AGM Trading Update

CAP-XX Limited

03 November 2023

 

Dissemination of a Regulatory Announcement that contains inside information for the purposes of Regulation 11 of the Market Abuse (Amendment) (EU Exit) Regulations 2019/310.

3 November 2023

CAP-XX Limited

("CAP-XX" or "the Company")

AGM Trading Update

CAP-XX Limited, a world leader in the design and manufacture of supercapacitors and energy management systems, announces that at the Company's Annual General Meeting to be held later today, the following statement will be made in relation to the Company's activities.

Current Sales

Preliminary October 2023 product revenue was US$0.4m (approximately AUD$0.6m) and for the four months to the end of October 2023 was US$0.9m (AUD$1.5m). This compares with product revenues of US$0.7m (AUD$1.1m) in the previous corresponding four month period of last year, a year on year increase of approximately 35%.

October is typically one of the highest revenue months for the financial year and this revenue result is an early indicator that the overstocking and supply chain issues that were evident during FY2023 are showing signs of recovery.

Order Intake

CAP-XX's sales priorities remain focused on prismatic Electric Double Layer Capacitor (EDLC) and cylindrical 'can' business, followed by customer module solutions.

The Company is seeing an increase in activity and interest in CAP-XX's products from the USA, Europe, India as well as South Africa and this is evidenced by a marked increase in the request for samples across the product range, especially in Europe and the USA. Activities in Asia remain subdued due to the economic situation post COVID.

The current order backlog is US$1.15 million and order intake is supportive of a further improvement in revenues.

Enquiries and orders from Europe and the USA are higher, but we are experiencing some slower order intake from China and India, primarily for the cylindrical 'can' products where the overstocking position of many customers/distributors has not yet fully worked through.

Distribution and Sales Strategy

We have made good progress in building our new sales and distribution capabilities. We have appointed additional distributors and sales representatives mainly in the USA, Europe and India. There are further appointments currently in final negotiations which are expected to be completed by calendar year-end 2023. These new distributors and sales representatives are commission based and have been trained in relation to the CAP-XX product range and we expect to see revenue results progressively build through calendar 2024.

The whole CAP-XX team is working hard to ensure that a strong focus on the customer is maintained, in addition to building good relationships with suppliers, distributors and sales representatives.

CAP-XX will remain focused on Internet of Things (IoT), automotive, medical, military, industrial and telecom applications and associated markets with a particular concentration on handheld devices, tracking, security and live aid systems.

New Product Development

We continue to advance our new products, specifically DMH, 3V and SMD. The DMH product samples are on track for delivery by calendar year-end 2023, with commercial production expected to commence in early calendar year 2024. First orders are already in hand with several other customers evaluating the product.

The 3V product continues to be evaluated by several potential large volume customers and we continue to expect design wins, with initial orders expected in the first half of calendar year 2024.

The cylindrical SMD device is continuing through development trials and we anticipate design wins through the remainder of 2023/24, with full commercial production scheduled for 2024/25.

In addition to these new products that we have been working on for some time, we have re-formatted some EDLC prismatic supercapacitors as embedded versions, which allows our customers to use our technology as a plug and play solution.

Intellectual Property

We are well advanced in the final evaluation of the Ionic graphene product and are currently in joint venture negotiations. We are also actively evaluating other technologies that are complementary to our own.

The Maxwell legal case is currently set for hearing from 11 to 15 December 2023 in the US Supreme Court.  We are unable to make any further comment at this time, except that our team is very well prepared.

We last received royalty payments from AVX in January 2023 for the 2022 year. We have been disputing the contract interpretation adopted by AVX and there are preliminary court hearings underway. The Company's position has not altered, and we remain confident of a favorable outcome in both cases.

Quality Certification

CAP-XX is very conscious of the need to have the highest level of quality compliance in place. We already have ISO 9001 certification covering quality management systems and are actively working to achieve ISO 14001 which covers environmental management systems. The Company views these as essential standards aimed at meeting customers' requirements and expectations.

Production

Operating performance at Seven Hills and our contract manufacturer in Malaysia is improving. However, there are more gains to be made through programs of continuous improvement.

Cash

Currently, cash reserves are approximately AUD$0.5m, excluding the Australian Tax R&D Rebate for 2022/23. The rebate was formally submitted in October 2023, and a payment of AUD$2.1m is expected to be received in the coming weeks.

Outlook

As highlighted in the Annual Report, CAP-XX is reviewing the current sales project pipeline, including feasibility studies and timelines.

We expect to see the new distribution and sales strategy begin to demonstrate positive results in the coming months. We are seeing product revenues improving and, barring a general economic downturn, we expect this to continue.

Finally, the Company is keenly looking forward to the initial revenues from new products in which the Company has made significant investments over recent years.

For further information contact:

CAP-XX Limited Pat Elliott (Chairman) Lars Stegmann (CEO)	[phone]
Kreab (Financial PR) Robert Speed	[phone]
Allenby Capital (Nominated Adviser and Joint Broker) David Hart / Piers Shimwell (Corporate Finance) Tony Quirke/Stefano Aquilino (Sales and Corporate Broking)	[phone]
Cavendish Securities plc (Joint Broker) Neil McDonald / Pearl Kellie	[phone]

More information is available at www.cap-xx.com

Notes to Editors:

CAP-XX (LSE:CPX) is a world leader in the design and manufacture of ultra-thin prismatic and compact cylindrical supercapacitors. Its prismatic supercapacitors are manufactured in Australia and Malaysia and its cylindrical supercapacitors are manufactured in China. The company's strong intellectual property (IP) portfolio includes 11 patent families. CAP-XX's ultra-thin prismatic supercapacitors are ideal for space-constrained electronics applications where small energy storage device size and thickness are important. The unique feature of CAP-XX supercapacitors is their very high-power density and high-energy storage capacity in space-efficient thin prismatic and compact cylindrical packages. For more information, visit https://www.cap-xx.com/ or email [e-mail].

 

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