REG - Saietta Group PLC - Commercial Update

SaiettaAnnouncement

13/02/2024 07:00

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RNS Number : 9458C  Saietta Group PLC  13 February 2024

This announcement contains inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014 which forms part of UK law by virtue of the
European Union (Withdrawal) Act 2018 ("MAR").

 

13 February 2024

Saietta Group Plc

("Saietta", the "Company" or the "Group")

 

Commercial Update

 

Further to the announcement of 27 November 2023, Saietta Group plc (AIM:
SED), the multi-national business which designs, engineers and manufactures
complete electric drivetrain (eDrive) solutions for electric
vehicles, provides an update on its commercial activities.

 

Contract Manufacturing Opportunity

 

The Company has received a proposal of £600,000 for the purchase of a
redundant production line at the Company's manufacturing site in Sunderland,
UK. This sale is a result of the Company being unable to reach commercial
agreement on an electrical steering pump contract manufacturing opportunity at
its Sunderland facility, announced previously. The envisaged contract
manufacturing deal, although not for the development any of the Company's
products, was scheduled to have contributed materially to Group revenue over
the medium term, albeit at modest margins.

 

Progress with Lead OEM

 

The Company's joint venture, Saetta VNA, remains engaged with its lead OEM
customer regarding the mass production of Saietta's proprietary AFT and RFT
technology.  Set out below are each of the material contract opportunities
with this customer, as referred to in the announcement of 27 November 2023,
and the status of each.

 

·    Supply of AFT for 3-wheel eDrive vehicle

Status: Purchase order received, pilot production underway, commercial
production expected to commence in October 2024

 

·    Supply of RFT for 3-wheel eDrive vehicle

Status: Purchase order received for pilot production as announced 13 November
2023, pilot production expected to commence in July 2024

 

·    Supply of AFT for 4-wheel eDrive vehicle

Status: Targeting initial purchase order by end of March 2024

 

Progress with Separate OEM

 

The Company remains in discussions with a separate OEM customer about the
potential sale of its RFT eDrive for a 2-wheel vehicle. As previously
indicated, the Company is targeting the receipt of a 'proof of concept' letter
from the customer by the end of March 2024.

 

Working Capital

 

As previously stated, the Company has positive cash balances that take it
through to the end of March 2024. The Company continues to engage with all its
stakeholders regarding its funding requirements beyond the end of the quarter.

 

The Company remains confident in its financial forecasts for the financial
year ended 31 March 2024 as set out 27 November 2023, however forecasts for
the subsequent financial years will inevitably be impacted by today's update.

 

David Woolley, Chief Executive of Saietta, said:

"The strength of relationship with our lead OEM and the market opportunity for
our eDrive solutions remains very compelling. Being unable to agree terms on a
contract manufacturing opportunity is no reflection on the quality of the
Company's products. The sale of the redundant production line in our
manufacturing hub in Sunderland (UK) makes sense for Saietta in comparison to
a relatively low margin contract to manufacture a non-core product under
license. This route allows Saietta to remain 100% focused on our strategic
focus of providing proprietary eDrive solutions to manufacturers of
lightweight electric vehicles. Whereas it does mean that Saietta will not
benefit from contract manufacturing revenue from August 2024, it will deliver
the significant immediate benefit of pulling forward £600k of income and cash
into the financial year ending March 2024.

Alongside this activity the Board continues to work hard on securing
additional funding to take Saietta through to being self-financing. The
Company will update the market as appropriate."

-Ends-

 

 

For any further enquiries, please contact:

 

 Saietta Group                                contact@saietta.com (mailto:contact@saietta.com)

 Tony Gott, Executive Chair

 David Woolley, Chief Executive Officer

 Canaccord Genuity (Nomad and Broker)         +44 (0) 207 523 8000

 Henry Fitzgerald-O'Connor / Harry Pardoe

 

About Saietta Group plc

Listed on the London Stock Exchange's AIM, Saietta is a global business
that designs, develops and manufactures complete electric drivetrain (eDrive)
solutions for established manufacturers of a broad range of electric
vehicles.

Saietta's breakthrough proprietary technologies include AFT (Axial Flux
Technology) and RFT (Radial Flux Technology) motors, power electronics,
powertrain controls, mechanical axles, transmissions and vehicle control
units. Considerable flexibility is built into the core design, meaning
solutions can be quickly and cost effectively tailored to a specific
application.

Saietta works in a highly collaborative way with clients, driven by the
belief that partnership is key to delivering world-class tailored solutions at
pace. Saietta's engineering team takes time to deeply understand a client's
brand, target market sector, competition and the services they require.
Then Saietta develops a bespoke suite of products and services to fast-track
the client to production with eDrive solutions which deliver a sustainable
competitive advantage.

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