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28 Dec 2023 14:52
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the UK Market Abuse Regulation
28 December 2023
Sondrel (Holdings) plc
("Sondrel", the "Company" and together with its subsidiaries the "Group")
Trading 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 the following trading update.
Although continued progress has been made with regard to the ASIC project with a Tier 1 automotive OEM, £1.7m of payments for the achievement of a significant milestone under the contract initially expected to be received in December 2023 have been subject to an unexpected delay and are now expected to be received during January and February 2024. This automotive contract will not now achieve the next milestone, being tape out, until late Q1 2024 and will require additional resource to complete, the funding for which is currently under discussion with the customer.
Significant new ASIC business opportunities are in final negotiation for project start in early 2024 and indications remain encouraging that European and US market demand for Sondrel's turnkey ASIC services is strong.
However, as a consequence of the above delay, the cash position of the Group has further declined during December 2023. The Company has been unable to meet December 2023 payroll in full and therefore the Company's Directors and senior management have agreed to defer their salaries and fees until such time as the delayed funds are received. The Company has asked certain employees to defer on the same basis, and is pleased that in excess of 67% of Group staff have agreed to full deferral, with a significant additional number agreeing to partial deferral.
With a view to managing Group liquidity, negotiations are underway with suppliers to improve the terms of existing supply arrangements. The Group 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. However, should the delayed payments not be received through January and February 2024, the Group will need to secure this funding in shorter order.
Graham Curren, Chief Executive Officer of Sondrel, commented:
"Whilst it is disappointing to see last minute hurdles introduced into the automotive project, it is encouraging that Sondrel's employees, suppliers and customers have continued to support the business during this difficult period.
"We remain encouraged by the positive development of key opportunities over Q4 2023 and we look forward to providing further updates on new ASIC business opportunities at advanced stages of negotiation in due course."
For further information:
Sondrel (Holdings) plc | Via Buchanan |
Graham Curren, CEO | Tel: +44 (0) 20 7466 5000 |
Nick Stone, Interim CFO | |
Cavendish Capital Markets Limited | Tel: +44 (0) 20 7220 0500 |
Ben Jeynes / Katy Birkin / George Lawson - Corporate Finance | |
Michael Johnson - Sales | |
Buchanan Communications | Tel: +44 (0) 20 7466 5000 |
Chris Lane Stephanie Whitmore | sondrel@buchanan.uk.com
|
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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