REG - Windar Photonics PLC - Trading Update

Windar PhotonicsAnnouncement

12/11/2024 07:00

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RNS Number : 7955L  Windar Photonics PLC  12 November 2024

12 November 2024

 

Windar Photonics plc

 

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

 

Trading Update

 

 

Windar Photonics plc (AIM: WPHO), the technology group which has developed its
WindEye and WindTimizer wind sensors and its related 'Nexus' software suite
designed to efficiently increase the power output and reduce lifetime
operating costs of electricity generating wind turbines, today provides an
update on current trading and on its latest business development initiatives.

 

Current Trading

 

As we indicated in the announcement of 12th September, the order pipeline
globally is substantial, with significant trial and repeat orders expected in
the North American market in particular.

 

In the Americas and Australia, the Company is in advanced discussions with
several independent power producers ("IPPs"), some of which are large
multinational corporations who collectively own in excess of 1,750 V82
turbines and more than 700 Senvion turbines. If all these discussions were to
translate into orders, the resultant turnover would be in the region of
€60m, excluding software sales. Preliminary contact has also been
established with IPPs who control a further 200 V82 turbines, and in Japan and
China, we are in discussions with IPPs who control several hundred turbines of
varying types and where test results have been encouraging.

 

The discrete size of a number of these potential orders is very large in the
context of the Company's historic turnover. Discussions surrounding these
capital projects are complex, detailed, labour intensive and time consuming.
For some of the largest orders, the Company is considering a multi-year
recurring revenue structure that may simultaneously improve the end user's
cash flow and deliver a superior net present value to Windar. The quantity of
new customer discussions has stretched our sales resources and capability and
as a consequence, it is taking longer to conclude some of these discussions
than we had previously anticipated.

 

Accordingly, we should reset expectations for 2024 and 2025. The Board sees no
reason to alter its view regarding the growth opportunities for the Group nor
its view that the Company is close to an inflection point with respect to its
turnover and its profitability. However, until regular software income becomes
a larger proportion of the Company's revenue (which we believe will occur over
the next 2 to 3 years), the Company's financial results in a given year will
be sensitive to the timing of large orders. In the current financial year, two
specific orders with €4m of revenue attached are now more than likely to
slip into 2025. These orders represent a follow-on order to an existing US
customer and a delay in getting final results from a test with another US
customer on the Senvion turbine platform - the initial results of which are
extremely positive. Consequently, we believe that the company should achieve
revenue of €6m - €7m of turnover (dependant on customer mix) (2023:
€4.7m) implying EBITDA of between €0.4 and €0.9m in 2024 (2023: €0.2m)
(both of which would constitute record highs) and that any shortfall for 2024
will be fully recovered in 2025.  We shall update investors regarding these
orders as they are received.

 

Production

 

The Board has worked with determination on this issue since the emergence of
supply chain issues which arose late last year. Production has improved
markedly to the point where the Board now believes that the Company has the
requisite resource and flexibility to produce 2,500 units per annum when it
needs to do so.

 

Sales Function

 

As stated above, the numerous discussions with IPPs have imposed a significant
workload upon our sales team and this has demonstrated a need to provide more
resources to strengthen further the sales function. Notwithstanding these
pressures, the Board emphasises that no discussions have been terminated nor
orders 'lost'. Discussions have simply taken longer to conclude.

 

Outlook

 

Current sales development with both existing and new customers on Vestas, and
additional turbine platforms, gives us confidence in the medium to long term
opportunity for global sales and improved quality of earnings. As indicated
above, the quantum of the ultimate prize is considerable.

 

The scope for further developments in our suite of Nexus turbine performance
enhancing software will in due course introduce new, recurring revenue streams
which will support our accelerating sales activity, particularly in North
America.

 

With a strong team, a robust sales pipeline, a strong balance sheet, ongoing
successful product development, improved manufacturing capacity and greater
supply chain resilience, the Board continues to look to the future with
confidence.

 

 

 

This announcement contains inside information for the purposes of Article 7 of
the UK version of Regulation (EU) No 596/2014 which is part of UK law by
virtue of the European Union (Withdrawal) Act 2018, as amended ("MAR"). Upon
the publication of this announcement via a Regulatory Information Service,
this inside information is now considered to be in the public domain.

 

 

For further information, please contact:

 

 Windar Photonics plc
 Jørgen Korsgaard Jensen, CEO                      Tel: +45 24234930

 Gavin Manson

 Grant Thornton UK LLP

 Nominated Adviser
 Philip Secrett / Harrison Clarke / Elliot Peters  Tel: +44 (0) 20 7383 5100

 Dowgate Capital

 Broker
 James Serjeant / Russell Cook                     Tel: +44 (0) 20 3903 7715

 

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