FY23 Update

Sondrel (Holdings) plc

10 January 2024

 

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the UK Market Abuse Regulation

10 January 2024

Sondrel (Holdings) plc

("Sondrel", the "Company" and together with its subsidiaries the "Group")

FY23 Update

Sondrel (AIM: SND), the fabless semiconductor business providing turnkey services in the design and delivery of 'application specific integrated circuits' ("ASICs") and 'system on chips' ("SoCs") for leading global technology brands, provides a further update in respect of the financial year ended 31 December 2023 ("FY23").

As announced by the Company on 28 December 2023, Sondrel previously reported that its ASIC project with a Tier 1 automotive OEM will not now achieve tape out until the end of Q1 2024 and involve additional resource and cost to complete.

Discussions are ongoing with the customer over resolution of the funding for the project extension, but the Company now announces that this will not be resolved in time to be reflected in the Company's FY23 results.

It is therefore expected that revenue associated with the automotive project of approximately £2.7m will instead now be recognised in the year ending 31 December 2024 ("FY24"). This revenue includes the £1.7m that is now expected to be received in January and February 2024, as per the announcement on 28 December 2023.

As a result, reported FY23 revenue is now expected to be materially lower than previous expectations* at approximately £10m. There will also be a corresponding impact on reported FY23 loss before tax due to the delay and also the additional resources and cost in advancing the project.

Notwithstanding the delay in the automotive ASIC project, significant new ASIC business opportunities are in final negotiations for project starts in early 2024 and indications remain encouraging that European and US market demand for Sondrel's turnkey ASIC services is strong.

As previously announced, and with a view to managing Group liquidity, negotiations are underway with suppliers to improve the terms of existing supply arrangements, and these are ongoing. The Group also announced that it will need to secure additional capital prior to the end of March 2024 to provide a more permanent solution to meet the Company's short-term working capital requirements, and that, if the payments associated with the automotive project are not received in January and February 2024, this will need to be secured in shorter order. This position remains unchanged.

* Current consensus analyst forecasts are for FY23 revenues of £13.0 million and an adjusted loss before tax of £6.0 million.

 Graham Curren, Chief Executive Officer of Sondrel, commented:

"The end of FY23 was clearly a challenging period. Importantly, our operating model and our growth ambitions remain the same and we are now focused on delivering for all of our stakeholders: our shareholders, our customers and our employees. Whilst it is disappointing to see the FY23 financial results impacted by the previously announced delays in this project, the expectation remains that the project will be completed in Q1 2024 and the Company remains encouraged by significant new ASIC business opportunities in the final stages of negotiation."

For further information:

Sondrel (Holdings) plc	Via Buchanan
Graham Curren, CEO	Tel: [phone]
Nick Stone, Interim CFO
Cavendish Capital Markets Limited	Tel: [phone]
Ben Jeynes / Katy Birkin / George Lawson - Corporate Finance
Michael Johnson / Charlie Combe - Sales & ECM
Buchanan Communications	Tel: [phone]
Chris Lane Stephanie Whitmore	[e-mail]
Jack Devoy
Abby Gilchrist

About Sondrel

Sondrel is a UK-based fabless semiconductor company specialising in high end, complex digital Application Specific Integrated Circuits (ASICs) and System on Chips (SOCs). It provides a full turnkey service in the design, prototyping, testing, packaging and production of ASICs and SoCs.

The Company is one of only a few companies capable of designing and supplying the higher-spec chips built on the most advanced semiconductor technologies, selling into a range of hyper growth end markets such as high-performance computing, automotive, artificial intelligence, VR/AR, video analytics, image processing, mobile networking and data centres.  Sondrel designs have enabled products by leading technology brands including Apple (iPhone), Sony (PlayStation), Meta's (Oculus), Samsung, Google and Sony smartphones, JVC (prosumer camcorders), Tesla and Mercedes-Benz cars.

Sondrel is well-established, with a 20-year track record of successful delivery, supported by long standing ecosystem partnerships including Arm, TSMC and Samsung. Headquartered in the UK, Sondrel has a global presence with offices in UK, USA, China, India and Morocco.

For more information please visit: ir.sondrel.com.

 

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