Interim Results

RNS Number : 2718Q

CAP-XX Limited

25 February 2021

 

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 .

25 February 2021

 

 

CAP-XX Limited

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

Interim Results for the half-year ended 31 December 2020

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 2020.

Key highlights

· Adjusted EBITDA profit was A$0.32 million compared to the corresponding half-year loss of A$(0.44 million)*.

·     EBITDA loss of A$0.9 million* (2019: loss of A$0.8 million*) is in line with the corresponding half-year period to 31 December 2019, but does include the Murata Project expenditure of A$2.0 million (2019: Nil).

· Total Sales Revenue of A$2.1 million (2019: A$1.9 million) up 10%

· Product Revenue of A$1.7 million (2019: A$1.4 million) is up 26%

·     Royalty and license fees were A$0.4 million (2019: A$0.6 million)

·     Project to transfer the former Murata manufacturing assets has made excellent progress with key project deliverables and milestones on track

· Order book double the level as at the same time last year driven by IoT markets. Customer demand building. Potential demand already exceeds annual capacity

· Increasing interest from global multinational companies. Design win achieved with Tier 1 Auto supplier. Approved as supplier to global smart phone manufacturer

·     Vigorously pursuing several companies for patent infringement

·   Operating expenses of A$2.5 million (2019: A$ 2.8 million), excluding share-based payments expense and Murata project expenses, reduced due to lower patent infringement expenses and overseas travel

·   Cash reserves at the end of December 2020 were A$0.5 million (2019: A$1.8 million) which does not include the proceeds of the R&D Tax Rebate of A$3.1 million received in January 2021

* EBITDA excludes amortisation of employee share options. Adjusted EBITDA excludes amortisation of employee share options, Murata project costs and any related R&D tax rebate, patent infringement expenses and AASB16 lease costs

Anthony Kongats, CEO of CAP-XX said:

"We are delighted with both the progress of the Murata project and the strength of the underlying business, against the unprecedented background resulting from Covid-19. We enter the second half of the year with a strong order book and rising enquiry levels as we raise production levels at our newly installed manufacturing facility."

Electronic copies of CAP-XX's interim results for the half-year ended 31 December 2020 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 (Corporate Finance   [phone]

Tony Quirke (Sales and Corporate Broking)

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 first half of the current financial year has been characterised by strong sales demand. Product sales at A$1.7m are up 26% on the corresponding period last year (A$1.4m) and the order book at the end of December 2020 was 75% higher than at the same time last year. Furthermore, since the period end the order book has continued to grow and as at the end of January stood at over 100% higher than at the end of January 2020. Pleasingly, the growth in the order book is well spread, coming from all geographic regions and from different Internet of things (IoT) related market segments. Conversely, Royalty payments from AVX and Murata have stagnated. Total revenue was up 10% at A$2.1m compared to A$1.9m. The reported Net Loss for the period was A$(1.2m) including Murata project expenses of A$2.0m. This compared to a Net Loss of A$(1.0m) for the corresponding period last year. If project costs and their related R&D tax rebate, patent infringement expenses, amortisation of employee share options and AASB16 lease expenses are excluded, then the adjusted EBITDA profit was A$0.32m compared to a loss of A$(0.44m) for the corresponding period last year. Cash at the end of December 2020 was A$0.5m before the receipt of the A$3.1m R&D tax rebate in early January 2021. Our sales and marketing focus on IoT market segments has delivered good results. The Board believes that demand for both non-cellular and cellular IoT devices is growing rapidly.  Sales for automotive accessories, electronic locks and battery-less energy harvesting products have been particularly strong. At the same time, the Company achieved several new design wins in wearables, consumer, medical and automotive products. Pleasingly, the Company is seeing increasing interest in its products from global multinational companies. The Company has notably achieved a design win with a global Tier-1 automotive component supplier for passenger vehicle door locking and climate control applications and is working on a second project related to data logging with the same Tier-1 supplier as it completes the formal supplier accreditation process.  This Tier-1 supplier was previously a customer of Murata.  In addition, CAP-XX has been approved as a supplier by a leading global smart phone manufacturer. In the area of energy harvesting, the Company is working with Epishine of Sweden and ePeas of Belgium to introduce battery-less solutions for a range of IoT products. The three companies will be jointly hosting a training webinar for prospective customers next month. Announcements of other collaborations are expected over the coming months. As previously reported, the global pandemic has continued to impact the Company most noticeably in our various manufacturing activities. The Company had planned and agreed to bring in a number of Japanese engineers and experts to assist it with the commissioning of the new production lines at Seven Hills. However, global travel restrictions, limited international flights and mandatory hotel quarantine requirements, made this impossible. Subsequently, the Company's engineers, with the assistance of Murata and other Japanese equipment suppliers, revised the plans for the commissioning of the production lines to continue under remote assistance and guidance from Japan. It is a credit to everyone involved that the Company was still able to complete the commissioning of the production lines and construction of the new 3,300 sq. metre facility within the original budget proposed, which was set well before the start of the pandemic. The electrode, DMF and DMT production lines are now commissioned and operational, with product shipping to customers. The current output and key performance metrics are currently tracking in line with our expectations. As expected at this stage of production, the Company is continuing to address small incremental improvements and is hiring additional staff for the Seven Hills facility. We expect to see steady improvement over the remainder of 2021. The Board is confident that target outputs and other key performance metrics will be reached by the end of 2021 as initially planned. The commissioning of the fourth production line, the DMH line, is still planned for the latter half of 2021, with production expected to start in early 2022 as time and resources allow and subject to customer demand. CAP-XX's Malaysian operations have also been impacted by the pandemic. Various Malaysian government mandated lockdowns have restricted the Company's ability to increase output as fast as management would have liked in response to the growing sales order book. Most noticeably, we have faced delays in recruiting additional staff and have been unable to travel from Seven Hills to Malaysia to oversee pre-production manufacturing of new products and processes. Nevertheless, CAP-XX has successfully increased output and expects output to increase further over the coming months. R&D activities continue to progress and promising developments in new intellectual property were made to reduce supercapacitor production costs, increase cell voltage and improve product performance, using new materials. Licensing remains an important revenue stream for CAP-XX and the Company continues to defend its intellectual property. CAP-XX continues to vigorously pursue its patent infringement action against Maxwell Technologies, now a wholly owned subsidiary of Tesla Inc. and other companies. The same Delaware court which ruled in favour of CAP-XX against Ioxus is also hearing the case against Maxwell Technologies and has issued a timetable for resolution of this matter. Court mediation is scheduled for September 2021 and if the matter is not resolved trial is scheduled for October 2022. The Board remains optimistic of the Company's prospects in this matter. CAP-XX is continuing to pursue Ioxus for the payment of the awarded damages. However, it remains unclear whether Ioxus will be capable of paying. The Company is also in discussions with other companies about licencing opportunities. The Board is confident that the commissioning of the Murata production lines will transform the Company's revenue position with a consequential benefit to cash flow and the cash position of the Company.  Patrick Elliott Chairman

CAP-XX Limited

Consolidated statement of profit or loss

For the half-year ended 31 December 2020

		Consolidated
		Half-year 2020	Half-year 2019
Currency: Australian Dollars		$	$
Revenue from sale of goods and services		2,126,564	1,932,591
Cost of sale of goods and services		(1,158,340)	(862,558)
Gross margin (loss) on sale of goods and services		968,224	1,070,033
Other revenue		501	9,964
Other income		2,292,781	941,678
General and administrative expenses		(944,949)	(1,205,098)
Process and engineering expenses		(229,994)	(478,521)
Selling and marketing expenses		(437,791)	(404,326)
Research and Development expenses		(740,021)	(746,771)
Project expenses		(2,017,614)	-
Share based payments		(68,192)	(173,774)
Other expenses		(67,250)	(42,127)
(Loss) before income tax		(1,244,305)	(1,028,942)
Income tax benefit/(expense)		-	-
Net loss after income tax for the half year		(1,244,305)	(1,028,942)
(Loss) attributable to members of CAP-XX Limited		(1,244,305)	(1,028,942)
L oss per share attributable to the ordinary equity holders of the company		Cents	Cents
Basic loss per share		(0.28)	(0.32)
Diluted loss per share		(0.28)	(0.32)

 

CAP-XX Limited

Consolidated statement of comprehensive income

For the half year ended 31 December 2020

		Consolidated
		2020	2019
Currency: Australian Dollars		$	$
Loss for the half year		(1,244,305)	(1,028,942)
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Exchange differences on translation of foreign operations		102,943	(13,919)
Other comprehensive loss for the half year, net of tax		102,943	(13,919)
Total comprehensive loss for the half year attributable to owners of CAP-XX Limited		(1,141,362)	(1,042,861)

CAP-XX Limited

Consolidated statement of financial position

As at 31 December 2020

			Consolidated
			31 December 2020	31 December 2019
Currency: Australian Dollars			$	$
ASSETS
Current assets
Cash and cash equivalents			469,472	1,751,424
Receivables			455,454	466,152
Inventories			1,041,169	1,503,159
Other			5,698,264	1,629,358
Total current assets			7,664,359	5,350,093
Non-current assets
Property, plant and equipment			2,624,744	1,110,317
Right of Use Assets			3,059,608	-
Other			204,808	236,507
Total non-current assets			5,889,160	1,346,824
TOTAL ASSETS			13,553,519	6,696,917
LIABILITIES
Current liabilities
Payables			1,489,078	546,399
Lease Liabilities			268,051	-
Advance payments - Current			1,442,900
Provisions			1,401,354	833,431
Total current liabilities			4,601,383	1,379,830
Non-current liabilities
Lease Liabilities			2,241,620
Provisions			53,332	41,738
Total non-currentliabilities			2,294,952	41,738
TOTAL LIABILITIES			6,896,335	1,421,568
NET ASSETS			6,657,184	5,275,349
EQUITY
Contributed equity			108,153,306	101,915,665
Reserves			6,461,120	6,192,848
Accumulated losses			(107,957,242)	(102,833,164)
TOTAL EQUITY			6,657,184	5,275,349

CAP-XX Limited

Consolidated statements of changes in equity

For the half-year ended 31 December 2020

	Consolidated
		Contributed Equity $	Reserve $	Accumulated losses $	Total $
Balance at 1 July 2019		101,915,665	6,032,993	(101,804,222)	6,144,436
Loss for the period as reported in the 2019 financial statements		-		(4,908,715)	(4,908,715)
Other comprehensive loss		-	(22,894)	-	(22,894)
Transactions with owners in their capacity as owners:
Contributions of equity, net of transaction costs and  tax		6,094,441			6,094,441
Employee share options ‑ value of employee services		-	279,886	-	279,886
Balance at 30 June 2020		108,010,106	6,289,985	(106,712,937)	7,587,154
Profit for the period as reported in the 2020 interim financial statements		-	-	(1,244,305)	(1,244,305)
Other comprehensive income		-	102,943	-	102,943
Transactions with owners in their capacity as owners:
Contributions of equity, net of transaction costs and tax		143,200	-	-	143,200
Employee share options ‑ value of employee services		-	68,192	-	68,192
Balance at 31 December 2020		108,153,306	6,461,120	(107,957,242)	6,657,184

 

CAP-XX Limited

Consolidated Statement of Cash Flows

For the half-year ended 31 December 2020

		Consolidated
		Half-year  2020	Half-year  2019
Currency: Australian Dollars		$	$
Cash flows from operating activities
Receipts from customers (inclusive of goods and services tax)		2,460,431	1,913,899
Payments to suppliers and employees (inclusive of goods and services tax)		(5,397,193)	(3,642,199)
		(2,936,762)	(1,728,300)
Tax credit received		-	1,592,042
Interest received		501	9,964
Net cash (outflow) from operating activities		(2,936,261)	(126,294)
Cash flows from investing activities
Payments for property, plant and equipment		(1,178,792)	(537,519)
Net cash (outflow) from investing activities		(1,178,792)	(537,519)
Cash flows from financing activities
Proceeds from issue of shares		143,200	-
Advance payments		1,442,900	-
Net cash inflow from financing activities		1,586,100	-
Net (decrease) in cash and cash equivalents		(2,528,953)	(663,813)
Cash and cash equivalents at the beginning of the half-year		2,895,482	2,429,156
Effects of exchange rate changes on cash and cash equivalents		102,943	(13,919)
Cash and cash equivalents at the end of the half-year		469,472	1,751,424

This general purpose interim financial report, for the half-year reporting period ended 31 December 2020, 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 2020, is unaudited.

-ENDS-

 

END

 

 

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