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18 Apr 2023 07:00
18 April 2023
Strip Tinning Holdings plc
("Strip Tinning" or the "Company")
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 for Q1.
The Board confirms that trading in the first quarter of the financial year ending 31 December 2023 has been in line with the Board's expectations with revenues for Q1 of £2.9m (£2.6m Q1 FY22) and adjusted EBITDA positive throughout the quarter. This represents a significant turn-around from the losses of 2022, deriving primarily from increased gross margins which result from new price increases coming into effect on 1 January 2023 and improved productivity.
Encouragingly, the European automotive market has started the year strongly, with ACEA reporting that overall production grew by 11.4%[1] in January and February, which is considerably higher than the earlier consensus industry forecasts of 2% growth. Production of EV and Hybrid vehicles, where Strip Tinning is expecting to make over 30% of its FY23 sales, has grown faster at 23.0%. This strong market position is reflected in the Company's 2023 order book which is strengthening and in its growing new nominations pipeline which should primarily benefit sales in FY2024 and beyond.
The 2023 sales outlook has benefitted from the recently confirmed new £775k order from the Company's leading EV customer for a large number of sample cell contact system modules. As a result the Company anticipates receiving C-sample orders in the second half of 2023.
The latest order for EV Cell Contact Systems will be manufactured on the new EV production line which has been completed as planned. Over £2m has now been invested in this line, supported by the £1.4m grant we secured from the Advanced Propulsion Centre ("APC") Scale-up Readiness Validation ("SuRV") programme.
Based on the progress demonstrated in the first quarter and the positive market outlook, partially off-set by the previously announced negative sales volume impact that result from the price increases, the Board is pleased to confirm that it is on track to meet full year market expectations.(2)
Richard Barton, Group Chief Executive Officer of Strip Tinning, commented:
"It is pleasing to see the increased momentum across the Company. The steps we have taken to mitigate the impact of recent external factors now leave us in a stronger position to capitalise on the return towards normalisation in the automotive sector. Our offering is closely aligned with this growth, particularly the considerable increases in EV production."
"Whilst we continue to remain highly vigilant of the macro-economic environment, we have started 2023 in line with expectations and the outlook for the remainder of the year is promising. We will continue to deliver against our strategy and we are increasingly confident of a year of progress."
(1) https://www.acea.auto/pc-registrations/passenger-car-registrations-11-5-in-february-battery-electric-12-1-market-share/
(2) 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)
Enquiries:
Strip Tinning Holdings plc Via Alma PR
Richard Barton, Chief Executive Officer
Adam Le Van, Chief Financial Officer
Singer Capital Markets (Nominated Adviser and Sole Broker) +44 (0) 20 7496 3000
Rick Thompson
James Fischer
Alma PR (Financial PR) striptinning@almapr.co.uk
Josh Royston +44 (0) 20 3405 0205
Joe Pederzolli
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