Interim Results

RNS Number : 9954R

CAP-XX Limited

06 March 2019

 

Dissemination of a Regulatory Announcement that contains inside information according to REGULATION (EU) No 596/2014 (MAR).

6 March 2019

 

 

CAP-XX Limited

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

Interim Results for the half-year ended 31 December 2018

CAP-XX Limited, a world leader in the design and manufacture of thin, flat supercapacitors and energy management systems, is pleased to announce its interim results for the half-year ended 31 December 2018.

Key highlights

·      Total Sales Revenue of A$1.6 million (2017: A$1.5million) up 4%

·      Increased like for like gross margin of 54.1% (2017: 49.1%) due to realisation of the Company's previously announced manufacturing initiatives*

·      Continuing improvement in EBITDA performance.  EBITDA loss reduced to A$1.0 million (2017: loss A$1.4 million)**

·      TDK licence arrangement completed in October 2018. Ongoing licencing negotiations with numerous other international parties are at varying stages

·      Sales pipeline for prismatic and cylindrical can supercapacitors are at historically high levels. The Company is reviewing options for additional production capacity. In the short term, due to worldwide economic uncertainties, the timing of when certain significant pipeline projects may move to the mass production stage remains unclear

·      Product development initiatives remain on track, particularly for the 3 Volt product

·      5% reduction in year on year overhead expenses of A$2.8 million (2017: A$3.0 million), excluding share based payments expense

·      Cash reserves as at 31 December 2018 were A$4.6 million (2017: A$1.5 million) which includes the proceeds of the equity subscription in November 2018 (£1.75 million) and the R&D Tax Rebate of A$1.6 million

* Current period Gross Margin result and prior period comparative Gross Margin results have been adjusted to reflect changes in the accounting policy for Gross Margin as set out in Note 2.

** EBITDA excludes amortisation of employee share options.

Anthony Kongats, CEO of CAP-XX said:

"Significant milestones for CAP-XX were delivered over the six months to 31 December 2018. The benefits from previously highlighted manufacturing initiatives are being realised, with a significant improvement in reported gross margins. The ongoing growth in the pipeline of major new sales projects has given the Board the confidence to start examining options for expanding production capacity. The TDK licence agreement has been signed and good progress has been made towards the completion of several other licence arrangements. Development of future product releases, especially the 3V product, remains on schedule."

Electronic copies of CAP-XX's interim results for the half-year ended 31 December 2018 will shortly be available from the Company's website: www.cap-xx.com.

For further information contact:

CAP-XX Limited

Anthony Kongats (Chief Executive Officer)                                    [phone]

Kreab (Financial PR)

Robert Speed                                                                               [phone]

Allenby Capital (Nominated Adviser and Broker

David Hart / Alex Brearley                                                            [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 thin, flat supercapacitors and energy management systems used in portable and small-scale electronic devices, and to an increasing extent, in larger applications such as automotive and renewable energy. The unique feature of CAP-XX supercapacitors is their very high power density and high energy storage capacity in a space-efficient prismatic package. These attributes are essential in power-hungry consumer and industrial electronics, and deliver similar benefits in automotive and other transportation applications. For more information about CAP-XX, visit www.cap-xx.com

Chairman's statement The Company's performance for the six months ended 31 December 2018 has delivered some material steps towards the achievement of the organisation's short to medium-term goals. The six months ended 31 December 2018 can be characterised by: gross margin improvement due to the full realisation of process and production initiatives that have been highlighted in previous reports (and notwithstanding the changes in accounting policies described below); royalties from the TDK licence arrangement beginning to be received; and healthy cash reserves due to the proceeds from an equity subscription and the R&D Tax rebate being received. Additionally, the historically high sales pipeline augurs well for long-term sales growth prospects. In order to represent more accurately the Gross Margin being delivered by the sale of CAP-XX's goods and services,  adjustments have been made in the statements of profit or loss and financial position to transfer the impact of both expenditure on eligible research and development activities and work in progress production from the cost of sale of goods and services to operating expenditure and work in progress inventory respectively. This adjustment has been made in both the current period and the comparative period presented below, to ensure that a like for like comparison remains in place. Further details regarding this adjustment can be found in Note 2 below.  The sales pipeline for both prismatic and the recently released cylindrical can supercapacitors are at historically high levels and covers several key market segments, including Automotive, Healthcare, Industrial and Tracking. These opportunities are at various stages of the sales process, but provide the Board and management with confidence in CAP-XX's medium to longer-term sales revenue prospects. To this end, the Board has asked the Company to look at options to increase its manufacturing capacity, including both internal and external manufacturing process options. In the short-term, the degree of current worldwide economic uncertainty may result in some delays as to when certain of the identified projects within the pipeline may proceed to mass production. Projects are not being cancelled, but are at risk of slippage in terms of the timing of when initial orders were expected to be received. This is a common finding when negotiating with third-parties in the electronic components industry. It is too early to determine the effect that any such timing slippage may have on the results for the second half of the current financial year.  Total revenue for the six months to 31 December 2018 was A$1.6 million (2017: A$1.5 million). Product sales were up on the previous year by 5%. Royalty and licencing revenue were flat when compared to the previous year. For the six-month operating period ended 31 December 2018, the EBITDA loss of A$1.0 million (2017: EBITDA loss of A$1.4 million), which excludes the amortisation of the share based payment expense, improved A$0.4 million or 32% from the previous year. Cash reserves as at 31 December 2018 were A$4.6 million (2017: A$1.5 million), benefiting from the proceeds of the equity subscription in November 2018 (£1.75 million) as well as the receipt of A$1.6 million (2017: A$1.6 million) from a R&D Tax Rebate in the same month.   The Board was pleased to finalise the TDK licencing arrangements in October 2018 and the initial payments from this agreement have been received over the last six months. There are still several other material licensing agreements being negotiated with several worldwide potential licencees, although given that these licencing discussions are all at differing stages of completion, the Board is reluctant to state publicly when they are likely to be completed.  However, it should be stressed that the successful completion of licencing negotiations remains a key short-term objective for the CAP-XX management team.  The CAP-XX research and development team are on track for the delivery of their product development road map, with no major obstacles being encountered. This is especially the case for the development of the 3V product which remains on track for release later in 2019. The Board remains confident that the Company is starting to make material progress towards the achievement of its long-term goal of achieving a cash break-even position as soon as possible. In terms of the outcome for the full year ending 30 June 2019, although the Company's long-term sales pipeline is healthy, CAP-XX's immediate concern is the short term sales revenue position, and the Board intends to provide a trading update in respect of the second half of the 2019 financial year before the end of April 2019, once all relevant customer visits are completed and their short term order positions are better understood. Patrick Elliott Chairman

CAP-XX Limited

Consolidated statement of profit or loss

For the half-year ended 31 December 2018

		Consolidated
		Half-year 2018	Half-year 2017
Currency: Australian Dollars		$	$
Revenue from sale of goods and services		1,603,484	1,544,554
Cost of sale of goods and services		(735,147)	(787,318)
Gross margin (loss) on sale of goods and services		868,337	757,236
Other revenue		9,519	24,446
Other income		884,211	720,000
General and administrative expenses		(1,067,995)	(924,762)
Process and engineering expenses		(552,131)	(839,603)
Selling and marketing expenses		(339,220)	(358,159)
Research and development expenses Share based payments		(809,812) (567,813)	(781,754) (152,789)
Other expenses		(41,468)	(67,994)
(Loss) before income tax		(1,616,372)	(1,623,379)
Income tax benefit/(expense)		-	-
Net loss after income tax for the half year		(1,616,372)	(1,623,379)
(Loss) attributable to members of CAP-XX Limited		(1,616,372)	(1,623,379)
Loss per share attributable to the ordinary equity holders of the company		Cents	Cents
Basic loss per share		(0.52)	(0.54)
Diluted loss per share		(0.52)	(0.54)

 

CAP-XX Limited

Consolidated statement of comprehensive income

For the half year ended 31 December 2018

		Consolidated
		2018	2017
Currency: Australian Dollars		$	$
Loss for the half year		(1,616,372)	(1,623,379)
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Exchange differences on translation of foreign operations		(38,496)	2,411
Other comprehensive loss for the half year, net of tax		(38,496)	2,411
Total comprehensive loss for the half year attributable to owners of CAP-XX Limited		(1,654,868)	(1,620,968)

CAP-XX Limited

Consolidated statement of financial position

As at 31 December 2018

				Consolidated
			31 December 2018	30 June 2018	31 December 2017
Currency: Australian Dollars			$	$	$
ASSETS
Current assets
Cash and cash equivalents			4,623,238	1,911,346	1,514,463
Receivables			327,296	823,090	264,839
Inventories			1,814,766	1,404,205	1,668,446
Other	Note 1		921,106	1,784,384	2,430,706
Total current assets			7,686,406	5,923,025	5,878,454
Non-current assets
Property, plant and equipment			590,138	572,949	420,745
Other			236,507	236,507	236,507
Total non-current assets			826,645	809,456	657,252
TOTAL ASSETS			8,513,051	6,732,481	6,535,706
LIABILITIES
Current liabilities
Payables			835,112	1,144,289	1,047,310
Provisions			734,425	760,491	708,167
Total current liabilities			1,569,537	1,904,780	1,755,477
Non-current liabilities
Provisions			125,018	41,296	86,240
Total non-current liabilities			125,018	41,296	86,240
TOTAL LIABILITIES			1,694,555	1,946,076	1,841,717
NET ASSETS			7,001,795	4,786,405	4,693,989
EQUITY
Contributed equity			101,867,507	98,565,062	98,389,390
Reserves			5,741,487	5,212,170	4,480,173
Accumulated losses			(100,607,199)	(98,990,827)	(98,175,574)
TOTAL EQUITY			7,001,795	4,786,405	4,693,989

CAP-XX Limited

Consolidated statements of changes in equity

For the half-year ended 31 December 2018

	Consolidated
		Contributed Equity $	Reserve $	Accumulated losses $	Total $
Balance at 1 July 2017		98,343,719	4,324,973	(96,552,195)	6,116,497
Loss for the period as reported in the 2016 financial statements		-		(2,438,632)	(2,438,632)
Other comprehensive loss		-	(33,031)	-	(33,031)
Transactions with owners in their capacity as owners:
Contributions of equity, net of transaction costs and  tax		221,343			221,343
Employee share options ‑ value of employee services		-	920,228	-	920,228
Balance at 30 June 2018		98,565,062	5,212,170	(98,990,827)	4,786,405
Profit for the period as reported in the 2017 interim financial statements		-	-	(1,616,372)	(1,616,372)
Other comprehensive income		-	(38,496)	-	(38,496)
Transactions with owners in their capacity as owners:
Contributions of equity, net of transaction costs and tax		3,302,445	-	-	3,302,445
Employee share options ‑ value of employee services		-	567,813	-	567,813
Balance at 31 December 2018		101,867,507	5,741,487	(100,607,199)	7,001,795

           

CAP-XX Limited

Consolidated Statement of Cash Flows

For the half-year ended 31 December 2018

		Consolidated
		Half-year        2018	Half-year 2017
Currency: Australian Dollars		$	$
Cash flows from operating activities
Receipts from customers (inclusive of goods and services tax)		2,259,627	1,853,316
Payments to suppliers and employees (inclusive of goods and services tax)		(4,303,597)	(4,163,655)
		(2,043,970)	(2,310,339)
Tax credit received		1,596,547	-
Interest received		9,519	24,446
Net cash (outflow) from operating activities		(437,904)	(2,285,893)
Cash flows from investing activities
Payments for property, plant and equipment		(114,153)	(129,518)
Net cash (outflow) from investing activities		(114,153)	(129,518)
Cash flows from financing activities
Proceeds from issue of shares		3,302,445	45,671
Net cash inflow from financing activities		3,302,445	45,671
Net (decrease) in cash and cash equivalents		2,750,388	(2,369,740)
Cash and cash equivalents at the beginning of the half-year		1,911,346	3,881,792
Effects of exchange rate changes on cash and cash equivalents		(38,496)	2,411
Cash and cash equivalents at the end of the half-year		4,623,238	1,514,463

This general purpose interim financial report, for the half-year reporting period ended 31 December 2018, has been prepared in accordance with Australian equivalents to International Financial Reporting Standards (AIFRSs), other authoritative pronouncements of the Australian Accounting Standards Board, Urgent Issues Group Interpretations and the Corporations Act 2001. This general purpose interim financial report, for the half-year reporting period ended 31 December 2018, is unaudited.

Note 1 - Other Assets

Currency: Australian Dollars

                     Consolidated

                                                                                                                                2018                                            2017

          $                                              $

R&D Rebate - Australian Tax Office (FY17)                                                                -                                       1,551,489

R&D Rebate - Australian Tax Office (FY18)                                                      751,000                                        720,000

Royalty Payments - Accrual                                                                                80,320                                           90,000

Prepayments                                                                                                       78,959                                           58,390

Other                                                                                                                   10,827                                           10,827

Total Other Assets                                                                                          921,106                                      2,430,706

Note 2    Restatement of comparatives

In order to reflect accurately the delivered gross margin, an adjustment has been made to the value of cost of goods and services. This adjustment is necessary to value the expenditure associated with the cost of sale of goods and services in order to accurately record the Gross Margin generated from the sale of CAP-XX's goods and services. Having revisited the gross margin calculation, it has been found that the value of cost of goods and services has been overstated, which has principally included materials, inventory being understated and process and engineering expenses being understated. This is due to the adjustments required in the valuation of work in progress inventory and the reclassification of feedstock expenditure associated with eligible research and development expenditure. This error has been corrected and is reflected in the relevant balances recorded at 31 December 2018 and for the comparative period.

Extracts, being only those line items affected, are disclosed below:

Consolidated Statement of profit or loss of the earlier comparative period - 30 June 2018

Currency: Australian Dollars		Consolidated
		2018				2018
Extract		Original basis of calculation		Adjustment		Restated
		$		$		$
Expenses
Cost of sale of goods and services		(2,704,077)		738,155		(1,965,922)
Process and engineering expenses		(1,213,190)		(554,856)		(1,768,046)
Loss before income tax		(2,621,931)		183,299		(2,438,632)
Income tax benefit		-		-		-
Net loss for the period		(2,621,931)		183,299		(2,438,632)
Loss attributable to the owners of CAP-XX Limited		(2,621,931)		183,299		(2,438,632)

Consolidated Statement of comprehensive income

		Consolidated
Currency: Australian Dollars		2018				2018
Extract		Original basis of calculation		Adjustment		Restated
		$		$		$
Loss for the period		(2,621,931)		183,299		(2,438,632)
Total comprehensive income for the period attributable to owners of CAP-XX Limited		(2,621,931)		183,299		(2,438,632)

Consolidated Statement of financial position at the beginning of the earlier comparative period - 30 June 2018       

	Consolidated
Extract	31/12/2018     Original basis of calculation	Adjustment	31/12/2017 Restated
Current assets	$	$	$
Inventories	1,220,906	183,299	1,404,205
Total current assets	5,739,726	183,299	5,923,025
TOTAL ASSETS	6,549,182	183,299	6,732,481
Net assets	4,603,106	183,299	4,786,405
Equity
Accumulated losses	(99,174,126)	183,299	(98,990,827)
TOTAL EQUITY	4,603,106	183,299	4,786,405

Extracts, being only those line items affected, are disclosed below:

Consolidated Statement of profit or loss of the earliest comparative period - 31 December 2017

Consolidated Statement of profit or loss

Currency: Australian Dollars		Consolidated
		2017				2017
Extract		Reported		Adjustment		Restated
		$		$		$
Expenses
Cost of sale of goods and services		(1,123,455)		336,137		(787,318)
Process and engineering expenses		(569,997)		(269,606)		(839,603)
Loss before income tax		(1,689,910)		66,531		(1,623,379)
Income tax benefit		-		-		-
Net loss for the period		(1,689,910)		66,531		(1,623,379)
Loss attributable to the owners of CAP-XX Limited		(1,689,910)		66,531		(1,623,379)

Consolidated Statement of comprehensive income

		Consolidated
		2017				2017
Extract		Reported		Adjustment		Restated
		$		$		$
Loss for the period		(1,689,910)		66,531		(1,623,379)
Total comprehensive income for the period attributable to owners of CAP-XX Limited		(1,687,499)		66,531		(1,620,968)

Consolidated Statement of financial position at the beginning of the earliest comparative period - 31 December 2017           

	Consolidated
Extract	31/12/2017     Reported	Adjustment	31/12/2017 Restated
Current assets	$	$	$
Inventories	1,601,915	66,531	1,668,446
Total current assets	5,811,923	66,531	5,878,454
TOTAL ASSETS	6,469,175	66,531	6,535,706
Net assets	4,627,458	66,531	4,693,989
Equity
Accumulated losses	(98,242,105)	66,531	(98,175,574)
TOTAL EQUITY	4,627,458	66,531	4,693,989

-ENDS-

 

END

 

 

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