REG - Sondrel (Holdings) - Key Milestone Update and Notice of Results

Sondrel (Holdings)Announcement

15/05/2023 07:00

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RNS Number : 3410Z  Sondrel (Holdings) plc  15 May 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 May 2023

Sondrel (Holdings) plc

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

 

Key Milestone Update and Notice of Results

 

Update on material contract with Tier 1 automotive customer

 

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, provides a further update on its Tier 1 automotive customer
contract and notice of its final results for the year ended 31 December 2022
("FY22").

 

Further to the announcement on 15 February 2023, significant progress and
investment has continued in respect of the material turnkey ASIC engagement
for a Tier 1 OEM Automotive customer and remains on schedule for the release
to silicon manufacture later this year. Following mutual agreement of the
reorganisation of certain project workstreams in order to prioritise and
enable enhanced performance in the design, along with ensuring the optimal
time to tapeout (and ultimately production), in line with industry practice,
key milestones have been redefined and the payment receipt connected to the
second project milestone, previously anticipated to occur in Q1 2023, is now
expected to occur in the next few months.

 

As stated at the time of the Company'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 OEM Automotive customer could deliver production
revenue at the upper end of this range.

 

The Group also continues to deliver other live ASIC projects in line with its
expectations, as demonstrated by the January 2023 design tapeout for a leading
provider of Edge AI Hardware Accelerator solutions and the March 2023 tapeout
of an ASIC design for a leading provider of home network devices, both of
which were fully funded by the customer.

 

Based on production volumes and lifetime currently projected by the customers,
revenues for Sondrel associated with the production and supply of these two
projects would be worth in excess of US$20 million to the Company over three
years and US$25 million over five years, respectively.

 

Notice of Results

 

The Company will announce its full year results for the year ended 31 December
2022 ("FY22") on Wednesday, 24 May 2023 when, as announced by the Company on
15 February 2023, the Company expects to report FY22 revenues of £17.5
million, reflecting 116% year on year growth (FY21: £8.5 million). In
addition, the Company announces that, excluding both the non-cash impact of a
£1.1m write off of a capitalised asset and now confirmed treatment of FY22
amortisation charges, the Company expects to report Adjusted EBITDA* in line
with market expectations** (FY22 Adjusted EBITDA loss of £1.1m including the
effects of these two accounting provisions).

 

There will be an in-person presentation for analysts at 9:30 a.m. (BST) on the
day of the announcement, hosted by Graham Curren (CEO) and Joe Lopez (CFO), at
Buchanan's offices at 107, Cheapside, London EC2V 6DN.

 

Please contact Buchanan for further details.

 

*Adjusted EBITDA is defined as earnings before interest, tax, depreciation,
amortisation and IPO costs.

 

**Current market expectations of FY22 Adjusted EBITDA as at the date of this
announcement of £1.0 million.

 

Graham Curren, Chief Executive Officer of Sondrel, commented:

 

"We continue to work closely with our Tier 1 automotive customer as we
progress towards the next project milestone. This project, together with the
other tapeouts we have announced in recent months, provides the Group with
significant momentum and considerable traction in building a solid base of
production revenues in the years ahead."

 

''Our focus on end markets that are aligned with strong and enduring global
technology megatrends means that we have a good pipeline of design
opportunities for 2023 and I look forward to updating the market on these as
the year progresses.''

 

 

 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: www.ir.sondrel.com
(http://www.ir.sondrel.com/) .

 

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