REG - CAP-XX Limited - Trading and Operational Update

CAP XXAnnouncement

26/01/2023 10:45

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20230126:nRSZ9746Na&default-theme=true

RNS Number : 9746N  CAP-XX Limited  26 January 2023

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.

 

 

26 January 2023

 

 

CAP-XX Limited

("CAP-XX" or the "Company")

 

Trading and Operational Update

 

 

CAP-XX Limited, a world leader in the design and manufacture of
supercapacitors and energy management systems, provides the following trading
and operational update in relation to the current financial year:

 

·      Total revenue for the half year to 31 December 2022 down 34% to
A$1.6m on corresponding prior half-year (H1 2021: A$2.4m).

 

·    Product sales down 40% on corresponding half-year. The Company does
not believe it has not lost any significant business to competitors.

 

·      Sales order book at 31 December 2022 was 47% higher than at
beginning of July 2022 and 85% higher than at August 2022.

 

·    Sales order book has increased 41% since 31 December 2022.  Sales
pipeline continues to increase - now in excess of US$65 million p.a.

 

·    Performance of Seven Hills production continues to improve with
reject rates reducing by nine percentage points compared to the previous
period.

 

·    Adjusted EBITDA* for the half year expected to be a loss of A$966k
(H1 2021: Adjusted EBITDA loss A$305k).

 

·      Cash reserves as at 31 December 2022 were A$0.5 million with no
debt. In addition, the Company has an unused line of credit of approximately
A$1.7 million ensuring current funding is sufficient for the Company's
expected needs.

 

·    The interim results will be released on 28 February 2023.

* Adjusted to exclude legal expenses for patent infringement and the
amortisation of share-based payment expenses.

 

 

As foreshadowed at the time of the full year results statement and in the
subsequent AGM statement, the current financial year started slower than the
prior half-year due to a combination of market influences. Whilst the Board
had been hopeful that the impact of these market influences would reduce, this
has not occurred with a consequential impact on CAP-XX's revenues.  These
market influences include: industry wide supply chain bottlenecks, especially
in China, a global shortage of integrated circuits, which is affecting our
customer order volumes, and increasing pessimism over the state of the global
economy. The flow-on effects of factory closures in Asia led to delays in
shipments of critical components and has, in turn, resulted in delayed sales
of supercapacitors. Further, concerns about the ongoing war in Ukraine, rising
interest rates and energy costs, and the threat of recession have also caused
some customers to reduce their purchase orders as they look to reduce their
inventory levels and to delay new product launches.  For CAP-XX, the greatest
falls have been in the demand from the Asian/APAC region for cylindrical
supercapacitors.

Our market intelligence suggests that the drop in our H1 sales is in line with
the experience of our direct competitors' and other component suppliers in the
same and related markets. To our knowledge, no significant business has been
lost to a competitor during this period.

Following a review of the sales for the first half of the financial year and
the outlook for the second half, the Board is now of the view that the revenue
for the full financial year ending 30 June 2023 will be significantly below
current market forecasts, and that as a result, the Company will be loss
making at the adjusted EBITDA level.

Conversely, the CAP-XX sales pipeline continues to grow strongly and is
currently over US$65 million.  The timing of when these opportunities will
translate into meaningful sales is dependent on many factors outside of our
control. On average, we are finding that sales conversion for small projects
or projects for smaller companies typically takes between 12 to 18 months,
while larger volume projects or larger customers are typically 24 to 36
months. In the case of automotive and medical projects, these times can
stretch to over five years. Factors which drive these timescales include: the
customer's anticipated outlook for end-market demand and their availability of
resources, external approvals and end-customer related engineering variations.
The Board is confident that the second half performance will be significantly
better than the first half based on: CAP-XX's order intake over Christmas and
New Year steadily increasing in what is a historically slow period for orders;
some customers beginning to bring delivery dates forward; and new projects
moving into production in the second half of the year. In addition, there are
signs of a recovery in the cylindrical supercapacitor supply chain and
improving orders for cylindrical supercapacitors.

 

Anthony Kongats, CEO of CAP-XX said:

"The first half of the year has been very challenging, but the Board is
confident that CAP-XX will see a rebound in the second half, based on recent
customer orders received and design wins. Our operational performance
continues to improve and we look forward to a much stronger sales performance
as projects won move into the production phase in the second half of the year
against the background of a continuing tough market."

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 / Piers Shimwell (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/)

 

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 (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  TSTFLFVILLIRFIV