Trading Update

RNS Number : 3191N

CAP-XX Limited

19 May 2020

 

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

19 May 2020

 

CAP-XX Limited

("CAP-XX" the "Company")

Trading Update

Update on transfer of manufacturing assets

CAP-XX Limited, a world leader in the design and manufacture of thin, prismatic supercapacitors and energy management systems, today announces a trading update in respect of the financial year ending 30 June 2020 and its recent activities.

Revenue for the year ending 30 June 2020 is expected to be around 15% higher than the prior year at approximately A$3.7m (2019: A$3.2m). Revenue in the second half of the financial year has been affected by a delay in supercapacitor shipments, as some customers have delayed delivery dates and due to the impact of COVID-19 on CAP-XX's manufacturing output. Adjusted EBITDA for the year ending 30 June 2020 is expected to be a loss of approximately A$2.0m (2019: a loss of A$1.6m). The increase in the expected EBITDA loss is due to the factors referred to above and legal costs from the Ioxus patent infringement case.

The current sales order book for the underlying CAP-XX product lines is greater than twice the level at the same point last year. This increase has been driven by the medical, security and telecommunication market segments.

As previously announced, CAP-XX has undertaken a strategy of pursuing several competitor supercapacitor organisations in potential patent infringement cases. In relation to this strategy, the Board remains confident of winning a patent infringement case against Ioxus, Inc ("Ioxus"), but is now not forecasting any significant financial return from this action, as the Board understands that Ioxus has sold all of its assets.

Installation of the first shipment of the former Murata manufacturing assets is underway at CAP-XX's new Sydney manufacturing facility and the second and third shipments have left Murata and are in transit . Due to the COVID-19 pandemic, international shipping schedules have been greatly reduced and this has led to delays in the third and final shipment leaving Kobe port in Japan. Overall, the Board now believes that the completion of the transfer of Murata's manufacturing assets will be delayed by up to three months.   The Board believes that the Company will be able to absorb the anticipated additional costs of this delay within its cash resources.

CAP-XX has now vacated its old premises at Lane Cove and has moved all equipment to the new manufacturing facility at Seven Hills, Sydney . The Company has also secured the necessary construction materials, despite difficult supply lines and the COVID-19 related work restrictions put in place by Government. The Company has made arrangements for remote engineering support to assist with the installation and commissioning of the former Murata production line while personal travel restrictions between Japan and Australia remain in place.

As part of the project   to transfer the former Murata manufacturing assets , CAP-XX has acquired the outstanding finished stock of Murata supercapacitors, which was manufactured to facilitate the transition of Murata's customers to CAP-XX. Direct product sales from CAP-XX of the expanded product range have now commenced, supported by the launch of a new CAP-XX website. Overall, the Company has made good progress in engaging with all of Murata's customers and the Board is confident that the successful retention of these customers will happen largely as expected. However, many of these new customers are reporting high current levels of inventory.  

Cash as of 8 May 2020 was A$4.4m. The Board also expects to receive a payment from the Australian Taxation Office of A$3.3m in the fourth calendar quarter of 2020. The Board is confident that the Company will have sufficient cash to complete the integration of the ex-Murata customers and the former Murata manufacturing assets, which the Board believes will result in a significant uplift in revenues and ultimately positive cashflow from operations in due course.

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

 

END

 

 

TSTGPUUAAUPUUAB