REG - Trackwise Designs - Delay of Results and Trading Update

Trackwise DesignsAnnouncement

30/06/2023 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:20230630:nRSd4676Ea&default-theme=true

RNS Number : 4676E  Trackwise Designs PLC  30 June 2023

30 June 2023

 

TRACKWISE DESIGNS PLC

 

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

 

Delay of Results and Trading Update

 

Trackwise Designs plc (AIM: TWD), a leading manufacturer of specialist
products using printed circuit technology, provides the following update in
relation to its annual report and financial statements for its financial year
ended 31 December 2022 (the "2022 Annual Report"). The Company also provides
an update on FY22 trading, progress with the existing UK EV OEM customer (the
"EV OEM"), and the OEM Pipeline.

 

In accordance with Rule 19 of the AIM Rules for Companies, the Company is
required to publish its 2022 Annual Report by 30 June 2023. However, due to
intense demands upon the entire management team in dealing both with the
impact of the EV OEM (see below) and working to secure new business, there has
been a delay in completion of the audit process.  As a result, the Company
now expects to publish the 2022 Annual Report during July 2023. Accordingly,
trading in the Company's ordinary shares on AIM will be suspended with effect
from 7.30 a.m. on 3 July 2023 pending publication of the 2022 Annual Report.

 

Contract Update and Pipeline

 

On 30 March 2023, the Company announced that it expected a delay in the
manufacture and deliveries of a fixed quantity of flexible printed circuit
boards (the Parts to the EV OEM), whilst the EV OEM undertakes a redesign and
validation of the Parts to meet their revised design requirements. The Change
Control procedure within the Commercial Order was initiated, including the
impact upon the Parts price and production completion, with a Change Control
Note ("CCN") issued to the EV OEM on 19 April 2023. The Company has reiterated
to the EV OEM that it is in material breach of the Commercial Order as they
have failed to engage with the Company in good faith to conclude the CCN. The
Company has repeated its message to the EV OEM that it remains committed to
agreeing the CCN in good faith.

 

The delay caused by the EV OEM means that the planned increase in working
capital associated with start of production has been delayed. The Company's
cash runway is expected to extend at least into July 2023. The Company's
potential new production customer (a Tier 1) is expected to learn if it has
achieved supplier nomination* shortly on a major EV cell-to-pack ("CCS")
program with OEM B. A final round of price negotiations has taken place with
OEM B, and the Company has been informed that an announcement on a supplier
nomination* may be made in the very immediate future. Upon nomination the
Company will immediately review its funding options.

 

Trackwise continues to have a significant pipeline of identified IHT sales
opportunities with a number of EV CCS opportunities progressing towards Tier 1
supplier nomination. Of note and in addition to the OEM B opportunity detailed
above, an RFQ, from an already-nominated Tier 1 to OEM C, has been received by
the Company, with bids to be submitted in July 2023 for Tier 2 supplier
nomination expected by the end of August 2023.

 

The Company is pleased to announce that it has received this week a six figure
Purchase Order from a US Aerospace OEM, for qualification test samples.

 

FY22 Trading Update

 

Subject to audit, the Company expects to report full year revenues of £7.52m
(2021: £8.01m), and an adjusted** operating loss of approximately £2.95m
(2021: loss of £0.58m). The loss before taxation is expected to be £7.74m
(2021: loss of £1.98m).

 

Net debt*** at 31 December 2022 was £9.34m prior to the receipt of the
placing, subscription and open offer net proceeds of the equity fundraise
which completed in the 2023 financial year of approximately £4.75m (before
expenses).

 

 

 

* A supplier nomination achieved by a Tier 1 supplier and potential Trackwise
production customer is a key step in the process towards the Company working
with the Tier 1 to achieve Tier 2 supplier nomination and then subsequently
enter into a Tier 2 supply contract.

 

** Before exceptional costs: impairment of goodwill of £104,000, new facility
set up costs of £2.845m, and additional production and set up costs of
£1.307m.

 

*** Cash less borrowings, excluding IFRS16 right of use lease liabilities.

 

The financial information for 2022 included in this announcement is unaudited.

 

Enquiries

 

 Trackwise Designs plc                          +44 (0)1684 299 930
 Philip Johnston, CEO                           www.trackwise.co.uk (http://www.trackwise.co.uk/)
 Paul Cook, CFO

 finnCap Ltd                                    +44 (0)20 7220 0500
 NOMAD and Broker
 Ed Frisby/Fergus Sullivan - Corporate Finance

 Andrew Burdis/Barney Hayward - ECM

 Alma PR                                        +44 (0)20 3405 0205
 Financial PR and IR
 David Ison/Kieran Breheny/Pippa Crabtree

 

Notes to editors

Trackwise is a UK-based, King's Award winning, manufacturer of specialist
products using printed circuit technology.

 

The full suite includes: Improved Harness Technology™ ("IHT") and Advanced
PCBs - Microwave and Radio Frequency ("RF"), Short Flex, Flex Rigid and Rigid
Multilayer products.

 

IHT uses a proprietary, patented process that Trackwise has developed to
manufacture multilayer flexible printed circuits of unlimited length. While
the technology has many applications, the directors expect that one of its
primary uses will be to replace traditional wire harnesses in a variety of
industries.

 

The Company operates from three sites, located in Tewkesbury, Stonehouse
and Stevenage. It serves customers in Europe and North America.

 

Trackwise Designs plc was admitted to trading on AIM in 2018 with the ticker
TWD. For additional information please visit www.trackwise.co.uk.
(http://www.trackwise.co.uk.)

 

 

The information contained within this announcement is deemed to constitute
inside information as stipulated under the retained EU law version of the
Market Abuse Regulation (EU) No. 596/2014 (the "UK MAR") which is part of UK
law by virtue of the European Union (Withdrawal) Act 2018. The information is
disclosed in accordance with the Company's obligations under Article 17 of the
UK MAR. Upon the publication of this announcement, this inside information is
now considered to be in the public domain.

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  TSTNKCBDDBKBPAB