TIDMCPX
RNS Number : 9990S
CAP-XX Limited
09 October 2017
Dissemination of a Regulatory Announcement that contains inside
information according to REGULATION (EU) No 596/2014 (MAR).
9 October 2017
CAP-XX Limited
("CAP-XX" the "Company")
Audited results for the year ended 30 June 2017
CAP-XX Limited, a world leader in the design and manufacture of
thin, flat supercapacitors and energy management systems, is
pleased to announce its audited results for the year ended 30 June
2017.
Key highlights
-- Sales revenue of A$4.1 million (2016: A$5.0 million) and
EBITDA loss of A$1.2 million (2016: A$0.7 million) in line with
guidance announced on 7 June 2017
-- Royalty revenue of A$0.7 million (2016: A$0.2 million) up
177%. Q4 Murata royalty up over 50% on prior quarter, following
major new product launches during the year. Introduction of
additional product ranges by AVX during the year
-- Operating expenses reduced by A$0.5 million year-on-year,
with R&D and engineering spending maintained and additional
R&D and Engineering staff added
-- The Board believes that the Company's IP and patent portfolio
is in its strongest position ever
-- New licensing deals are under negotiation and the Board
expects at least some of these to successfully close in the current
financial year and remains confident that CAP-XX will continue to
drive further increases in royalty receipts
-- Sales enquiries for prismatic supercapacitors, including
Thinline, are at record levels. The first large volume design win
for our Thinline product range, in a wearable application for the
Internet of Things (IoT) market segment, was announced in August
2017
-- Several additional large IoT design wins have already been
secured and high-volume orders are expected in the current
financial year
-- Three large automotive opportunities are under development,
including applications for passenger vehicles and heavy
vehicles
-- Three new custom designed automotive systems delivered to customers for evaluation
-- In negotiations with potential manufacturing partners to
secure the necessary production capacity to fulfill these
automotive opportunities
-- A full range of CAP-XX cylindrical cell supercapacitors was
launched in the year. Market interest is high, with potential
customers currently evaluating CAP-XX products for large volume
applications
-- The Company raised GBP2.43 million in January 2017. Cash
reserves at the end of June 2017 were A$3.9 million (2016: A$0.3
million) with an additional A$1.5 million Australian R&D tax
rebate (2016: A$1.5 million) anticipated to be received during
October 2017
Anthony Kongats, CEO of CAP-XX said:
"This has been an exciting year in the development of CAP-XX. We
are seeing tangible traction in our target markets, as evidenced by
the level of enquiries and size of initial orders. The strong
performance of our licences is a further affirmation of this trend,
reflected in the sharp growth in royalty receipts. We continue to
invest in product development, adding to our portfolio of IP and
are receiving an unprecedented level of enquiries from potential
licensees. This traction together with our own operating
performance gives us great confidence that CAP-XX will be at the
forefront of the rising trend for the adoption of supercapacitors
as a mainstream source of portable energy storage."
Electronic copies of CAP-XX's audited annual report and accounts
for the year ended 30 June 2017 will shortly be available from the
Company's website: www.cap-xx.com.
For further information contact:
CAP-XX Limited
Anthony Kongats (Chief Executive Officer) +61 (0) 2 9428 0139
Kreab (Financial PR)
Robert Speed +44 (0) 20 7074 1800
Allenby Capital (Nominated Adviser and Broker
David Hart / Alex Brearley +44 (0) 20 3328 5656
More information is available at www.cap-xx.com
Notes to Editors:
CAP-XX (LSE: CPX) is a world leader in the design and
manufacture of thin, flat supercapacitors and energy management
systems used in portable and small-scale electronic devices, and to
an increasing extent, in larger applications such as automotive and
renewable energy. The unique feature of CAP-XX supercapacitors is
their very high power density and high energy storage capacity in a
space-efficient prismatic package. These attributes are essential
in power-hungry consumer and industrial electronics, and deliver
similar benefits in automotive and other transportation
applications. For more information about CAP-XX, visit
www.cap-xx.com
Chairman's statement
The twelve months under review has seen good progress towards the
delivery of the Company's long-term growth strategy, with large
volume design wins and an increased interest in the CAP-XX product
range for the Internet of Things (IoT) market segment. Revenues
from royalties are continuing to increase with contributions from
both AVX and Murata, whilst licensing opportunities, especially
in the automotive sector, continue to gather momentum. The Company
has several opportunities in different stages of discussion and
negotiation. The operational initiatives to streamline and increase
CAP-XX's manufacturing capabilities continue to deliver positive
results.
The operating result for the year to June 2017 was a loss of A$1.7
million (2016: loss of A$1.3 million). Cash reserves as at the end
of June 2017, were A$3.9 million which was up from A$0.3 million
as at in 30 June 2016, as a result of the capital raising that was
completed in January 2017 (GBP2.43 million). The Federal Government
R&D tax rebate is expected to be approximately A$1,551,000 (2016:
A$1,537,000) with funds expected to be received during October 2017.
The available tax rebate for the year ended 30 June 2017 has decreased
from 45% of eligible R&D spending in Australia to 43.5%. Given the
anticipated increase in product sales, license and royalty payments
and the decrease in the overall cash burn, the Board remains confident
that the Company's existing cash reserves will be adequate to satisfy
the Company's short to medium cash requirements and to accelerate
product and business development opportunities.
Total sales revenue for the year to 30 June 2017 was A$4.1 million
(2016: A$5.0 million). Product sales were down on the previous year,
principally due to the non-operation of our manufacturing plant
for a period of seven weeks towards the end of the first half of
the year, due to a raw material supply issue. This issue was rapidly
resolved and the plant had returned to normal operations by the
end of the third quarter of the financial year.
Interest in CAP-XX's small product range is sharply on the increase.
The IoT market is the major market which has generated significant
interest in the CAP-XX small prismatic products. In August 2017,
the Company announced its first high volume design win in this market
and the Board is excited by the quality, number and volume of sales
opportunities. An additional point to highlight is that these opportunities
are not concentrated from one particular customer or market segment,
although, the overall level of interest emanating from the wearable,
health, automotive, security, metering and energy harvesting segments
is on the increase. The newly released cylindrical cells have enabled
CAP-XX to provide a full product range offering, and has assisted
with cross-selling opportunities. Customers are currently evaluating
our cylindrical cans for large volume opportunities.
The Board is very encouraged by the progress of the Company's automotive
offering over the last twelve months. During the year the truckStart
product was further improved and evaluation units of three new automotive
modules were delivered to customers. The pipeline of sales opportunities
is at the limit of our capacity to evaluate and the potential volumes
that would be required far exceed our current capacity. Our strategy
remains to partner with an automotive Tier-1 or Tier-2 manufacturer
for customer interface, production and sales, but as announced on
7 June 2017, progress has been slower than initially expected. Worldwide
interest still remains strong, with notable opportunities gaining
momentum in Europe, the Americas and Asia. These are the markets
that are demonstrating the most interest in the CAP-XX large cell
technology that serves automotive, truck and military applications.
Product development and manufacturing refinement has continued to
ensure that the CAP-XX offering meets the customers' expectations.
Internal projects have also been implemented as individual end-customer's
requirements are quite specific. CAP-XX was successful in being
awarded the Society of Automotive Engineers- Australasia's, 2016
platinum award for overall engineering excellence for an automotive
project.
AVX commenced quarterly royalty payments on 1 July 2016 as per its
license agreement and also paid the first anniversary Licensee fee
of GBP750,000 in June 2017. Regular discussions and negotiations
have been on-going with AVX, in order to determine market priorities
and how CAP-XX and AVX can collaborate in order to build upon existing
market penetration and co-operate to enhance both companies' offerings.
AVX has been extremely active in the supercapacitor market and has
launched two new product families during the past financial year.
Murata continues to go from strength to strength. Since April 2016,
when Murata and CAP-XX agreed to extend and broaden the existing
license agreement, the royalty payments from Murata have continued
to grow, notably in the past six months. The most recent quarterly
royalty payment received from Murata in August 2017, which was for
the April - June 2017 sales period, was up 51% on the previous quarterly
royalty payment and up 81% relative to the same period of the previous
year.
It is pleasing to note that overall operational expenditure has
decreased from A$5.8 million in the previous year to A$5.3 million
in the year ended 30 June 2017, given the Board's commitment to
continuous improvement in product development and manufacturing
excellence. The Company has taken the decision to strengthen its
operations team in order to accelerate improvements in manufacturing,
including new products; cycle time; capacity; production efficiency
and unit cost of manufacturing. Early signs are promising, however,
the full benefit will be realised in the year ending 30 June 2018.
Expenditure on general corporate overheads has been tightened from
the previous year. Expenditure associated with R&D activities has
again increased year-on-year with A$3.6 million being incurred,
which is up from A$3.4 million in the previous year. A new website
has been launched, which received good customer reviews and an on-line
web store was also opened with good results.
Our major R&D focus over the past twelve months has been to concentrate
on improving the current product's operating performance and the
development of new products. As a result, new intellectual property
has been developed with associated patents being filed, which further
strengthens the existing CAP-XX patent portfolio. Opportunities
for collaborative research grants and joint ventures have been executed
and others are currently being considered.
The Board are buoyed by the progress made over the past twelve months
and remain confident of the Company's continuing success.
Patrick Elliott
Chairman
Business Review
Review of Operations and Activities
The royalties from Murata are continuing to grow, with the latest
quarterly royalty payment received in August 2017 being 51% higher
than the previous quarter and up 81% on the same quarter from the
previous year. The Board is confident that the Murata royalties
will continue to increase over the next twelve months, especially
with the broadening of the Murata license which was agreed to in
April 2016. In the past twelve months, AVX also commenced quarterly
royalty payments and paid their first anniversary licence payment.
This progress with royalties is a further endorsement of our strategy
to develop substantial and recurring income from our intellectual
property, along with income from sales of small supercapacitors,
large supercapacitors and energy storage modules incorporating our
supercapacitor cells. Several other licence agreements are being
negotiated.
During the year, CAP-XX continued to invest significant resources
in redesigning products and processes to reduce manufacturing costs,
to improve product performance and introduce new products. Further,
an investment in operational headcount was made to strengthen the
current team and to accelerate key projects. We expect that the
majority of the benefits from this will be realised in the 2018
financial year.
Business Environment
The Board believes that CAP-XX's technology provides a competitive
advantage over other supercapacitor manufacturers, such as Maxwell
Technologies, Ioxus, Nippon Chemicon Corporation and other Chinese
and Korean competitors. The Directors further believe that other
manufacturers are unable to match the CAP-XX technology for thinness,
power density, energy density and reliability. Many competitors
manufacture higher-capacity, large package devices and focus on
applications where the combination of thinness, energy density and
power density is not an issue. In the future, as new products are
introduced by CAP-XX, the Company will offer other very significant
points of difference with its competition.
As reported last year, Internet of Things (IoT) applications, one
of the fastest growing segments of the electronics market, provide
one of the greatest opportunities for CAP-XX's products. Driven
by customer requests, manufacturers are constantly adding to the
functions and applications available on IoT-enabled devices. This
means that power management continues to be an increasingly important
consideration. The other important factor is size, as devices have
become smaller whilst their electrical power demands have increased.
The Company was successful in winning new business from a range
of markets, including our first high volume order for a wearable
technology product utilising our Thinline product.
Historically, CAP-XX has faced competition in various markets from
cheaper cylindrical supercapacitors where our thin form factor,
high power and long life are not valued as highly as lower initial
cost. To counter-act this, the Company released a range of cylindrical
cells. To date, several large volume opportunities are being evaluated
by existing customers that are currently utilising cheaper cylindrical
cells. In addition, our customers' markets are constantly evolving
as new products and technologies threaten the incumbents. In this
environment CAP-XX needs to always remain flexible to changing business
conditions.
Automotive applications such as truckStart, Stop-Start systems,
regenerative energy capture or KERS (Kinetic Energy Recovery Systems),
distributed power, hybrid electric vehicles and electric vehicles
also present very attractive opportunities for supercapacitors.
A number of CAP-XX's competitors are active in these markets, but
the Board believes that we have significant advantages over the
competition in certain applications upon which CAP-XX has focused
its efforts. During the year, numerous automotive OEMs and automotive
Tier-1/Tier-2 suppliers have purchased CAP-XX's products for evaluation;
however because of the significant resources that each project requires,
we have taken the decision to focus our resources on just a small
number of key automotive projects. Progress during the year with
these projects has been very pleasing. Three new automotive products
were designed to the customer's specifications, manufactured, tested
and evaluation units were delivered to customers including all the
necessary electronic circuitry. These products include a 48V system
to work with lithium ion batteries in hybrid vehicles; a 12v system
for stop-start; vehicle acceleration and regenerative braking; and
a 12V system for stop-start and support for the vehicle electronics.
However, as previously highlighted, automotive markets have historically
been slow to adopt new technology and this still remains a risk
today. The Company has also recently commenced two projects involving
the development of large supercapacitors for automotive defence
applications.
Opportunities
CAP-XX is continuing to refine the products that it offers for the
IoT, portable electronics and other markets for our traditional
small supercapacitors and our Thinline supercapacitors. The Thinline
range of supercapacitors, which are just 0.6mm thick, were developed
to address the space-constrained needs of the IoT and during the
year we achieved our first design win for a large volume Thinline
wearable product. The Company is actively dealing with many other
similar applications, where the feedback has been very positive
and the potential sales opportunities are very large. All of these
markets are forecast to be very high volume opportunities.
As already noted, CAP-XX is concentrating on a small number of automotive
opportunities for passenger vehicles and heavy vehicles. To further
increase our likelihood of success, CAP-XX is looking to partner
with Automotive Tier-1/Tier-2 suppliers through either a new licence
agreement or a joint venture to supply the automotive markets. The
Board believes that such partnerships will be beneficial for all
parties involved.
We expect royalty sales from Murata and AVX to continue to grow
significantly in the coming years, as more consumer applications
adopt supercapacitor technology.
A significant additional benefit of the Murata and AVX licencing
agreements is that they validate CAP-XX's technology leadership
in the field of supercapacitors and energy storage, and the potential
for supercapacitors as a mainstream consumer electronics technology.
The Murata and AVX product line and sales activities are also increasing
our exposure to markets and customers that were previously beyond
our reach. Association with Murata and AVX is also helping CAP-XX
gain recognition, win acceptance for our supercapacitors, and reduce
misconceptions about the price and performance of supercapacitors.
It is also important that Murata's and AVX's strategy is to offer
product ranges targeted at certain end markets. As such, Murata
and AVX will not meet the product type or size requirements of all
markets and all applications, leaving room for CAP-XX to supply
these markets directly using products made by its contract manufacturers.
Strategies for Growth
The Company is exploring opportunities in several new markets to
leverage its strong intellectual property and engineering expertise
through new license agreements, joint ventures and collaborative
R&D partnerships. Given the increasing levels of market interest
in CAP-XX's technology and our high performance supercapacitors,
the Company believes that the IoT and automotive markets in particular
offer significant opportunities for growth.
The Company continues to engage in discussions aimed at securing
business with a number of global OEMs. We are strengthening relationships
with these organisations and have regular engineering meetings with
their design teams and manufacturing groups or contract manufacturers.
We are unable to comment on specific clients, but are pleased with
overall progress and are confident that the available market for
supercapacitors is increasing as manufacturers become familiar with
the technology.
The Company will continue to monitor new opportunities to increase
the product offering, both through the current distributors and
direct to customers. These offerings may take the form of complementary
energy storage devices and modules.
Research and Development
CAP-XX's R&D efforts are focused on a mix of short, medium and long-term
opportunities, covering further cost reductions and improved product
performance. CAP-XX has a research facility in Sydney, Australia,
where a team of 19 engineers and scientists work to maintain CAP-XX's
leading technology position in electrodes, separators and electrolyte
materials and their assembly into supercapacitor devices. During
the year significant progress was made in a number of key areas
including: increasing the peak voltage of our supercapacitor cells;
reducing the resistance of our cells; improving the life of our
cells; reducing the cost per cell and developing new electronics
to optimise the performance of our modules. We have also signed
numerous collaboration agreements with several leading Research
and Aerospace institutions, whilst our Scientific Advisory Board
provides the Company with clear direction on commercially relevant
technologies for our ongoing R&D programme.
The markets in which the Company operates are competitive and are
characterised by rapid technological change. CAP-XX has a strong
competitive position in prismatic supercapacitors for all of its
target markets, with its capability to produce supercapacitors with
a high energy density and power density in a small conveniently
sized flat package. CAP-XX's devices are also lightweight, work
over a broad temperature range and have an operating lifetime measured
in years.
The Company's success depends on its ability to protect and prevent
any infringements of its intellectual property. To protect this
important asset, the Company has considerable intellectual property
embodied in its patents covering the design, manufacture and use
of its high performance supercapacitors. The CAP-XX patent portfolio
currently consists of 18 patent families with 45 granted national
patents with an additional 12 applications pending in various jurisdictions.
The Company's intellectual property strategy has been to build company
value by focusing on opportunities to capture market share and exclude
competition with an IP portfolio capable of generating licensing
revenue. The Directors believe that comprehensive embodiments and
interlocking patent groups, combined with a 'quick to file, quick
to abandon' policy, have given the Company a strong and focused
IP portfolio.
Outlook
The major short-term focus for CAP-XX is to drive the adoption of
the Company's intellectual property and products, both large and
small, into key target markets through future licence deals; joint
ventures and direct product sales. Although much has been achieved
in the past, the Company expects to see additional progress over
the next twelve months and beyond.
CAP-XX Limited
Statement of profit or loss
For the year ended 30 June 2017
Consolidated
2017 2016
Currency: Australian Dollars Notes $ $
Revenue from continuing operations 1 4,142,119 4,965,448
Cost of sales 2 (2,233,555) (2,359,612)
------------ -------------
Gross Profit 1,908,564 2,605,836
Other revenue 1 30,009 25,597
Other income 3 1,682,364 1,867,444
General and administrative
expenses (2,068,557) (2,589,480)
Process and engineering expenses (863,307) (885,418)
Selling and marketing expenses (713,429) (664,239)
Research and development expenses (1,511,271) (1,548,300)
Other expenses 4 (128,622) (103,692)
------------ -------------
Loss before income tax (1,664,249) (1,292,252)
------------ -------------
Income tax benefit - -
Net loss for the year (1,664,249) (1,292,252)
------------ -------------
Loss attributable to owners
of CAP-XX Limited (1,664,249) (1,292,252)
============ =============
Earnings per share for loss
attributable to the ordinary
equity holders of the Company Cents Cents
Basic loss per share 5 (0.6) (0.5)
Diluted loss per share 5 (0.6) (0.5)
CAP-XX Limited
Statement of comprehensive income
For the year ended 30 June 2017
Consolidated
2017 2016
Currency: Australian Dollars Notes $ $
Loss for the year (1,664,249) (1,292,252)
Other comprehensive income
Items that may be reclassified
subsequently to profit or loss
Exchange differences on translation
of foreign operations 6,551 (45,042)
Other comprehensive loss for
the year, net of tax 6,551 (45,042)
Total comprehensive loss for
the year attributable to owners
of CAP-XX Limited (1,657,698) (1,337,294)
CAP-XX Limited
Statement of financial position
As at 30 June 2017
Consolidated
June 30, 2017 June 30, 2016
Currency: Australian Dollars Notes $ $
ASSETS
Current assets
Cash and cash equivalents 3,881,792 331,631
Receivables 419,146 2,078,941
Inventories 1,321,327 1,365,524
Other 1,676,618 1,700,147
--------------- -----------------
Total current assets 7,298,883 5,476,243
--------------- -----------------
Non-current assets
Property, plant and equipment 369,779 364,695
Other 236,507 236,507
--------------- -----------------
Total non-current assets 606,286 601,202
--------------- -----------------
Total assets 7,905,169 6,077,445
--------------- -----------------
LIABILITIES
Current liabilities
Payables 1,013,954 642,358
Provisions 682,962 663,069
Secured Loans - 1,000,000
Total current liabilities 1,696,916 2,305,427
--------------- -----------------
Non-current liabilities
Provisions 91,756 65,664
-----------------
Total non-current liabilities 91,756 65,664
--------------- -----------------
Total liabilities 1,788,672 2,371,091
--------------- -----------------
Net assets 6,116,497 3,706,354
=============== =================
EQUITY
Contributed equity 98,343,719 94,558,726
Reserves 4,324,973 4,035,574
Accumulated losses (96,552,195) (94,887,946)
-----------------
TOTAL EQUITY 6,116,497 3,706,354
=============== =================
Statement of cash flows
For the year ended 30 June 2017
Consolidated
2017 2016
Currency: Australian Dollars $ $
Cash flows from operating activities
Receipts from customers (inclusive
of goods and services tax) 6,574,124 4,167,729
Payments to suppliers and employees
(inclusive of goods and services
tax) (7,221,745) (8,466,934)
----------- -----------
(647,621) (4,299,205)
Tax credit received 1,546,175 1,127,272
Interest received 30,009 25,597
----------- -----------
Net cash (outflow) from operating
activities 928,563 (3,146,336)
=========== ===========
Cash flows from investing activities
Payments for property, plant
and equipment (169,946) (252,788)
Net cash (outflow) from investing
activities (169,946) (252,788)
=========== ===========
Cash flows from financing activities
Proceeds from issue of shares
(net of costs) 3,784,993 132,379
Proceeds from Loan (1,000,000) 1,000,000
Net cash inflow from financing
activities 2,784,993 1,132,379
=========== ===========
Net increase/(decrease) in
cash and cash equivalents 3,543,610 (2,266,745)
Cash and cash equivalents at
the beginning of the financial
year 331,631 2,643,418
Effects of exchange rate changes
on cash and cash equivalents 6,551 (45,042)
----------- -----------
Cash and cash equivalents at
the end of the financial year 3,881,792 331,631
=========== ===========
Notes to the financial statements
Basis of preparation
The financial information included in this announcement does not
constitute statutory accounts within the meaning of the Australian
Corporations Act 2001. Whilst the financial information has been
computed in accordance with Australian equivalents to International
Financial Reporting standards, other authoritative pronouncements
of the Australian Accounting Standards Board, Urgent Issues Group
Interpretations and the Corporations Act 2001, this announcement
does not itself contain sufficient information to comply with those
requirements.
Note 1 Revenue Consolidated
2017 2016
$ $
Sales revenue
Sale of goods & services 4,142,119 4,965,448
4,142,119 4,965,448
--------- ---------
Other revenue
Interest 30,009 25,597
--------- ---------
30,009 25,597
--------- ---------
Note 2 Cost of Sale of Goods Consolidated
2017 2016
$ $
Direct materials and labour 1,732,747 1,913,692
Indirect manufacturing expenses 500,808 445,920
--------- ---------
2,233,555 2,359,612
--------- ---------
Note 3 Other income Consolidated
2017 2016
$ $
Foreign Exchange Gains - (net) 130,482 17,907
R&D Tax Incentive 1,551,483 1,537,925
Make Good provision - 249,856
Miscellaneous Income 399 61,756
----------------------------------- ----------
1,682,364 1,867,444
----------------------------------- ----------
Note 4 Other Expenses Consolidated
2017 2016
$ $
Provision for Withholding
Tax Diminution 91,277 108,159
Provision for credit notes
/ doubtful debts (16,762) 5,527
Provision for make good on
premises 5,527 91,277
Provision for returns and
rework - (9,119)
Interest Expense 48,580 22,706
128,622 103,692
---------------- --------------
Note 5 Loss per share Consolidated
2017 2016
$ $
Net loss (1,664,249) (1,292,252)
Loss per share - undiluted ($0.006) ($0.005)
Weighted Average Share on
Issue during the year 282,084,311 269,048,064
-Ends-
This information is provided by RNS
The company news service from the London Stock Exchange
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