Trading Update

RNS Number : 8266G

Trackwise Designs PLC

29 July 2021

 

TRACKWISE DESIGNS PLC

("Trackwise", the "Company" or the "Group")

Trading Update

Trackwise Designs (AIM: TWD), a leading provider of specialist products using printed circuit technology, is pleased to provide an update on trading for the six months ended 30 June 2021.

For the first half, the Company expects to report:

· Revenues up 71% to £4.1 million (H1 2020: £2.4 million)

· IHT revenues up 130% to £0.58 million (H1 2020: £0.25 million)

· Gross margin of 29% (H1 2020: 17.8%), significantly improved by performance from IHT

· Adjusted¹ EBITDA up 349% to £0.45 million (H1 2020: £0.10 million)

· Adjusted¹ operating loss of £0.12 million (H1 2020: £0.37 million)

· Reported loss after tax of £0.23 million (H1 2020: profit £0.92 million²)

· Net cash³ at 30 June 2021 of £2.6 million (£4.0 million gross of borrowings) (31 December 2020 net cash: £13.8 million), following investment at new Stonehouse site, and mortgage finance expected to follow shortly

Operational Highlights:

· Appointment of Chief Operating Officer

· Acquisition of new site at Stonehouse Gloucestershire

·   Good progress on Stonehouse capital investment programme for the new high-volume, low mix, roll to roll IHT production facility

The Group performed well in the first half of the year as a result of increased demand, as well as a full six-month contribution of revenues in the Advanced PCB division from SCL. Revenue growth continues to be restrained by the impacts of Covid on the supply of raw materials, and the effects of Brexit on our continental business at APCB; however, we are seeing some signs of these effects abating. H2 trading and outlook is in line with current market expectations.

IHT - Electric vehicles

IHT revenues, the key growth area for Trackwise, have resumed a growth pattern in 2021, with IHT revenues for the first half of 2021 expected to be 95% of those for the whole of 2020 and are expected to be at record levels for full year 2021. Interest in IHT for electric vehicles continues to grow and we are now in early-stage sample manufacture with a number of companies working on both passenger and commercial vehicles.

IHT - Other target markets

IHT development products have been delivered in the first half of 2021 to a range of customers across our chosen verticals of medical and aerospace as well as for industrial. This included development products for a first customer for aerospace battery packs. Our IHT products have been well-received and the pipeline of revenue opportunities across these markets continues to grow. In May we announced a multi-year agreement with the Stockholm-based medical device technology company CathPrint AB, paving the way for a potential longer-term ramp up in volume.

IHT - New production facility

In March we appointed Steve Hudson as COO to lead the delivery of our new site at Stonehouse, which will house the high-volume, low mix, roll to roll IHT production facility. Good progress is being made with the aim of being productive in time for the revised ramp-up date provided by the Company's EV OEM customer as announced last month in the agreement extension announcement.

Stonehouse site development finance

In April the Group purchased the Stonehouse site and the Company expects to shortly be in receipt of new funds as it is now well progressed in the process of agreeing mortgage financing with its bank on this freehold site. At 30 June 2021 the Company had net cash³ of £2.6 million, gross cash of £4.0 million and unused facilities of up to £0.75 million.

Advanced PCBs

The APCB division has had a solid first half despite the impacts of Covid, with revenues c.6% ahead of H2 2020. The division continues to be cash generative and has a growing order book, with plans to add a second shift this year to accommodate growth seen recently and anticipated in future.

Philip Johnston, CEO of Trackwise, commented:  

"We are pleased with progress in H1 2021. Our belief has consistently been that battery management is an ideal use case for flex PCBs and this confidence is borne out by quickly growing opportunities. We are confident that the Stonehouse installation is the right investment at the right time to deliver these opportunities."

The Company expects to announce its interim results for the six months to 30 June 2021 in the second half of September 2021.

¹ Before share based payments; and in addition in the prior year before acquisition expenses, excluding a negative goodwill (credit) arising on the acquisition of SCL and excluding a small FX gain.

² Prior year included the benefit of a £1.6 million negative goodwill (credit) arising on the acquisition of SCL.

³ Cash less borrowings, excluding IFRS16 right of use lease liabilities.

The financial information included in this announcement is unaudited.

Enquiries:

Trackwise Designs plc	[phone]
Philip Johnston, CEO	www.trackwise.co.uk
Mark Hodgkins, CFO
finnCap Ltd	[phone]
NOMAD and Broker
Ed Frisby / Tim Harper - Corporate Finance
Andrew Burdis / Barney Hayward - ECM
Alma PR	[phone]
Financial PR and IR
David Ison / Caroline Forde / Josh Royston / Kieran Breheny

Notes to editors:

Trackwise is a UK-based manufacturer of specialist products using printed circuit technology.

The full suite includes: Improved Harness Technology™ ("IHT") and Advanced PCBs - Microwave and Radio Frequency ("RF"), Short Flex, Flex Rigid and Rigid Multilayer products.

IHT uses a proprietary, patented process that Trackwise has developed to manufacture multilayer flexible printed circuits of unlimited length. While the technology has many applications, the directors expect that one of its primary uses will be to replace traditional wire harness in a variety of industries.

The Company manufactures on two sites, located in Tewkesbury and Stevenage (following the acquisition of Stevenage Circuits Ltd in April 2020). It serves customers in Europe and North America. The Company has acquired a third site in Stonehouse Gloucestershire initially for its EV programme.

Trackwise Designs plc was admitted to trading on AIM in 2018 with the ticker TWD. For additional information please visit www.trackwise.co.uk

 

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