Trackwise Designs Releases Interim Results for H1 2022

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Trackwise Designs, a leading provider of specialist products using printed circuit technology, is pleased to announce its interim results for the six months ended 30 June 2022.

Financial highlights:

• Revenues of £3.8m (H1 2021: £4.1m)
• IHT revenues of £0.55m (H1 2021: £0.58m)
• Gross margin of 23.7% (H1 2021: 29.0%)
• Adjusted1 EBITDA of £0.83m (H1 2021: £0.45m)
• Adjusted2 operating profit of £0.09m (H1 2021: loss £0.13m)
• Reported loss after tax of £1.39m (H1 2021: loss £0.57m), after exceptional costs of £2.0m
• Net debt2 of £7.8m (cash of £2.4m) (31 December 2021: £2.1m, cash of £2.9m), following continued investment at the Stonehouse facility
• Basic EPS - loss per share of 3.73 pence (H1 2021: loss per share of 2.00 pence)

 Operational highlights:

• Completion of equity raise of £7m to support growth, as announced in December 2021
• Appointment of Paul Cook as Chief Financial Officer designate
• Continued progress made in preparing Stonehouse to become fully operational later in FY22
• Installed and commissioned Double Belt Press
• Completion of £5.2m asset finance
• IHT total customers and opportunities across target markets of 97 as at 30 June 2022
• Development of plans for Phase 2 of Stonehouse facility, in response to significant pipeline of demand for EV Cell Connection Systems (CCS) from UK and EU OEMs and Tier 1s. 

Philip Johnston, CEO of Trackwise, commented:

"The development of our third manufacturing site at Stonehouse continues, and we expect to see this completed in 2022 to meet production demand from our EV OEM customer.

"It is inevitable that our performance is closely linked to that of our first IHT production customer and the EV OEM announced on 11 August 2022 that it expects lower production volumes in 2022 compared to previous estimates. As we announced earlier this month, the announcement of the lower production volumes has had a knock-on impact on the availability, to the Company, of the planned asset-backed debt funding for the remaining pieces of capital expenditure at the new Stonehouse facility and, in addition, increases the Company's short-term cash requirements. Discussions with the EV OEM are progressing towards agreeing a new contractual arrangement whereby the EV OEM will provide an advance payment against future product deliveries, and such advance payment is expected to be backed by security.

"The wider impact of the lower production volumes is that additional funding will be required and the Company is reviewing a number of options for additional funding with its advisers and will provide further updates in due course.

"In addition, the Company is exploring longer term strategic investment partnerships in order to support development and conversion of the very significant pipeline of identified IHT sales opportunities, notably for EV battery cell connection systems ("CCS") for UK and EU OEMs, Tier 1 suppliers, and also for other Medical and Aerospace sales opportunities."