REG - Sondrel (Holdings) - FY 2022 Trading and Business Update

Sondrel (Holdings)Announcement

15/02/2023 07:16

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20230215:nRSO9347Pa&default-theme=true

RNS Number : 9347P  Sondrel (Holdings) plc  15 February 2023

The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the UK Market Abuse
Regulation

 

15 February 2023

Sondrel (Holdings) plc

("Sondrel", the "Company" and together with its subsidiaries the "Group")

 

FY 2022 Trading and Business Update

 

Strong revenue growth and design wins in line with expectations

 

Investment committed into material new contract

 

New design win with tape out to occur in very near future

 

Sondrel (AIM:SND), the fabless semiconductor business providing turnkey
services in the design and delivery of 'application specific integrated
circuits' ("ASICs") and 'system on chips' ("SoCs") for leading global
technology brands, is pleased to provide an update on trading for the
financial year ended 31 December 2022 ("FY22"), and key milestones achieved
since the Group's IPO in October 2022.

 

Key Highlights

 

-     Revenue growth of 116% YoY with FY22 revenue of £17.5 million (FY21:
£8.1 million).

 

-     Record new orders received, with growth of over 130% YoY and
providing strong visibility over FY23 revenue.

 

-     Maiden post IPO design tape out for a leading provider of Edge AI
Hardware Accelerator solutions in January 2023.

 

-     Significant progress made both during 2022 and the start of 2023 in
respect of a material turnkey ASIC engagement secured in Q2 2022 for a Tier 1
OEM Automotive customer production for which could be significant over the
life of the product.

 

-    New design wins in line with Board expectations, delivering a strong
increase in the pipeline for volume supply.

 

-      Strong design pipeline identified for 2023.

 

 

The Company has delivered revenue growth of 116% YoY - with ASIC projects now
accounting for an increased 73% of Group revenues (Consultancy: 27%).  The
net proceeds from the Company's IPO are already being deployed to accelerate
the Group's future growth, including increasing the number of engineers,
investing further in developing the Group's Architecting the Future IP
solutions, and accelerating growth in the USA and other geographies.

 

During FY22, the Group secured design wins in the automotive, Edge-AI, mobile,
networking, and aerospace markets. These wins are strong endorsements of
Sondrel's capabilities and have helped to strengthen the Group's design
pipeline for 2023 and the opportunity to scale volume deliveries beyond that.

 

During FY22, the Group achieved record new design orders received with an
aggregate value of £25.6 million, a 130% year on year increase, and providing
strong FY23 visibility.

 

Given Sondrel's reputation and differentiated design capability, the Group is
often approached by other ASIC designers and manufacturers about how they
could work together to benefit from Sondrel's expertise and global
footprint.  In this regard, the Group was recently approached by a new
customer wishing to benefit from Sondrel's expertise in completing the design
phase of one of its existing ASICs with Sondrel subsequently responsible for
taping out the design, new product introduction/prototyping phases and
production services.  Having been engaged on this new project, the Group has
already completed the design phase, with an estimated value of £1.8 million
in 2023 and expects tape out to occur in the very near future. The Group will
make a further announcement in this regard in due course.

 

In the automotive sector, significant progress has been made in respect of the
material turnkey ASIC engagement for a Tier 1 OEM Automotive customer - with a
project milestone achieved in Q4 2022, albeit later in the quarter than had
previously been expected. A second project milestone, previously anticipated
to occur in late FY22, is now expected to occur in Q1 2023. Notwithstanding
this, investment into the third party components of the project continued in
line with expectations during FY22. Whilst FY23 achievement of the second
project milestone payment and, inter alia, foreign exchange movements and
amortisation treatment will have an effect on FY22 levels of profitability,
the Company had unaudited cash balances of £4.5 million as at 31 December
2022 prior to receipt of the stage payment in respect of the Q4 2022
automotive project milestone in January 2023.   As stated at the time of the
Group's IPO, Sondrel expects typical production volumes for each contract to
deliver revenue of £10m to £100m per annum and the contract with the Tier 1
Automotive customer could deliver production revenue at the upper end of this
range.

 

The Group has continued to deliver all other projects in line with its
expectations, as demonstrated by the January 2023 design tape out for a
leading provider of Edge AI Hardware Accelerator.

 

The Company notes some of the challenges for the semiconductor industry
forecast for 2023 but given that Sondrel services fast growth end markets with
structural growth drivers, the Group has seen no downturn in the industries or
markets that it services.  Furthermore, the Company continues to benefit from
the moves to localising supply chains and international technology trade
restrictions and, notwithstanding expectations that FY23 revenues will now
reflect the revised timing of already contracted project milestones, the
company is confident of its ability to continue to deliver strong growth in
2023 and beyond.

 

 

Graham Curren, CEO of Sondrel, commented:

 

"In our first trading statement since our IPO I'm pleased to report that we
have delivered strong revenue growth, with design wins in line with our
expectations. We have started to deliver on our growth strategy as set out at
our IPO and progress has already been made in expanding our operations in the
United States.

 

I'm especially pleased to see such a strong adoption of our ASIC services by
customers, old and new, as evidenced by the recently announced tapeout of an
Edge AI ASIC project, production for which is potentially worth $20 million to
the Group over 3 years. In addition, our engagement with a new company to
finalise its ASIC design and tape out demonstrates the strength of our
offering.

 

Many of our customers are increasingly optimistic about their market
opportunities and I am looking forward to working with them to deliver
significant production volumes as we seek to achieve our medium term target of
revenues of over £100 million."

 

 

 Sondrel (Holdings) plc                                        Via Buchanan
 Graham Curren, CEO                                            Tel: +44 (0) 20 7466 5000
 Joe Lopez, CFO

 Cenkos Securities plc                                         Tel: +44 (0)20 7397 8900
 Ben Jeynes / Katy Birkin / George Lawson - Corporate Finance
 Alex Pollen / Michael Johnson - Sales

 Buchanan Communications                                       Tel: +44 (0) 20 7466 5000
 Chris Lane                                                    sondrel@buchanan.uk.com (mailto:sondrel@buchanan.uk.com)

 Stephanie Whitmore
 Jack Devoy
 Abby Gilchrist

 

About Sondrel

Sondrel is a UK-based fabless semiconductor company specialising in high end,
complex digital Application Specific Integrated Circuits (ASICs) and System on
Chips (SOCs). It provides a full turnkey service in the design, prototyping,
testing, packaging and production of ASICs and SoCs.

 

The Company is one of only a few companies capable of designing and supplying
the higher-spec chips built on the most advanced semiconductor technologies,
selling into a range of hyper growth end markets such as high-performance
computing, automotive, artificial intelligence, VR/AR, video analytics, image
processing, mobile networking and data centres.  Sondrel designs have enabled
products by leading technology brands including Apple (iPhone), Sony
(PlayStation), Meta's (Oculus), Samsung, Google and Sony smartphones, JVC
(prosumer camcorders), Tesla and Mercedes-Benz cars.

 

Sondrel is well-established, with a 20-year track record of successful
delivery, supported by long standing ecosystem partnerships including Arm,
TSMC and Samsung. Headquartered in the UK, Sondrel has a global presence with
offices in UK, USA, China, India and Morocco.

 

For more information please visit: ir.sondrel.com (//ir.sondrel.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  UPDFFFLLFRISLIV