period last year (A$1.7 million) and the order book at the
end of December 2021 was more than 40% higher than at the same time last year.
Pleasingly, the growth in the order book continues to be well spread, coming
from all geographic regions and from different Internet of things ("IoT")
related market segments.
During this period, there were no royalty payments recognised from Kyocera AVX
Components Corporation (formerly AVX Corporation) ("AVX") and Murata. Total
revenue was up 14% at A$2.4 million compared to A$2.1 million. The reported
Net Loss for the period was A$(1.7 million). This compared to a Net Loss of
A$(1.2 million) for the corresponding period last year.
The adjusted EBITDA result for the six months ended December 2021, which
excludes the impact from the Murata project expenditure and patent
infringement legal expenses, was a loss of A$0.3 million (2020: Profit A$0.3
million). The principal reasons for the year-on-year variance was the absence
of both royalty and licensing revenue in 2021 (2020: A$0.4 million), no
government assistance payments associated with COVID in the half year (2020:
A$0.3 million) and the A$0.3 million increase in operational expenses at Seven
Hills as part of the ramp up of production at Seven Hills.
Sales for automotive accessories, electronic locks and battery-less energy
harvesting products have been particularly strong. Around 30 customers moved
into production from the design win stage, and several other customers have
designed CAP-XX products into a second or third product, broadening our sales
base. At the same time, the Company achieved several new design wins in
industrial, wearables, consumer, medical, and automotive products.
Of particular importance, the Company is seeing increasing interest in its
products from global multinational companies. The Company has notably achieved
a design win with Continental, a global Tier-1 automotive component supplier,
and has signed a supply agreement for models to be produced in 2024 - 2030.
The Board believes that demand for both non-cellular and cellular IoT devices
will continue to grow rapidly. This is reflected by the Company's sales
pipeline now growing to in excess of US$50 million per annum. This pipeline
has been growing rapidly and the rate of design wins has been accelerating.
As previously reported, the global pandemic has continued to impact parts of
the Company's operations, most noticeably in our various manufacturing
activities at Seven Hills as well as in Asia. Disrupted supply chains,
shortages of technicians and operators, global travel restrictions, limited
international flights and mandatory quarantine requirements have presented
headwinds. Nevertheless, as a whole, the Company has made excellent
operational progress.
Production at Seven Hills continues to improve to plan. Gross margins for
products made at Seven Hills now exceed 50% (FY 2021: 37%) and are expected to
increase further. The current output and key performance metrics are tracking
in line with our expectations. As expected at this stage of production, the
Company is continuing to address small incremental improvements and is hiring
additional staff for the Seven Hills facility. We expect to see steady
improvement over the remainder of 2022. The Board is confident that target
outputs and other key performance metrics will be reached as expected. The
commissioning of the fourth production line, the DMH line, is expected to be
completed within 12 months, with production expected to start in the first
quarter of 2023 as time and resources allow and subject to customer demand.
CAP-XX's Asian operations have also been impacted by the pandemic. Various
government mandated lockdowns have restricted the Company's ability to
increase output as fast as management would have liked in response to the
growing sales order book. Most noticeably, we have faced delays in recruiting
additional staff and have been unable to travel from Seven Hills to Asia to
oversee pre-production manufacturing of new products and processes.
Nevertheless, CAP-XX has successfully increased output and expects normal
travel to resume shortly.
The Australian Government recently released the Government's first List of
Critical Technologies in the National Interest
(https://www.pmc.gov.au/resource-centre/domestic-policy/list-critical-technologies-national-interest)
. The Government lists supercapacitors as a critical technology of national
interest. CAP-XX is the only manufacturer in Australia of supercapacitors
and the only Australian company manufacturing supercapacitors. The Company has
won projects with Australian government agencies for the supply of
supercapacitors for the development of critical technologies. During the half
year one of these projects was successfully completed and delivered to the
Government.
These and other R&D activities continue to progress and promising
developments in new intellectual property were established to reduce
supercapacitor production costs, increase cell voltage and improve product
performance, using new materials. The Company is in discussions with other
companies regarding licencing and partnering opportunities. The Company
expects several new products to eventually be launched on the back of these
combined efforts, including an even thinner and cheaper supercapacitor and
large supercapacitor modules.
Although no royalty or licence income was recorded in the period, licensing
remains an important potential revenue stream for CAP-XX and the Company
continues to defend its intellectual property. CAP-XX continues to vigorously
pursue its patent infringement action against Maxwell Technologies, now a
wholly owned subsidiary of Tesla Inc. and other companies. The same Delaware
court which ruled in favour of CAP-XX against Ioxus is also hearing the case
against Maxwell Technologies and has issued a timetable for resolution of this
matter. Efforts at mediation have so far been unsuccessful and the Company is
preparing for a trial date starting in October 2022. The Board remains
optimistic of the Company's prospects in this matter. We are currently in a
dispute with Kyocera AVX Components Corporation (formerly AVX Corporation)
(AVX) in respect of allegations that AVX breached our patent licence
agreement, including by failing to pay all royalties payable to CAP-XX. The
matter is currently before the Supreme Court of New South Wales. A further
announcement will be made at the appropriate time and the Company's
expectation is that this will be resolved in the current financial year.
The Board is confident that the growth of sales for IoT devices and the new
Seven Hills production lines will transform the Company's revenue position
with a consequential benefit to cash flow and the cash position of the
Company. We expect to be EBITDA positive in the next financial year and turn
cashflow positive during the second half of the same financial year. Further,
as the sales pipeline is currently in excess of US$50 million, there is also
the possibility of bringing these milestones forward should we secure large
orders.
Patrick Elliott
Chairman
CAP-XX Limited
Consolidated statement of profit or loss
For the half-year ended 31 December 2021
Consolidated
Half-year 2021 Half-year 2020
Currency: Australian Dollars $ $
Revenue from sale of goods and services 2,428,416 2,126,564
Cost of sale of goods and services (1,604,829) (1,158,340)
Gross margin (loss) on sale of goods and services 823,587 968,224
Other revenue 3,120 501
Other income 2,292,781
1,169,442
General and administrative expenses (1,484,788) (944,949)
Process and engineering expenses (490,505) (229,994)
Selling and marketing expenses (392,564) (437,791)
Research and Development expenses (729,501) (740,021)
Project expenses - (2,017,614)
Share based payments (435,053) (68,192)
Other expenses (200,186) (67,250)
(Loss) before income tax (1,736,448) (1,244,305)
Income tax benefit/(expense) - -
Net loss after income tax for the half year (1,736,448) (1,244,305)
(Loss) attributable to members of CAP-XX Limited (1,736,448) (1,244,305)
Loss per share attributable to the ordinary equity holders of the company Cents Cents
Basic loss per share (0.35) (0.28)
Diluted loss per share (0.35) (0.28)
CAP-XX Limited
Consolidated statement of comprehensive income
For the half year ended 31 December 2021
Consolidated
2021 2020
Currency: Australian Dollars $ $
Loss for the half year (1.736,448) (1,244,305)
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Exchange differences on translation of foreign operations (33,476) 102,943
Other comprehensive loss for the half year, net of tax (33,476) 102,943
Total comprehensive loss for the half year attributable to owners of CAP-XX (1,769,924) (1,141,362)
Limited
CAP-XX Limited
Consolidated statement of financial position
As at 31 December 2021
Consolidated
31 December 2021 31 December 2020
Currency: Australian Dollars $ $
ASSETS
Current assets
Cash and cash equivalents 5,055,747 469,472
Receivables 1,123,331 455,454
Inventories 1,076,799 1,041,169
Other 1,203,308 5,698,264
Total current assets 8,459,185 7,664,359
Non-current assets
Property, plant and equipment 2,872,517 2,624,744
Right of Use Assets 2,727,890 3,059,608
Other 397,063 204,808
Total non-current assets 5,997,470 5,889,160
TOTAL ASSETS 14,456,655 13,553,519
LIABILITIES
Current liabilities
Payables 1,050,141 1,489,078
Lease Liabilities 134,546 268,051
Advance payments - Current - 1,442,900
Provisions 795,164 1,401,354
Total current liabilities 1,979,851 4,601,383
Non-current liabilities
Lease Liabilities 2,348,248 2,241,620
Provisions 761,529 53,332
Total non-current liabilities 3,109,777 2,294,952
TOTAL LIABILITIES 5,089,628 6,896,335
NET ASSETS 9,367,027 6,657,184
EQUITY
Contributed equity 114,511,789 108,153,306
Reserves 6,835,441 6,461,120
Accumulated losses (111,980,203) (107,957,242)
TOTAL EQUITY 9,367,027 6,657,184
CAP-XX Limited
Consolidated statements of changes in equity
For the half-year ended 31 December 2021
Consolidated
Contributed Reserve Accumulated losses Total
Equity $ $ $
$
Balance at 1 July 2020 108,010,106 6,289,985 (106,712,937) 7,587,154
Loss for the period as reported in the 2020 financial statements - (3,530,818) (3,530,818)
- 38,766 -
Other comprehensive loss 38,766
Transactions with owners in their capacity as owners:
Contributions of equity, net of transaction costs and tax 756,424 756,424
Employee share options ‑ value of employee services - 105,113 - 105,113
Balance at 30 June 2021 108,766,530 6,433,864 (110,243,755) 4,956,639
- - (1,736,448) (1,736,448)
Profit for the period as reported in the 2021 interim financial statements
Other comprehensive income - (33,476) -
(33,476)
Transactions with owners in their capacity as owners:
Contributions of equity, net of transaction costs and tax 5,745,259 - - 5,745,259
Employee share options ‑ value of employee services - 435,053 - 435,053
Balance at 31 December 2021 114,511,789 6,835,441 (111,980,203) 9,367,027
CAP-XX Limited
Consolidated Statement of Cash Flows
For the half-year ended 31 December 2021
Consolidated
Half-year 2021 Half-year 2020
Currency: Australian Dollars $ $
Cash flows from operating activities
Receipts from customers (inclusive of goods and services tax) 2,565,957 2,460,431
Payments to suppliers and employees (inclusive of goods and services tax) (5,191,497) (5,397,193)
(2,625,540) (2,936,762)
Tax credit received 3,211,314 -
Interest received 3,121 501
Net cash (outflow) from operating activities 588,895 (2,936,261)
Cash flows from investing activities
Payments for property, plant and equipment (27,532) (1,178,792)
Net cash (outflow) from investing activities (27,532) (1,178,792)
Cash flows from financing activities
Proceeds from issue of shares 5,745,259 143,200
Advance payments (1,400,000) 1,442,900
Net cash inflow from financing activities 4,345,259 1,586,100
Net (decrease) in cash and cash equivalents 4,906,622 (2,528,953)
Cash and cash equivalents at the beginning of the half-year 182,601 2,895,482
Effects of exchange rate changes on cash and cash equivalents (33,476) 102,943
Cash and cash equivalents at the end of the half-year 5,055,747 469,472
This general purpose interim financial report, for the half-year reporting
period ended 31 December 2021, 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 2021, is unaudited.
-ENDS-
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