REG - Sondrel (Holdings) - Trading Update

Sondrel (Holdings)Announcement

28/12/2023 15:00

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RNS Number : 1083Y  Sondrel (Holdings) plc  28 December 2023

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

28 December 2023

Sondrel (Holdings) plc

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

 

Trading Update

 

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 the following trading update.

 

Although continued progress has been made with regard to the ASIC project with
a Tier 1 automotive OEM, £1.7m of payments for the achievement of a
significant milestone under the contract initially expected to be received in
December 2023 have been subject to an unexpected delay and are now expected to
be received during January and February 2024. This automotive contract will
not now achieve the next milestone, being tape out, until late Q1 2024 and
will require additional resource to complete, the funding for which is
currently under discussion with the customer.

 

Significant new ASIC business opportunities are in final negotiation for
project start in early 2024 and indications remain encouraging that European
and US market demand for Sondrel's turnkey ASIC services is strong.

 

However, as a consequence of the above delay, the cash position of the Group
has further declined during December 2023. The Company has been unable to meet
December 2023 payroll in full and therefore the Company's Directors and senior
management have agreed to defer their salaries and fees until such time as the
delayed funds are received. The Company has asked certain employees to defer
on the same basis, and is pleased that in excess of 67% of Group staff have
agreed to full deferral, with a significant additional number agreeing to
partial deferral.

 

With a view to managing Group liquidity, negotiations are underway with
suppliers to improve the terms of existing supply arrangements. The Group will
need to secure additional capital prior to the end of March 2024 to provide a
more permanent solution to meet the Company's short-term working capital
requirements. However, should the delayed payments not be received through
January and February 2024, the Group will need to secure this funding in
shorter order.

 

Graham Curren, Chief Executive Officer of Sondrel, commented:

 

 

"Whilst it is disappointing to see last minute hurdles introduced into the
automotive project, it is encouraging that Sondrel's employees, suppliers and
customers have continued to support the business during this difficult period.

 

"We remain encouraged by the positive development of key opportunities over Q4
2023 and we look forward to providing further updates on new ASIC business
opportunities at advanced stages of negotiation in due course."

 

 

 

For further information:

 

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

 Cavendish Capital Markets Limited                             Tel: +44 (0) 20 7220 0500
 Ben Jeynes / Katy Birkin / George Lawson - Corporate Finance
 Michael Johnson - Sales

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

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

 

 

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