30 Jun 2023 07:00
30 June 2023
TRACKWISE DESIGNS PLC
("Trackwise", the "Company" or the "Group")
Delay of Results and Trading Update
Trackwise Designs plc (AIM: TWD), a leading manufacturer of specialist products using printed circuit technology, provides the following update in relation to its annual report and financial statements for its financial year ended 31 December 2022 (the "2022 Annual Report"). The Company also provides an update on FY22 trading, progress with the existing UK EV OEM customer (the "EV OEM"), and the OEM Pipeline.
In accordance with Rule 19 of the AIM Rules for Companies, the Company is required to publish its 2022 Annual Report by 30 June 2023. However, due to intense demands upon the entire management team in dealing both with the impact of the EV OEM (see below) and working to secure new business, there has been a delay in completion of the audit process. As a result, the Company now expects to publish the 2022 Annual Report during July 2023. Accordingly, trading in the Company's ordinary shares on AIM will be suspended with effect from 7.30 a.m. on 3 July 2023 pending publication of the 2022 Annual Report.
Contract Update and Pipeline
On 30 March 2023, the Company announced that it expected a delay in the manufacture and deliveries of a fixed quantity of flexible printed circuit boards (the Parts to the EV OEM), whilst the EV OEM undertakes a redesign and validation of the Parts to meet their revised design requirements. The Change Control procedure within the Commercial Order was initiated, including the impact upon the Parts price and production completion, with a Change Control Note ("CCN") issued to the EV OEM on 19 April 2023. The Company has reiterated to the EV OEM that it is in material breach of the Commercial Order as they have failed to engage with the Company in good faith to conclude the CCN. The Company has repeated its message to the EV OEM that it remains committed to agreeing the CCN in good faith.
The delay caused by the EV OEM means that the planned increase in working capital associated with start of production has been delayed. The Company's cash runway is expected to extend at least into July 2023. The Company's potential new production customer (a Tier 1) is expected to learn if it has achieved supplier nomination* shortly on a major EV cell-to-pack ("CCS") program with OEM B. A final round of price negotiations has taken place with OEM B, and the Company has been informed that an announcement on a supplier nomination* may be made in the very immediate future. Upon nomination the Company will immediately review its funding options.
Trackwise continues to have a significant pipeline of identified IHT sales opportunities with a number of EV CCS opportunities progressing towards Tier 1 supplier nomination. Of note and in addition to the OEM B opportunity detailed above, an RFQ, from an already-nominated Tier 1 to OEM C, has been received by the Company, with bids to be submitted in July 2023 for Tier 2 supplier nomination expected by the end of August 2023.
The Company is pleased to announce that it has received this week a six figure Purchase Order from a US Aerospace OEM, for qualification test samples.
FY22 Trading Update
Subject to audit, the Company expects to report full year revenues of £7.52m (2021: £8.01m), and an adjusted** operating loss of approximately £2.95m (2021: loss of £0.58m). The loss before taxation is expected to be £7.74m (2021: loss of £1.98m).
Net debt*** at 31 December 2022 was £9.34m prior to the receipt of the placing, subscription and open offer net proceeds of the equity fundraise which completed in the 2023 financial year of approximately £4.75m (before expenses).
* A supplier nomination achieved by a Tier 1 supplier and potential Trackwise production customer is a key step in the process towards the Company working with the Tier 1 to achieve Tier 2 supplier nomination and then subsequently enter into a Tier 2 supply contract.
** Before exceptional costs: impairment of goodwill of £104,000, new facility set up costs of £2.845m, and additional production and set up costs of £1.307m.
*** Cash less borrowings, excluding IFRS16 right of use lease liabilities.
The financial information for 2022 included in this announcement is unaudited.
Enquiries
Trackwise Designs plc | +44 (0)1684 299 930 |
Philip Johnston, CEO | www.trackwise.co.uk |
Paul Cook, CFO
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finnCap Ltd | +44 (0)20 7220 0500 |
NOMAD and Broker | |
Ed Frisby/Fergus Sullivan - Corporate Finance Andrew Burdis/Barney Hayward - ECM
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Alma PR | +44 (0)20 3405 0205 |
Financial PR and IR | |
David Ison/Kieran Breheny/Pippa Crabtree |
Notes to editors
Trackwise is a UK-based, King's Award winning, 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 harnesses in a variety of industries.
The Company operates from three sites, located in Tewkesbury, Stonehouse and Stevenage. It serves customers in Europe and North America.
Trackwise Designs plc was admitted to trading on AIM in 2018 with the ticker TWD. For additional information please visit www.trackwise.co.uk.
The information contained within this announcement is deemed to constitute inside information as stipulated under the retained EU law version of the Market Abuse Regulation (EU) No. 596/2014 (the "UK MAR") which is part of UK law by virtue of the European Union (Withdrawal) Act 2018. The information is disclosed in accordance with the Company's obligations under Article 17 of the UK MAR. Upon the publication of this announcement, this inside information is now considered to be in the public domain.