Sondrel Holdings PLC on Thursday said it has been unable to meet its December payroll due to a delay in payment from an automotive manufacturer.

Shares in Sondrel were down 32% at 5.50 pence each in London on Thursday afternoon.

The Reading, England-based semiconductor design services provider expected a payment of £1.7 million from the unnamed ‘Tier 1 automotive original equipment manufacturer’ in December. The payment was in relation to a contract for application-specific integrated circuits.

However, an unexpected delay has pushed this payment back to between January and February 2024, Sondrel said. This will delay the automotive contract until late in the first quarter of 2024 and require additional resources to complete, the funding for which Sondrel is currently discussing with the customer.

The group said: ‘As a consequence of the above delay, the cash position of the group has further declined during December 2023. The company has been unable to meet December 2023 payroll in full and therefore the company’s directors and senior management have agreed to defer their salaries and fees until such time as the delayed funds are received.’

Chief Executive Officer Graham Curren said: ‘Whilst it is disappointing to see last minute hurdles introduced into the automotive project, it is encouraging that Sondrel’s employees, suppliers and customers have continued to support the business during this difficult period.

‘We remain encouraged by the positive development of key opportunities over Q4 2023 and we look forward to providing further updates on new ASIC business opportunities at advanced stages of negotiation in due course.’

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