Saietta Group plc (LON:SED), the electric vehicle drivetrain specialist, has provided a trading update ahead of its Annual General Meeting to be held at 10.00 a.m. on Tuesday, 26 September 2023.
The Company is concluding the preparation of the annual report and accounts for the 12 months ended 31 March 2023 which have been delayed to allow time to conduct the impact assessment for impairment of intangible assets arising from the discontinuance of Retromotion activities, the revised contractual arrangements with Consolidated Metco Inc and the suspension of marine product commercialisation. The annual report and accounts will therefore be released after the AGM with a target date of 29 September.
Financial Update Year to 31 March 2023 (unaudited):
· Turnover (Sales and Grant Income) increased 40% to £6.0m* (2022: £4.3m).
· Gross profit increased 35% to £2.3m* (2022: £1.7m).
· Adjusted EBITDA loss of £9.9m* (2022: loss of £4.4m) which excludes exceptional losses from the discontinued activities of £6.4m.
· Statutory Loss before Tax of £23.8 million* (2022: £11.3m) accounting for all write downs and discontinued activities.
· Cash as at 31 March 2023 period end of £7.3m (2022: £18.4m) and at end of August 2023 of £1.2m which, combined with additional sums receivable from key customers and JV partners, the Board is confident that this provides the Company with sufficient funding to meet its current requirements for its focused AFT eDrive production plan.
Operational Highlights:
· Strategic adjustment to narrow near-term focus on immediate revenue generating opportunities in the rapidly expanding global lightweight electric vehicle (EV) sector with a particular focus on India and Asia.
· Expansion of the product portfolio from a stand-alone axial flux technology (AFT) motor at IPO (July 2021) to a complete proprietary eDrive consisting of an AFT motor with integrated electronic controller in the same housing, modular transmission, mechanical axle and vehicle control unit (VCU).
· The AFT eDrive is in series production at Saietta’s UK manufacturing hub in Sunderland for North American and European customers and the initial launch customer is AYRO Inc, an American company, which placed an order for 3,000 eDrives as announced on 3 April 2023.
· Production of the AFT eDrive has this month commenced in Delhi, India at Saietta VNA’s (Saietta’s Joint Venture in India with Padmini VNA) all new 33,000 sq-ft factory.
· In the heavy goods vehicle (HGV) sector, Saietta restructured the contractual arrangements with their North American client ConMet in August 2023, which resulted in an upfront payment to Saietta of €3.3 million, potential additional future license payments to Saietta of up to €20 million, and the transfer of the relevant project team in the Netherlands to ConMet which reduced Saietta’s annual operating costs by approximately €2 million. Going forward, Saietta has no further costs for the development or production of the ConMet products. Saietta’s Heavy-Duty eDrive division has moved to Saietta’s Global Technical Centre in Silverstone, UK and the Company remains free to develop any eDrive products for trucks and buses apart from the ConMet in-wheel products for truck hubs.
· In the marine sector, Saietta engineered and successfully completed proof of concept for complete inboard and outboard motor products powered by Saietta’s AFT motors for the leisure marine sector. The Saietta Board believes that both products will be highly successful but recognises the strategic imperative to focus time and resources on the lightweight EV market where the commercial opportunities are bigger, nearer and more certain. The Propel operations in the Netherlands were therefore suspended and the operation moved to Saietta’s Global Technical Centre in Silverstone, UK, reducing the annual operating expenses by approximately £1.2m. Saietta is now actively engaged in discussion with two potential partners for the Marine business for an arrangement to take-on the industrialisation and commercialisation of the Propel products for which Saietta will seek technology transfer fees and ongoing royalties on product sales.
Outlook
· Led by immediate customer requirements, Saietta is undergoing a transformational shift from a multi-segment product development company to a focused eDrive manufacturing business. The Board expects to be able to announce production contracts and specific developments in this regard over the coming weeks.
· The Company will provide a full shareholder update following the publication of the accounts for the period to 31 March 2023.
Anthony Gott, Executive Chair of Saietta Group, commented:
“Saietta has reached the point of inflection as we expect to go into series production at our manufacturing plants in Sunderland, UK and at our all-new facility in Delhi, India. We are focused very heavily on our core target market of lightweight electric vehicles (LEVs) which offers the biggest, nearest and most certain commercial opportunities. We have therefore restructured our operations in the heavy-duty eDrive and marine divisions, reducing expenditure and allowing all resources and management time to be allocated into products for LEVs I see strong evidence that Saietta is placed to succeed in securing a large market segment and generate meaningful long term recurring revenue streams. This achievement has only been possible due to the combination of our team’s world class innovation with cutting edge production and quality standards. I look forward to updating shareholders further once we have published our report and accounts”
*Numbers remain subject to formal audit sign off and therefore could be subject to change
