Q3 Trading Update

Strip Tinning Holdings PLC

31 October 2023

 

31 October 2023                                    

Strip Tinning Holdings plc

("Strip Tinning" or the "Company")

Q3 Trading Update

Strip Tinning Holdings plc (AIM: STG), a leading supplier of specialist connection systems to the automotive sector, is pleased to provide an update on trading covering the period 1 July to 30 September 2023 ("Q3").

Trading in the third quarter of the financial year ending 31 December 2023 ("FY23") has been in line with management's expectations, and accordingly the Board expects to meet FY23 market guidance¹.

Year-to-date revenues of £8.2m (Q3 YTD FY22: £8.0m) and a positive adjusted EBITDA performance represents a steady continuation of the turn-around from the losses of 2022. Improved performance has primarily been driven by the prioritisation of increased gross margins due to price rises which came into effect on 1 January 2023, as well as enhanced productivity.

The European automotive market continues to grow strongly, with ACEA reporting that overall year-to-date new car registrations are up by 16.9%². Strip Tinning continues to be well-positioned to capitalise on the improving prospects across the wider market. This is reflected in the full year sales outlook which is ahead of expectations, and in the growing new nominations pipeline which we expect will benefit sales in FY24 and beyond. 

On the Glazing side, the Company is supplying prototypes on multiple high value programmes which are expected to result in nominations, both in the current year and FY24.  These programmes are in the target segment of higher technology applications, often including flexible printed circuit elements produced on the recently completed new production line.

The EV pipeline continues to develop well and the Company now has in hand orders for protype parts on five new EV programmes.  The Board had expected the announcement of a major EV nomination with a Tier 1 by now, and whilst the Company remains confident of securing the nomination, this is now likely to be in early 2024, with the Tier 1 award from the end customer yet to be determined. The start of production date for the programme remains unchanged.

The Company is pleased to announce that it has secured a £166k grant from the Advanced Propulsion Centre³ UK ("APC") Feasibility Studies competition which supports projects which will develop large-scale manufacturing facilities in the UK. This grant is further to the £1.4m of funding previously awarded by the APC's Scale-up Readiness Validation ("SuRV") scheme.  The new grant is being primarily spent with a leading automotive consultancy who will complete their study in the first quarter on 2024.

Adam Robson, Executive Chair of Strip Tinning, commented:

"It is pleasing that the operational enhancements implemented have driven improved financial performance in the current year to date. Having learnt valuable lessons from the external difficulties faced in FY22, we have emerged a more mature business and well placed to exploit the increasing number of opportunities we are seeing across the wider automotive sector. We are encouraged with the growing size, as well as quality of our sales pipeline for both our EV and Glazing programmes, and we look forward to announcing new production nominations as they arise."

(1)     Strip Tinning understands that market expectations for the year ended 31 December 2023 are for revenues of £9.4m, Adjusted EBITDA of £0.1 m and net cash/debt of -£3.6m. (Source: FactSet)

(2)       https://www.acea.auto/pc-registrations/new-car-registrations-9-2-in-september-battery-electric-14-8-market-share/

(3)   The APC  is a non-profit organisation that collaborates with UK Government, the automotive industry and academia to accelerate the transition to a net-zero automotive industry - https://www.apcuk.co.uk/86-9-million-for-scale-up-and-rd-of-net-zero-vehicle-technology/

Enquiries:

Strip Tinning Holdings plc                                                                                                            Via Alma PR

Adam Robson, Executive Chairman

Richard Barton, Chief Executive Officer                                                                                 

Adam Le Van, Chief Financial Officer

Singer Capital Markets (Nominated Adviser and Sole Broker)                    [phone]

Rick Thompson

James Fischer

Alma (Financial PR)                                                                                                        [phone]

Josh Royston                                                                                                                     [e-mail]

Joe Pederzolli                                                                                   

 

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