REG - Strip Tinning Hldgs - Interim Results
24/09/2024 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20240924:nRSX3327Fa&default-theme=true
RNS Number : 3327F Strip Tinning Holdings PLC 24 September 2024
24 September 2024
Strip Tinning Holdings plc
("Strip Tinning" or the "Company")
Interim Results
Strip Tinning Holdings plc (AIM: STG), a leading supplier of specialist
connection systems to the automotive sector, is pleased to announce its
unaudited results for the six months ended 30 June 2024.
Despite experiencing short-term trading challenges consistent with those
experienced across the automotive sector as a whole, this has been a
transformational period for the Company. The three significant new nominations
secured have increased the lifetime value of the order book by 181% and
position the Company for medium term growth.
Key Financials:
· Total Revenues of £4.8 million (H1 2023: £5.6 million)
· Battery Technologies sales of £0.3 million (H1 2023: £0.6
million)
· Glazing sales of £4.5 million (H1 2023: £5.1 million)
· Gross Margin of £1.7 million / 35.4% (H1 2023: £1.5 million /
26.7%)
· Adjusted 1 EBITDA of -£0.8 million (H1 2023: £0.05 million)
· Cash generation from operations of -£1.6 million (H1 2023:
£0.1 million); cash balance of £2.0 million with no draw down against the
CID facility
· Completed £5.1 million fundraise in January 2024
· Basic EPS 2 of (14.58)p versus H1 2023 (2.85)p
Operational updates:
· New nominations received in H1 underpin medium-term growth
prospects, with financial benefits starting to be realised from late 2025
onwards
· The Battery Technologies ("BT") division secured a £43.0 million
win with a leading Tier 1 manufacturer
· The Glazing division won two "smart glass" PDLC nominations, together
worth £18.6 million
· Short-term challenges from customer launch delays, weak European
car production, cost pressures and increased overheads to manage growth
· Strengthened senior management team and continued investment into
manufacturing capabilities
Outlook:
· The Board is confident of meeting the revised guidance for EBITDA
provided in the 16 July 2024 trading update
· Long-term growth drivers remain despite near-term automotive
market challenges, which are expected to continue into H2 and into 2025
· Total lifetime sales value of all nominations has increased to
£95.7 million, a 181% increase from the position as at 1 January 2024
· Company sales expected to double by the end of 2026 with 85%
nomination coverage already received
Adam Robson, Executive Chair of Strip Tinning, commented:
"This has been a transformational period for the Company with three
significant new nominations secured increasing the lifetime value of the order
book by 181% and positioning the Company for medium term growth. Despite
experiencing short-term trading challenges consistent with the automotive
sector as a whole, which has impacted financial performance in the current
period, we are pleased to have made such excellent sales progress in H1,
securing record nominations across both divisions. While we expect current
challenges to continue into 2025, we expect to see steadily improving
financial performance as our new sales programmes come into production in H2
2025.
"Our recent wins have given us great confidence in our market and investment
strategy and provide a strong underpinning to our unchanged expectation of a
doubling in sales by the end of 2026. Our immediate focus is on delivering the
current commitments into production, which has required us to accelerate the
growth in our respective launch teams for engineering, project management,
quality, sourcing and sales staff, and to press ahead with investment in our
production facilities."
Enquiries:
Strip Tinning Holdings plc Via Alma
Adam Robson, Executive Chair
Mark Perrins, Chief Executive Officer
Kevin Edwards, Chief Financial Officer
Singer Capital Markets (Nominated Adviser and Sole Broker) +44 (0) 20 7496 3000
Rick Thompson
James Fischer
Alma Strategic Communications (Financial PR) striptinning@almastrategic.com
Josh Royston +44 (0) 20 3405 0205
Joe Pederzolli
A copy of this announcement will be available to view on the Company's website
at www.striptinning.com (http://www.striptinning.com/) .
Introduction
The first half of the year (H1) has been characterised by transformational,
record nominations which underpin the medium-term growth prospects of the
business, but also by challenging near-term market trading conditions which
have impacted financial performance in the current period.
The new nominations received in H1 have a total lifetime sales value of £61.6
million and increase the total lifetime sales value of all nominations held by
the Company to £95.7 million, a 181% increase from the position as at 1
January 2024 (when the nominations book was worth £34.1 million). The three
nominations secured in H1 comprised the Battery Technologies ("BT") division
securing a £43.0 million win and the Glazing division wining two "smart
glass" PDLC nominations, together worth £18.6 million.
As previously announced, given the lead time of these particular projects and
later than expected starts of production, the financial benefits of these wins
will start to be realised from late 2025 onwards, therefore giving limited
benefit to the FY24 financial performance. Sales arising from these
nominations are expected by the end of FY26 to double the sales of the
Company, for which we now have 85% nomination coverage.
Despite the significant wins secured in H1, we are facing challenging
near-term trading conditions, along with the broader automotive supply sector.
These include higher material prices, as copper in May reached levels last
seen in 2022, and moderation of market demand from OEMs as they align
inventory levels in response to lower market demand.
In addition, the size and complexity of our new sales successes, combined with
the strength of our sales pipeline for further new nominations has led us to
pull forward growth in our engineering teams. Resultantly, and as announced in
July, the combination of these factors led the Company to revise expectations
for FY24 and FY25. These revised expectations remain appropriate.
The market
In both the markets we serve, we are seeing good prospects for growth in terms
of our new business sales pipeline. This is focused on high growth niches
backed by our enhanced - product offering (notably manufacture of flexible
printed circuits), despite weakening short-term call-offs against our existing
nominations.
Within the EV battery pack market, growth has slowed due to reduced government
subsidies and softened consumer confidence. For H1 2024, the share of
registrations in Europe 3 (EU, EFTA and UK, which are our major geographic
markets) of battery electric powered vehicles (full and hybrid) increased by
just 3.7% points year-on-year. However, this does mean that in H1 more than
half of all vehicles registered contained a battery pack (50.9%). We believe
that growth rates will increase again given the significant investments being
made in new EV platforms and the continued pressure on governments and
consumers to respond to global warming.
Higher growth rates are being seen in the mid-market, our primary target
market which comprises all lower volume vehicle or equipment platforms,
typically with volumes under 50,000 units per annum in the sectors of high
autonomous vehicles, performance cars, trucks, buses and vans, motorbikes,
e-mobility solutions, off-highway equipment and static storage solutions. In
the truck market, registrations in Europe 4 (EU, EFTA, and UK) of battery
electric powered vehicles (both full and hybrid) increased by c.20%, up from
1.8% of all vehicles sold in H1 2023 to 2.2% in H1 2024. Investment in new
electric mobility and delivery vehicles, from autonomous delivery vans to
static storage packs also continues. These mid-market customers are highly
attracted to working with European suppliers such as Strip Tinning that can
provide local, highly responsive, full service, engineered solutions for their
battery pack developments. This is evidenced by our growing pipeline of new
business customers and vehicle programmes, which has increased from £80
million in April 2024 to £120 million today. There is of course a lag between
this strong investment in new programmes and the resulting production sales,
which will only come post launch of the new vehicles.
Within our Glazing division, we are encouraged by our strong market
positioning. We benefit from having a high share of higher specification
vehicles that we supply to. This allows us to capitalise on the higher volume
growth rates of these vehicle categories and higher product prices resulting
from enhanced electrical functionality within the glazing products. That said,
in the immediate term, growth is slowing.
In H1, total car registrations in Europe grew by just 4.2% year-on-year, and
this growth rate has been slowing over the period. In July 2024, growth was
just 0.2% 5 and industry consensus is for registrations in Europe to be flat
year-on year in H2 2024. This has led to de-stocking by OEMs which has had a
negative impact on the call-off volumes we are so far experiencing in Q2 and
Q3 of this year. In the medium term we expect to see a rebound in demand as
de-stocking ends and economic recovery improves across Europe.
We also benefit from some favourable structural changes which are driving
growth in demand for our glazing products. The use of larger glass panels in
vehicles, especially in the roof, and the adoption of "Polymer Dispersion
Liquid Crystal" (PDLC) "smart glass" in these panels is creating significant
new product opportunities. With our growing capability to deploy flexible
printed circuits (FPC) in our products, we are finding new connector
applications such as in antennae and heating pads which support the sensors
(e.g. cameras) mounted on the glazing which are part of the movement towards
autonomous vehicle functionality. Consequently, we remain confident in our
medium-term sales growth prospects, as illustrated by the progress made in
sales developments during H1 2024, which will drive material future revenue
growth.
Review of Operations
A key milestone was the completion of a £5.1 million fundraise in January
2024, predominately from supportive existing shareholders. This allowed us to
accelerate the growth of our integrated new product launch teams to prepare
for the launches of our new nominations, and to work on winning further
nominations from our strong BT and Glazing sales pipelines. Over H1, we have
increased our total staff headcount from 42 to 49 and we have created
dedicated launch teams for each of our major new nominations.
Our senior management team has also been strengthened. Mark Perrins, who has
led the operational turnaround of the business over the last two years, has
been promoted from Managing Director to Group Chief Executive Officer. Rob
Smith also joined in December 2023 as Chief Technology Officer and Kevin
Edwards began his role as Group Chief Financial Officer on 1 August 2024.
Notwithstanding the aforementioned cost and sales pressures, we are pleased
that gross margins in H1 improved year-on-year from 26.7% to 35.4%, primarily
driven by the elimination of loss-making products and increased productivity.
Our key operational focus is to ensure the successful delivery of our growth
plans. Accordingly, in H1 we started negotiations for the lease of a new
building on our current site, which will increase our floor space from 29,287
square feet to 36,977 square feet. The increased floor space will provide
enough capacity to launch all new products and to further increase production
of certain products, notably more conventional Glazing connectors, for which
we are actively seeking new nominations.
Successfully securing additional new business opportunities in our sales
pipeline is likely to require new production processes, lines, and factory
space. With this in mind, we are applying to the government's Automotive
Transformation Fund for a multi-million-pound grant to support additional
capacity. We are pleased to have been told that we have passed the
Expression of Interest stage of the application process and we will now
proceed to the detailed application phase.
We are also continuing our ESG journey. Notable progress in H1 2024 has been
the addition of further EV charging ports, taking our total now to 10.
Additionally we have also made improvements to our chemical's storage and
handling facilities.
Battery Technologies
Sales in the Battery Technologies (BT) division have been weak in H1 due to
delays in customer programmes primarily caused by customer driven engineering
changes. Sales in H1 24 were £0.3 million (H1 23: £0.6 million). These
delayed orders, worth £0.4m, are expected to be largely delivered in H2.
This pause in sales has allowed more effort to be focused on preparing the BT
division for the start of high-volume production for its new £43 million Cell
Contact System (CCS) contract. Under the terms of the nomination, production
supply will start in Q4 2025 with further pre-production revenues of
over £1.0 million to be received over 2024 and 2025 for the supply of
tooling and pre-serial parts. To date £0.3 million has been received to
support initial tooling orders.
We continue to engage with a growing number of actual and prospective
mid-market customers. Today we produce production parts for three active
customer programmes and samples for multiple programmes in development.
Our pipeline for new BT programmes is developing strongly, with leads
exceeding our current ability to respond in all cases, a factor that
emphasises the value of our strict mid-market focus and the significance of
our plans to further grow our people resources. At the current time, our top
12 sales leads (based on strength of engagement) have a total lifetime sales
value up to 2032 of £120 million, with typical annual sales ranging from
£0.5 million to £5.0 million and production nomination dates ranging from
2025 to 2026.
Investment in our CCS production facilities also continues; notably with the
delivery of our new £0.6 million laser welding line, which was delivered on 1
September. During H1, the facilities have been certified to conform to the
IATF 16949, ISO 9001, ISO45001 and ISO14001 quality standards and have been
subject to and passed 5 customers audits.
In order to fund current operational demands, to meet the production targets
set by the CCS contract already signed, and to be able to secure further
nominations from the growing pipeline of BT programmes, additional capital
expenditure will need to be made, and the Company is assessing the optimum
ways of securing the funding required.
Glazing
Sales in H1 were £4.5 million (H1 2023: £5.1 million). We had anticipated a
decline in sales as we exited the last of the of low-margin products from our
previous portfolio, but sales in the second quarter fell £0.2 million short
of expectations as the ramp-up of new products was slower than anticipated.
However, now that the impact of the Russian invasion of the Ukraine on sales,
materials shortages and price inflation has stabilised, as well as our
internal margin improvement actions, gross margins have improved, from 27.1%
in H1 2023 to 36.7% in H1 2024, although still short of our expectations. We
have further reduced our shop floor headcount from 87 heads at the end of H1
2023 to 55 heads today, however we have faced other unexpected cost pressures,
in particular from the cost of rising copper prices, adverse mix changes, and
some loss of overhead absorption based on the lower sales. We are working to
address this margin weakness with selective price increases, improved sourcing
and further gains in productivity.
The notable development in the Glazing division has been our success in
winning two major new nominations for the supply of an advanced connector to
be used within Polymer Dispersed Liquid Crystal (PDLC) technology "smart"
glass:
1. Nomination with expected lifetime value of £6.3 million for which
supply will start in Q3 2025 and run until 2035, with forecasted annual sales
value peaking at £0.9 million; and
2. Nomination with an expected lifetime value of £12.3 million for which
supply will start in Q3 2026 and run until 2031, with forecasted annual sales
value peaking at £2.8 million.
In "smart glass" applications, electrically activated layers within sunroofs,
roof systems, windows, and visors turn car glass into a dynamically adjustable
and responsive light-management system. The connector benefits from being
built around flexible printed circuits (FPC) which give weight and packaging
advantages within the vehicle roof space. This is a rapidly expanding segment
of the automotive glazing market, with the new technology already being
deployed down through the vehicle platforms from the initial prestige segment
into mid-volume vehicle platforms.
Strip Tinning has had early success in the new PDLC market segment, and since
Q4 2022 has been supplying glazing connectors for the panoramic roofs of the
fully electric BMW iX vehicles. The Company is well placed for further
successes, having invested in in-house FPC manufacturing capabilities as well
as the required engineering know-how to satisfy increasing customer demand for
more complex connector solutions.
The Company has now received four nominations in the "smart" glass market,
which demonstrates Strip Tinning's first mover advantage within this growing
segment and underlines our position as the supplier of choice for specialist
connectors to the Glazing sector. The Company is now supplying smart roofing
connectors to all the leading German automotive OEMs for use across a
significant number of different prestige Electric Vehicle (EV) and Internal
Combustion Engine (ICE) vehicles in their ranges.
The Glazing business will be looking to return to growth in 2025 with the new
production nominations either already won or in the pipeline. We are intent on
delivering growth in both sales and margins through a focus on higher
value-added products and our selective pipeline for these types of products is
developing strongly. At the end of July, our top 12 leads (based on strength
of engagement) had a total lifetime sales value of £25 million with many
production nominations expected over the next 12 months. We are optimistic
that this will deliver net Glazing sales growth in 2025.
KPIs
The company uses Adjusted EBITDA as a key metric, below is a reconciliation to
the Statement of Consolidated Comprehensive Income.
Adjusted EBITDA (807) 51 (1,636)
Depreciation (483) (544) (687)
Amortisation (88) (34) 13
FX (58) (17) 43
Taxation fees - (14) -
Reorganisation (Staff Exceptionals) (88) - (91)
Share Based Payments (75) (90) (62)
FV Adjustment on Derivative CLN Liability (791) - -
Fundraise Fees in P&L (53) - -
Operating Profit / (Loss) (2,442) (648) (2,802)
Financing Costs (excluding FX) (284) (150) (81)
Tax 102 357 412
Net Income (2,624) (441) (2,471)
Principal Risks & Uncertainties
The principal risks and uncertainties faced by the Company remain unchanged
from those elaborated in detail in our full financial reports. The current
results highlight that of all of these, the most significant today are the
risks of automotive market downturns reducing sales from our Glazing division
and new product launch slippage delaying sales of both prototype/sample parts
and eventually production parts in our BT division.
Outlook
The Company remains confident in its medium-term prospects, underpinned by the
£95.7m nominations book, new business pipeline, and the improving margins in
the core Glazing division.
This year has seen us demonstrate our ability to win transformational
nominations across both BT and Glazing, and, based on the strength of the
sales pipeline for both divisions, we are confident that we will continue to
receive further nominations. The nominations already received underpin our
confidence that by the end of 2026 the company's total sales will have
doubled, and the new sales pipeline gives us robustness against any programme
delays that could arise.
Statement of Consolidated Comprehensive Income for the six months ended 30 June 2024
Note Unaudited Unaudited
Six months ended 30 June Six months ended 30 June
2024 2023
£'000 £'000
Revenue 3 4,780 5,646
Cost of sales (3,086) (4,134)
Gross profit 1,694 1,512
Other operating income 4 150 790
(3,437) (2,950)
Administrative expenses
Operating loss (1,593) (648)
Finance costs (342) (150)
Revaluation of derivative liability 7 (791) -
Loss before taxation (2,726) (798)
Taxation 5 102 357
Loss and total comprehensive expense for the period
(2,624) (441)
Loss per share (pence)
Basic and diluted 6 (14.58) (2.85)
Consolidated statement of Financial Position as at 30 June 2024
Notes Unaudited 30 June 2024 Audited 31 December 2023 Unaudited 30 June 2023
£'000 £'000 £'000
ASSETS
Non-current assets
Intangible assets 1,791 1,643 1,193
Right-of-use assets 979 1,090 1,201
Property, plant and equipment 2,948 3,233 3,202
5,718 5,966 5,596
Current assets
Inventories 1,333 1,287 1,518
Trade and other receivables 2,472 2,685 2,427
Corporation tax receivable 1,093 991 386
Cash and cash equivalents 2,030 343 736
6,928 5,306 5,067
Total assets 12,646 11,272 10,663
LIABILITIES
Current liabilities
Trade and other payables (1,445) (2,197) (1,766)
Borrowings (362) (973) (483)
Lease liabilities (196) (201) (173)
(2,003) (3,371) (2,422)
Non-current liabilities
Accruals and deferred income (16) (11) (24)
Borrowings 7 (3,915) (798) (846)
Derivative Fair Value liability 7 (1,392) - -
Lease liabilities (835) (936) (1,064)
Provisions (245) (360) (233)
(6,403) (2,105) (2,167)
Total liabilities (8,406) (5,476) (4,589)
Net assets 4,240 5,796 6,074
EQUITY
Share capital 8 182 154 154
Share premium account 7,931 6,966 6,966
Merger reserve (100) (100) (100)
Other reserve (3) (3) (3)
Retained earnings (3,770) (1,221) (943)
Total equity 4,240 5,796 6,074
Consolidated statement of changes in equity
Share Share Merger reserve Other reserve Retained earnings Total equity
capital premium
£'000 £'000 £'000 £'000 £'000 £'000
At 1 January 2023 154 6,966 (100) (3) (592) 6,425
Loss and total comprehensive expense for the period - - - - (441) (441)
Share based payment - - - - 90 90
At 30 June 2023 154 6,966 (100) (3) (943) 6,074
Loss and total comprehensive expense for the period - - - - (330) (330)
Share based payment - - - - 52 52
At 31 December 2023 154 6,966 (100) (3) (1,221) 5,796
Loss and total comprehensive expense for the period - - - - (2,624) (2,624)
Shares issued in the period 28 965 - - - 993
Share based payment 75 75
At 30 June 2024 182 7,931 (100) (3) (3,770) 4,240
Consolidated statement of cash flows for the six months ended 30 June 2024
Unaudited Six months ended 30 June 2024 Unaudited
Six months ended 30 June 2023
£'000 £'000
Cash flow from operating activities
Loss for the financial period (2,624) (441)
Adjustment for:
Depreciation of property, plant and equipment 371 435
Depreciation of right-of-use assets 111 109
Amortisation of intangible assets 88 84
Amortisation of government grants (150) (49)
Share based payment 75 90
Derivative liability fair value revaluation 791 -
Finance costs 342 150
Taxation credit (102) (357)
Changes in working capital:
(Increase)/decrease in inventories (46) 330
Decrease in trade and other receivables 82 22
Decrease in trade and other payables (847) (1,237)
Cash generated (used in)/from operations (1,909) (864)
Income tax received - 530
Net cash (used in)/from operating activities (1,909) (334)
Cash flow from investing activities
Purchase of property, plant and equipment (86) (604)
Purchase of intangible assets (236) -
Net cash used in investing activities (322) (604)
Cash flow from financing activities
Shares issued (net of issue costs) 993 -
Convertible loan note (net of share issue costs) 3,699 -
Interest paid (142) (150)
Grants received 266 932
Payment of lease liabilities (106) (99)
Repayment of bank loans (537) (19)
Repayment of capital element of hire purchase contracts (255) (280)
Net cash generated from/(used in) financing activities 3,918 384
Increase/(decrease) in cash and cash equivalents 1,687 (554)
Net cash and cash equivalents at beginning of the period 343 1,290
Net cash and cash equivalents at end of the period (all cash balances)
2,030 736
Notes to the interim consolidated financial statements for the six months
ended 30 June 2024
1. Corporate information
Strip Tinning Holdings plc is a public company incorporated in the United
Kingdom. The registered address of the Company is Arden Business Park, Arden
Road, Frankley Birmingham, West Midlands, B45 0JA.
The principal activity of the Company and its subsidiaries (the 'Group') is
the manufacture of automotive busbar, ancillary connectors, flexible printed
circuits and Cell Contacting Systems (CCS).
2. Accounting policies
Basis of preparation
This unaudited condensed consolidated interim financial statements for the six
months ended 30 June 2024 and 30 June 2023 have been prepared in accordance
with IAS 34 'Interim Financial Reporting'.
The accounting policies applied by the Group include those as set out in the
financial statements for the year ended 31 December 2023 and are consistent
with those to be used by the Group in its next financial statements for the
year ending 31 December 2024. The policy for the convertible loan note issued
in the period and accounted for as a compound instrument is explained in note
7. The directors have also reviewed new IFRS accounting amendments applicable
to 2024 in respect of the classification of current and non-current
liabilities, sale and leasebacks and supplier finance arrangements and
consider that none of these are applicable to these financial statements.
There are no new standards, interpretations and amendments which are not yet
effective in these financial statements, expected to have a material effect on
the Group's future financial statements.
The financial information does not contain all of the information that is
required to be disclosed in a full set of IFRS financial statements. The
financial information for the six months ended 30 June 2024 and 30 June 2023
is unreviewed and unaudited and does not constitute the Group's statutory
financial statements for those periods.
The comparative financial information for the full year ended 31 December 2023
has, however, been derived from the audited statutory financial statements for
Strip Tinning Holdings plc for that period. A copy of those statutory
financial statements has been delivered to the Registrar of Companies. The
auditor's report on those accounts was unqualified and did not contain a
statement under section 498(2)-(3) of the Companies Act 2006. The audit report
contained an emphasis of matter in respect of a material uncertainty related
to the continued recognition of the capitalized development costs intangible
asset for the Battery Technologies cash generating unit. The forecasts
prepared by the Group to support the continued recognition of the asset
included uncertainty as a result of revenue from a contract that had yet to be
awarded to the Group. These contracts have now been awarded to the Group in
2024.
These policies have been applied consistently to all periods presented, unless
otherwise stated.
The interim financial information has been prepared under the historical cost
convention with the exception of fair value calculations applied in accounting
for share based payments and the Convertible Loan (CLN). The financial
information and the notes to the historical financial information are
presented in thousands of pounds sterling ('£'000'), the functional and
presentation currency of the Group, except where otherwise indicated.
Going concern
After making appropriate enquiries, the directors have a reasonable
expectation that the Group has adequate resources to continue in operational
existence for at least twelve months from the date of approval of the
financial information. In adopting the going concern basis for preparing the
financial statements, the directors have considered a base case going concern
model. The results of this model suggested that with the financing
arrangements available to the business and / or realistic mitigating actions,
the Group has adequate resources to continue in operational existence. For
this reason, the directors continue to adopt the going concern basis in
preparing the Group's financial information.
3. Segmental and geographical destination reporting
IFRS 8, Operating Segments, requires operating segments to be identified on
the basis of internal reports that are regularly reviewed by the company's
chief operating decision maker. The chief operating decision maker is
considered to be the executive Directors.
The Group has two operating segments for the sale of automotive circuit
components for glazing products and glazing circuits for electric vehicles
('BT' segment). The operating segments are monitored by the chief operating
decision maker and strategic decisions are made on the basis of adjusted
segment operating results. All assets, liabilities and revenues are located
in, or derived in, the United Kingdom. Management reporting and information is
prepared at a revenue and gross profit level only for a Glazing segment (sale
of glazing circuits for petrol/diesel vehicles) and BT as follows
Glazing BT Total
6 months ended 30 June 2024 £'000 £'000 £'000
Revenue 4,506 274 4,780
Cost of sales (2,854) (232) (3,086)
Gross profit 1,652 42 1,694
Glazing BT Total
6 months ended 30 June 2023 £'000 £'000 £'000
Revenue 5,050 596 5,646
Cost of sales (3,680) (454) (4,134)
Gross profit 1,370 142 1,512
Turnover with the largest customers (including customer groups) representing
in excess of 10% of total revenue in the period for 3 customers (2023: 3
customers) has been as follows:
Six months ended 30 June 2024 Six months ended 30 June 2023
£'000 £'000
Customer A 1,030 1,575
Customer B 523 711
Customer C 594 491
All revenue arises at a point in time and relates to the sale of automotive
busbar, ancillary connectors and flexible printed circuit product. Turnover by
geographical destination is as follows:
Six months ended 30 June 2024 Six months ended 30 June 2023
£'000 £'000
UK 300 706
Rest of Europe 3,331 2,738
Rest of the World 1,149 2,202
4,780 5,646
4. Other operating income
Six months ended 30 June 2024 Six months ended 30 June 2023
£'000 £'000
Government revenue development grants 135 741
Amortisation of capital grants 15 49
150 790
The group was awarded a £1.5m UK innovation development grant in respect
of revenue expenditure with £20,000 recognised in first half of 2024,
£335,000 in the second half of 2023, £741,000 recognised against eligible
costs in the first half of 2023, £389,000 was recognised in the second half
of 2022.
A second grant in respect of revenue expenditure was awarded, totalling
£166,000. £51,000 of this was recognised in the second half of 2023, with
the remaining £115,000 recognised in the first half of 2024.
.
5. Income tax
Six months ended 30 June 2024 Six months ended 30 June 2023
£'000 £'000
Current tax:
UK corporation tax 102 78
Adjustments in respect of prior periods - 279
Total current tax credit 102 357
Deferred tax:
Origination and reversal of temporary differences - -
Total deferred tax credit - -
Total tax credit 102 357
The credit for the period can be reconciled to the loss for the period as
follows:
Six months ended 30 June 2024 Six months ended 30 June 2023
£'000 £'000
Loss before taxation (2,726) (798)
Income tax calculated at 25% (2023: 22%) (682) (176)
Expenses not deductible including derivative loss 280 20
Enhanced research and development allowances
(118) (71)
Surrender of losses for R&D tax credit 153 59
Enhanced capital allowances - (20)
Deferred tax not recognised 265 110
Adjustments in respect of prior periods - (279)
Total tax credit (102) (357)
The tax rate used to calculate deferred tax not recognised is 25% at 30 June
2024 (2023: 25%), being the rate at which the timing differences would be
expected to unwind based on enacted UK corporate tax legislation at each
balance sheet date.
A deferred tax asset, estimated at approximately £720,000 at 30 June 2024,
has not been recognised for losses carried forward net of accelerated capital
allowances. The key accounting judgement made is that it is not yet considered
sufficiently probable that the losses will be utilised in the short term.
6. Earnings per share
The calculation of the basic and diluted earnings per share is based on the
following data:
Earnings Six months ended 30 June 2024 Six months ended 30 June 2023
£'000 £'000
Loss for the purpose of basic and diluted earnings per share being net loss
attributable to the shareholders
(2,624) (441)
Six months ended 30 June 2024 Six months ended 30 June 2023
Number of shares
Weighted average number of ordinary £0.01 shares for the purposes of basic
and diluted loss per share
17,997,174 15,459,714
There were options in place over 734,505 shares at 30 June 2024 (2023:
734,505) that were anti-dilutive at the period end but which may dilute future
earnings per share.
7. Non-current liabilities
30 June 2024 31 December 2023 30 June
2023
£'000 £'000 £'000
Borrowings
Convertible loan note liabilities 3,298 - -
Loans 118 155 192
Asset based borrowings 499 643 654
3,915 798 846
Derivative Fair Value liability 1,392 - -
On the 15(th) January 2024, the company received the £3.65m of proceeds, net
of issue costs, of a £4m convertible loan note from its shareholders. The
value of the conversion rights is recognised as a derivative fair value
liability within non-current liabilities. This is valued at each balance sheet
date using an appropriate option pricing model and was a £601,000 liability
on the date of issue of the convertible loan. The balance of the net proceeds
received was recognised as the initial loan note liability on issue and
together with subsequent financing charges is shown within borrowings in
non-current liabilities. The £791,000 loss on revaluation of this
derivative liability at 30 June 2024 is shown in the Statement of
Comprehensive Income below finance costs. The fair value of the derivative
liability is directly impacted by movements in the quoted share price and can
therefore fluctuate significantly with the 30 June 2024 liability increased as
a result of the higher share price on that date. If the revaluation was done
on the 20 September 2024 the full £791,000 will reverse and a further
profit of £153,000 would be recognised. The annual coupon rate is 10% and
the loan is repayable 15 January 2029.
8. Share capital
The movements in share capital have been as follows:
Number of £0.01 shares Nominal Share premium
£'000 £'000
Share issued on incorporation 1 - -
Shares issued in exchange for Strip Tinning Limited shares 9,999,999 100 -
EIS and VCT placing shares issued at £1.85 each 2,702,702 27 4,973
Other placing shares issued at £1.85 each 1,621,622 16 2,984
Exercise of options at £0.116 each 813,045 8 86
Share issue costs (1,077)
Shares issued to employee benefit trust at £0.01 each 322,345 3 -
At 30 June 2023 and 31 December 2023 15,459,714 154 6,966
EIS and VCT placing shares issued at £0.40 each 2,765,375 28 965
At 30 June 2024 18,225,089 182 7,931
1 Adjusted for FX impacts, share based payments, restructuring and IPO
exceptionals
2 Based on weighted average number of shares in the period
3
https://www.acea.auto/pc-registrations/new-car-registrations-4-3-in-june-2024-battery-electric-14-4-market-share/
4
https://www.acea.auto/pc-registrations/new-car-registrations-17-8-in-june-battery-electric-15-1-market-share/
5
https://www.acea.auto/pc-registrations/new-car-registrations-0-2-in-july-2024-battery-electric-12-1-market-share/
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 IR FXLLLZKLBBBDRecent news on Strip Tinning Holdings
See all newsREG - Strip Tinning Hldgs - Receipt of R&D tax credit
AnnouncementREG - Strip Tinning Hldgs - Trading and Business Update
AnnouncementREG - Strip Tinning Hldgs - Update on Battery Technologies Nomination
AnnouncementREG - Strip Tinning Hldgs - Pre-Close Trading Update
AnnouncementREG - Strip Tinning Hldgs - Lifetime Value of Contracted Nominations Increased
Announcement