Trackwise defers results amid customer delays

30th Jun 2023 15:36

(Sharecast News) - Printed circuit specialist Trackwise Designs said in an update on Friday that, due to the intensive demands on its management team and the need to address the impact of the existing UK electric vehicle original equipment manufacturer (EV OEM) customer, the completion of its 2022 audit had been delayed.

The AIM-traded firm said that as a result, the report was now expected to be published in July.

In compliance with the AIM rules, trading in its shares would be suspended from 0730 BST on 3 July until the publication of the annual report.

Regarding customer contracts, Trackwise announced on 30 March that there would be a delay in the manufacturing and delivery of a fixed quantity of flexible printed circuit boards, referred to as the 'parts', to the EV OEM.

The delay arose as the EV OEM undertook a redesign and validation process to meet revised design requirements.

Trackwise said the necessary change control procedures had been initiated, including discussions on the impact of the parts' price and production completion.

However, the EV OEM had been deemed to be in material breach of its commercial order, as it had failed to engage in good faith to conclude the change control process.

Despite that, Trackwise said it remained committed to reaching an agreement with the EV OEM.

The delay caused by the EV OEM's redesign also affected the planned increase in working capital associated with the start of production.

As a result, Trackwise said its cash runway was expected to extend at least into July.

Additionally, the company said it was awaiting news on a major electric vehicle cell-to-pack programme with OEM B, where it was a potential supplier.

Price negotiations had concluded, and an announcement on supplier nomination was expected soon, and once nominated, Trackwise said it would review its funding options.

Trackwise said it had a significant pipeline of identified sales opportunities for its Improved Harness Technology (IHT) products, including several opportunities in the electric vehicle cell-to-pack sector progressing towards tier-1 supplier nomination.

In addition to the OEM B opportunity, the firm said it had received a request for quotation (RFQ) from a tier-1 customer nominated to OEM C.

Bids for tier-2 supplier nomination were expected to be submitted in July, with the announcement of the nomination anticipated by the end of August.

In other positive news, Trackwise said it had secured a six-figure purchase order from a US aerospace original equipment manufacturer (OEM) for qualification test samples.

"Subject to audit, the company expects to report full year revenues of £7.52m, and an adjusted operating loss of approximately £2.95m," the company said in its update.

"The loss before taxation is expected to be £7.74m.

"Net debt at 31 December 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."

At 1455 BST, shares in Trackwise Designs were down 51.25% at 0.2p.

Reporting by Josh White for Sharecast.com.