Positive messages in the results - Part 110 Jun 2025 21:03
The customer base has been hugely supportive, and the business has shown incredible resolve
Since the year end, operational efficiency and consistency has seen a continued improvement, driven by equipment upgrades, improved processes, and the impact of operational support from customers.
In parallel, we have expanded our quality and operations teams and invested in the development of senior management to support the evolving demands of the business. Again, customer operational support post November 2024 has been pivotal to the improvement we are now realising. A key focus for the Board this year has been investing in our people, with a particular emphasis on leadership development through external support.
Strategic discussions on commercial agreements specifying multi- year volumes and prices as well as customer manufacturing support, received through prepayments (£11.9m at 31 May 2025) are well advanced.
The Board expects 2025 financial performance to reflect continued growth, as production capacity and yield rise as a result of improvements made throughout the organisation. The issues (previously reported) of inconsistent yield in Q1-25 continues to be addressed with resultant improvements in Q2-25.
We are starting to see sustainable improvements in output, yield and quality that gives us a degree of confidence that 2025 will be a much better year. While there remains a lot still to do we are encouraged that a pivotal change has occurred.
This reflects the Group's transition to newer technologies and the associated replacement of older generation equipment.
Management has taken proactive steps to address these challenges. Several successful upgrades to the manufacturing process were implemented during the year, with further improvements and the involvement of external technical expertise continuing into 2025. These initiatives are expected to materially reduce scrappage rates and enhance overall efficiency
Furthermore, as an exporter primarily to the US, the Company is mindful of the varying trade and tariff environment. Having established Incoterms transferring title for goods at UK dispatch with the majority of its customers, the Company believes the impacts will be more macro in terms of overall price pressures rather than directly within the supply chain.
They have also noted that, since the balance sheet date, the Company has made significant progress in the above areas on price and volumes and tangible unit cost reductions when compared to 2024.
The full-year 2025 outlook remains aligned with Management's base case expectations of revenue and EBIT as well as the achievement of cash positive monthly flows by the second half of the year.
Revenue growth in 2025 is high due to the impact of one major OEM, whilst succeeding years are modelled only modestly, effectively growing the existing base.
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