TIDMTWD
RNS Number : 6939U
Trackwise Designs PLC
30 March 2023
TRACKWISE DESIGNS PLC
('Trackwise', the 'Company' or the 'Group')
Contract and Trading Update
Trackwise Designs plc (AIM: TWD), a leading manufacturer of
specialist products using printed circuit technology, announces an
update on progress under the New Commercial Order for its UK EV OEM
customer (the "EV OEM") and an update on trading for the year ended
31 December 2022.
Contract Update
On 21 October 2022 the Company announced a new agreement (the
"New Commercial Order" or the "Contract") for a fixed quantity of
flexible printed circuit boards (the "Parts") for delivery through
to July 2023. The New Commercial Order provided for a GBP3.99
million advanced payment, which was paid in October 2022, with the
balance of the contract value (being an additional GBP3.99 million)
to be satisfied by standard payments on deliveries of the Parts.
The Company expected to commence volume production for the EV OEM
customer in Q1 of 2023, with first cash receipts for Parts expected
in early April 2023, and production completion in July 2023.
The Company now expects a delay in the manufacture and
deliveries of 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 Contract has
been initiated, including the impact upon the Parts price and
production completion. At this time the Change is yet to be
quantified and agreed but the Company expects this to include an
amended payment profile, to offset the delay in cash receipt to the
Company as a result of the redesign and validation of the
Parts.
The Company previously announced on 14 December 2022 that,
subject to completion of the fundraising, and including cashflows
from the New Commercial Order, it would be funded through to
completion of the New Commercial Order in July 2023, and then on
through to August 2023. This position was then improved by the
small upsizing of the Placing and cash received from the Open
Offer. In the event this expected Parts redesign and consequential
production delay as referred to above are not resolved in the
coming months, this would be expected to reduce the Company's
previously announced cash runway to the end of May 2023, or
potentially later in the event of an amended payment profile from
the EV OEM.
Trading Update
Subject to audit, the Company expects to report full year
revenues of GBP7.52m (2021: GBP8.01m), an adjusted* operating loss
of approximately GBP2.92m (2021: loss of GBP0.58m) and a pre-tax
loss of GBP7.71m** (2021: loss of GBP1.98m).
Net debt*** at the year-end was GBP9.34m prior to the receipt of
the placing and open offer net proceeds of the recent equity raise
which completed in the new financial year of approximately GBP4.75m
(before expenses).
As previously announced, following a disappointing first half at
Stevenage Circuits Limited ("SCL") in 2022, a new managing director
was appointed in July 2022 and the business started to see improved
operations and performance. Whilst progress has been made, the
investment held by the Company has been subject to a review for
impairment. The impairment test has been based on risk adjusted
future cash flows, based on latest internal forecasts, discounted
using appropriate discount rates. The Company now expects to
recognise a 100% impairment of its investment in SCL and a 100%
impairment of the inter-company loan owed by SCL in the Company's
forthcoming unconsolidated Company accounts for the year ended 31
December 2022. The resulting impairment charge in the Company's
consolidated income statement for the year ended 31 December 2022
will be determined by the time of publication of the Company's
forthcoming final results.
Stonehouse Site and Sales Pipeline
The Stonehouse Site factory equipment installation is now
complete. The impact of the redesigned Parts on the installed
equipment has yet to be determined but is not expected to be
material.
Trackwise continues to have a significant pipeline of identified
IHT sales opportunities with a number of the previously identified
EV cell-to-pack CCS opportunities progressing positively towards
the anticipated supplier nomination dates.
*Before exceptional costs and share based payments
** Before accounting for the SCL impairment
***Cash less borrowings, excluding IFRS16 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
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/Caroline Forde/Josh Royston/Kieran
Breheny
Notes to editors
Trackwise is a UK-based 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.
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.
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END
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