Source - LSE Regulatory
RNS Number : 9954R
CAP-XX Limited
06 March 2019
 

 

Dissemination of a Regulatory Announcement that contains inside information according to REGULATION (EU) No 596/2014 (MAR).

 

 

 

6 March 2019

 

 

CAP-XX Limited

("CAP-XX" or the "Company")

 

Interim Results for the half-year ended 31 December 2018

 

 

CAP-XX Limited, a world leader in the design and manufacture of thin, flat supercapacitors and energy management systems, is pleased to announce its interim results for the half-year ended 31 December 2018.

 

Key highlights

 

·      Total Sales Revenue of A$1.6 million (2017: A$1.5million) up 4%

·      Increased like for like gross margin of 54.1% (2017: 49.1%) due to realisation of the Company's previously announced manufacturing initiatives*

·      Continuing improvement in EBITDA performance.  EBITDA loss reduced to A$1.0 million (2017: loss A$1.4 million)**

·      TDK licence arrangement completed in October 2018. Ongoing licencing negotiations with numerous other international parties are at varying stages

·      Sales pipeline for prismatic and cylindrical can supercapacitors are at historically high levels. The Company is reviewing options for additional production capacity. In the short term, due to worldwide economic uncertainties, the timing of when certain significant pipeline projects may move to the mass production stage remains unclear

·      Product development initiatives remain on track, particularly for the 3 Volt product

·      5% reduction in year on year overhead expenses of A$2.8 million (2017: A$3.0 million), excluding share based payments expense

·      Cash reserves as at 31 December 2018 were A$4.6 million (2017: A$1.5 million) which includes the proceeds of the equity subscription in November 2018 (£1.75 million) and the R&D Tax Rebate of A$1.6 million

* Current period Gross Margin result and prior period comparative Gross Margin results have been adjusted to reflect changes in the accounting policy for Gross Margin as set out in Note 2.

** EBITDA excludes amortisation of employee share options.

 

Anthony Kongats, CEO of CAP-XX said:

"Significant milestones for CAP-XX were delivered over the six months to 31 December 2018. The benefits from previously highlighted manufacturing initiatives are being realised, with a significant improvement in reported gross margins. The ongoing growth in the pipeline of major new sales projects has given the Board the confidence to start examining options for expanding production capacity. The TDK licence agreement has been signed and good progress has been made towards the completion of several other licence arrangements. Development of future product releases, especially the 3V product, remains on schedule."

 

Electronic copies of CAP-XX's interim results for the half-year ended 31 December 2018 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 Company's performance for the six months ended 31 December 2018 has delivered some material steps towards the achievement of the organisation's short to medium-term goals. The six months ended 31 December 2018 can be characterised by: gross margin improvement due to the full realisation of process and production initiatives that have been highlighted in previous reports (and notwithstanding the changes in accounting policies described below); royalties from the TDK licence arrangement beginning to be received; and healthy cash reserves due to the proceeds from an equity subscription and the R&D Tax rebate being received. Additionally, the historically high sales pipeline augurs well for long-term sales growth prospects.

 

In order to represent more accurately the Gross Margin being delivered by the sale of CAP-XX's goods and services,  adjustments have been made in the statements of profit or loss and financial position to transfer the impact of both expenditure on eligible research and development activities and work in progress production from the cost of sale of goods and services to operating expenditure and work in progress inventory respectively. This adjustment has been made in both the current period and the comparative period presented below, to ensure that a like for like comparison remains in place. Further details regarding this adjustment can be found in Note 2 below. 

 

The sales pipeline for both prismatic and the recently released cylindrical can supercapacitors are at historically high levels and covers several key market segments, including Automotive, Healthcare, Industrial and Tracking. These opportunities are at various stages of the sales process, but provide the Board and management with confidence in CAP-XX's medium to longer-term sales revenue prospects. To this end, the Board has asked the Company to look at options to increase its manufacturing capacity, including both internal and external manufacturing process options.

 

In the short-term, the degree of current worldwide economic uncertainty may result in some delays as to when certain of the identified projects within the pipeline may proceed to mass production. Projects are not being cancelled, but are at risk of slippage in terms of the timing of when initial orders were expected to be received. This is a common finding when negotiating with third-parties in the electronic components industry. It is too early to determine the effect that any such timing slippage may have on the results for the second half of the current financial year. 

 

Total revenue for the six months to 31 December 2018 was A$1.6 million (2017: A$1.5 million). Product sales were up on the previous year by 5%. Royalty and licencing revenue were flat when compared to the previous year.

 

For the six-month operating period ended 31 December 2018, the EBITDA loss of A$1.0 million (2017: EBITDA loss of A$1.4 million), which excludes the amortisation of the share based payment expense, improved A$0.4 million or 32% from the previous year. Cash reserves as at 31 December 2018 were A$4.6 million (2017: A$1.5 million), benefiting from the proceeds of the equity subscription in November 2018 (£1.75 million) as well as the receipt of A$1.6 million (2017: A$1.6 million) from a R&D Tax Rebate in the same month.  

 

The Board was pleased to finalise the TDK licencing arrangements in October 2018 and the initial payments from this agreement have been received over the last six months. There are still several other material licensing agreements being negotiated with several worldwide potential licencees, although given that these licencing discussions are all at differing stages of completion, the Board is reluctant to state publicly when they are likely to be completed.  However, it should be stressed that the successful completion of licencing negotiations remains a key short-term objective for the CAP-XX management team.  The CAP-XX research and development team are on track for the delivery of their product development road map, with no major obstacles being encountered. This is especially the case for the development of the 3V product which remains on track for release later in 2019.

 

The Board remains confident that the Company is starting to make material progress towards the achievement of its long-term goal of achieving a cash break-even position as soon as possible.

 

In terms of the outcome for the full year ending 30 June 2019, although the Company's long-term sales pipeline is healthy, CAP-XX's immediate concern is the short term sales revenue position, and the Board intends to provide a trading update in respect of the second half of the 2019 financial year before the end of April 2019, once all relevant customer visits are completed and their short term order positions are better understood.

 

 

Patrick Elliott

Chairman

 

 

  

 

 

CAP-XX Limited

Consolidated statement of profit or loss

For the half-year ended 31 December 2018

 

 

Consolidated

 

 

 

Half-year 2018

Half-year 2017

 

 

 

 

Currency: Australian Dollars

 

$

$

 

 

 

 

Revenue from sale of goods and services

 

1,603,484

1,544,554

Cost of sale of goods and services

 

(735,147)

(787,318)

Gross margin (loss) on sale of goods and services

 

868,337

757,236

 

 

 

 

Other revenue

 

9,519

24,446

Other income

 

884,211

720,000

 

 

 

 

General and administrative expenses

 

(1,067,995)

(924,762)

Process and engineering expenses

 

(552,131)

(839,603)

Selling and marketing expenses

 

(339,220)

(358,159)

Research and development expenses

Share based payments

 

(809,812)

(567,813)

(781,754)

(152,789)

Other expenses

 

(41,468)

(67,994)

(Loss) before income tax

 

(1,616,372)

(1,623,379)

 

 

 

 

Income tax benefit/(expense)

 

-

-

Net loss after income tax for the half year

 

(1,616,372)

(1,623,379)

 

 

 

 

(Loss) attributable to members of CAP-XX Limited

 

(1,616,372)

(1,623,379)

 

 

 

 

Loss per share attributable to the ordinary equity holders of the company

 

Cents

Cents

Basic loss per share

 

(0.52)

(0.54)

Diluted loss per share

 

(0.52)

(0.54)

         

 

 

 

 

CAP-XX Limited

Consolidated statement of comprehensive income

For the half year ended 31 December 2018

 

 

 

Consolidated

 

 

 

 

 

 

 

 

2018

2017

 

Currency: Australian Dollars

 

$

$

 

Loss for the half year

 

(1,616,372)

(1,623,379)

 

Other comprehensive income

 

 

 

 

Items that may be reclassified subsequently to profit or loss

 

 

 

 

 

 

Exchange differences on translation of foreign operations

 

(38,496)

2,411

 

Other comprehensive loss for the half year, net of tax

 

            (38,496)

                2,411

 

Total comprehensive loss for the half year attributable to owners of CAP-XX Limited

 

      (1,654,868)

      (1,620,968)

 

 

 

 

 

CAP-XX Limited

Consolidated statement of financial position

As at 31 December 2018

 

 

 

 

     Consolidated

 

 

 

31 December 2018

30 June 2018

31 December 2017

 

 

 

 

 

 

 

 

Currency: Australian Dollars

 

 

$

$

$

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

Cash and cash equivalents

 

 

4,623,238

1,911,346

1,514,463

 

Receivables

 

 

327,296

823,090

264,839

 

Inventories

 

 

1,814,766

1,404,205

1,668,446

 

Other

Note 1

 

921,106

1,784,384

2,430,706

 

Total current assets

 

 

7,686,406

5,923,025

5,878,454

 

 

 

 

 

 

 

 

Non-current assets

 

 

 

 

 

 

Property, plant and equipment

 

 

590,138

572,949

420,745

 

Other

 

 

236,507

236,507

236,507

 

Total non-current assets

 

 

826,645

809,456

657,252

 

 

 

 

 

 

 

 

TOTAL ASSETS

 

 

8,513,051

6,732,481

6,535,706

 

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

Payables

 

 

835,112

1,144,289

1,047,310

 

Provisions

 

 

734,425

760,491

708,167

 

Total current liabilities

 

 

1,569,537

1,904,780

1,755,477

 

 

 

 

 

 

 

 

Non-current liabilities

 

 

 

 

 

 

Provisions

 

 

125,018

41,296

86,240

 

Total non-current liabilities

 

 

125,018

41,296

86,240

 

 

 

 

 

 

 

 

TOTAL LIABILITIES

 

 

1,694,555

1,946,076

1,841,717

 

 

 

 

 

 

 

 

NET ASSETS

 

 

7,001,795

4,786,405

4,693,989

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EQUITY

 

 

 

 

 

 

Contributed equity

 

 

101,867,507

98,565,062

98,389,390

 

Reserves

 

 

5,741,487

5,212,170

4,480,173

 

Accumulated losses

 

 

(100,607,199)

(98,990,827)

(98,175,574)

 

TOTAL EQUITY

 

 

7,001,795

4,786,405

4,693,989

 

 

 

 

 

 

CAP-XX Limited

Consolidated statements of changes in equity

For the half-year ended 31 December 2018

 

Consolidated

 

 

 

 

Contributed

Equity

$

Reserve

$

Accumulated losses

$

Total

$

 

 

 

 

 

 

Balance at 1 July 2017

 

98,343,719

4,324,973

(96,552,195)

6,116,497

Loss for the period as reported in the 2016 financial statements

 

              

   (2,438,632)

(2,438,632)

 

Other comprehensive loss 

 

- 

               (33,031)

   -

 

(33,031)

Transactions with owners in their capacity as owners:

 

 

 

 

 

Contributions of equity, net of transaction costs and  tax

 

221,343

 

 

221,343

Employee share options ‑ value of employee services

 

 

-

920,228

-

920,228

 

 

 

 

 

 

Balance at 30 June 2018

 

98,565,062

5,212,170

 (98,990,827)

 4,786,405

 

Profit for the period as reported in the 2017 interim financial statements

 

- 

               -

   (1,616,372)

(1,616,372)

Other comprehensive income 

 

- 

               (38,496)

   -

 

(38,496)

Transactions with owners in their capacity as owners:

 

 

 

 

Contributions of equity, net of transaction costs and tax

 

 3,302,445

 - 

 - 

3,302,445

Employee share options ‑ value of employee services

 

-

567,813

-

567,813

 

 

 

 

 

 

Balance at 31 December 2018

 

101,867,507

5,741,487

 (100,607,199)

7,001,795

 

 

 

 

 

 

 

 

 

 

 

 

           

CAP-XX Limited

Consolidated Statement of Cash Flows

For the half-year ended 31 December 2018

 

 

Consolidated

 

 

Half-year        2018

Half-year

2017

 

 

 

 

Currency: Australian Dollars

 

$

$

 

 

 

 

Cash flows from operating activities

 

 

 

Receipts from customers (inclusive of goods and services tax)

 

2,259,627

1,853,316

Payments to suppliers and employees (inclusive of goods and services tax)

 

(4,303,597)

(4,163,655)

 

 

(2,043,970)

(2,310,339)

Tax credit received

 

1,596,547

-

Interest received

 

9,519

24,446

Net cash (outflow) from operating activities

 

(437,904)

(2,285,893)

 

 

 

 

Cash flows from investing activities

 

 

 

Payments for property, plant and equipment

 

(114,153)

(129,518)

Net cash (outflow) from investing activities

 

(114,153)

(129,518)

 

 

 

 

Cash flows from financing activities

 

 

 

Proceeds from issue of shares

 

3,302,445

45,671

Net cash inflow from financing activities

 

3,302,445

45,671

 

 

 

 

Net (decrease) in cash and cash equivalents

 

2,750,388

(2,369,740)

Cash and cash equivalents at the beginning of the half-year

 

1,911,346

3,881,792

Effects of exchange rate changes on cash and cash equivalents

 

(38,496)

2,411

Cash and cash equivalents at the end of the half-year

 

 

4,623,238

1,514,463

 

 

 

 

 

 

 

 

This general purpose interim financial report, for the half-year reporting period ended 31 December 2018, has been prepared in accordance with Australian equivalents to International Financial Reporting Standards (AIFRSs), other authoritative pronouncements of the Australian Accounting Standards Board, Urgent Issues Group Interpretations and the Corporations Act 2001. This general purpose interim financial report, for the half-year reporting period ended 31 December 2018, is unaudited.

 

 

 

Note 1 - Other Assets

Currency: Australian Dollars

                     Consolidated

                                                                                                                                2018                                            2017

          $                                              $

 

R&D Rebate - Australian Tax Office (FY17)                                                                -                                       1,551,489

R&D Rebate - Australian Tax Office (FY18)                                                      751,000                                        720,000

Royalty Payments - Accrual                                                                                80,320                                           90,000

Prepayments                                                                                                       78,959                                           58,390

Other                                                                                                                   10,827                                           10,827

                                                                                                          

Total Other Assets                                                                                          921,106                                      2,430,706

 

 

 

 

Note 2    Restatement of comparatives

 

In order to reflect accurately the delivered gross margin, an adjustment has been made to the value of cost of goods and services. This adjustment is necessary to value the expenditure associated with the cost of sale of goods and services in order to accurately record the Gross Margin generated from the sale of CAP-XX's goods and services. Having revisited the gross margin calculation, it has been found that the value of cost of goods and services has been overstated, which has principally included materials, inventory being understated and process and engineering expenses being understated. This is due to the adjustments required in the valuation of work in progress inventory and the reclassification of feedstock expenditure associated with eligible research and development expenditure. This error has been corrected and is reflected in the relevant balances recorded at 31 December 2018 and for the comparative period.

 

 

Extracts, being only those line items affected, are disclosed below:

 

Consolidated Statement of profit or loss of the earlier comparative period - 30 June 2018

Currency: Australian Dollars

 

Consolidated

 

 

2018

 

 

 

2018

Extract

 

Original basis of calculation

 

Adjustment

 

Restated

 

 

$

 

       $

 

  $

Expenses

 

 

 

 

 

 

Cost of sale of goods and services

 

(2,704,077)

 

738,155

 

         (1,965,922)

Process and engineering expenses

 

(1,213,190)

 

 (554,856)

 

    (1,768,046)

 

 

Loss before income tax

 

       

(2,621,931)

 

183,299

 

(2,438,632)

 

 

 

 

 

 

 

Income tax benefit

 

-

 

-

 

-

 

 

 

 

 

 

 

 

Net loss for the period

 

(2,621,931)

 

183,299

 

(2,438,632)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss attributable to the owners of CAP-XX Limited

 

(2,621,931)

 

183,299

 

(2,438,632)

 

 

 

 

 

 

 

 

 

Consolidated Statement of comprehensive income

 

 

Consolidated

Currency: Australian Dollars

 

2018

 

 

 

2018

Extract

 

Original basis of calculation

 

Adjustment

 

Restated

 

 

$

 

       $

 

 $

Loss for the period

 

 

(2,621,931)

 

183,299

 

(2,438,632)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total comprehensive income for the period attributable to owners of CAP-XX Limited

 

(2,621,931)

 

183,299

 

(2,438,632)

 

 

 

 

 

 

 

 

  

Consolidated Statement of financial position at the beginning of the earlier comparative period - 30 June 2018       

 

 

Consolidated

Extract

   31/12/2018

    Original basis of calculation

Adjustment

31/12/2017

Restated

Current assets

$

        $

   $

 

Inventories

1,220,906

183,299

1,404,205

Total current assets

5,739,726

183,299

5,923,025

 

     

TOTAL ASSETS

 

6,549,182

183,299

6,732,481

 

     

Net assets

4,603,106

183,299

4,786,405

 

 

 

 

Equity

 

 

 

Accumulated losses

(99,174,126)

183,299

 

(98,990,827)

 

 

TOTAL EQUITY

 

4,603,106

 

183,299

 

 4,786,405

 

 

 

Extracts, being only those line items affected, are disclosed below:

Consolidated Statement of profit or loss of the earliest comparative period - 31 December 2017

 

Consolidated Statement of profit or loss

Currency: Australian Dollars

 

Consolidated

 

 

2017

 

 

 

2017

Extract

 

Reported

 

Adjustment

 

Restated

 

 

$

 

       $

 

  $

Expenses

 

 

 

 

 

 

Cost of sale of goods and services

 

(1,123,455)

 

336,137

 

         (787,318)

Process and engineering expenses

 

(569,997)

 

 (269,606)

 

    (839,603)

 

 

Loss before income tax

 

       

(1,689,910)

 

66,531

 

(1,623,379)

 

 

 

 

 

 

 

Income tax benefit

 

-

 

-

 

-

 

 

 

 

 

 

 

 

Net loss for the period

 

(1,689,910)

 

66,531

 

(1,623,379)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss attributable to the owners of CAP-XX Limited

 

(1,689,910)

 

66,531

 

(1,623,379)

 

 

 

 

 

 

 

 

Consolidated Statement of comprehensive income

 

 

Consolidated

 

 

2017

 

 

 

2017

Extract

 

Reported

 

Adjustment

 

Restated

 

 

$

 

       $

 

 $

Loss for the period

 

 

(1,689,910)

 

66,531

 

(1,623,379)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total comprehensive income for the period attributable to owners of CAP-XX Limited

 

(1,687,499)

 

66,531

 

(1,620,968)

 

 

 

 

 

 

 

  

 

Consolidated Statement of financial position at the beginning of the earliest comparative period - 31 December 2017           

 

 

Consolidated

Extract

   31/12/2017

    Reported

Adjustment

31/12/2017

Restated

Current assets

$

        $

   $

 

Inventories

1,601,915

66,531

1,668,446

Total current assets

5,811,923

66,531

5,878,454

 

 

 

 

 

TOTAL ASSETS

 

6,469,175

66,531

6,535,706

 

 

 

 

Net assets

4,627,458

66,531

4,693,989

 

 

 

 

 

Equity

 

 

 

Accumulated losses

(98,242,105)

66,531

 

(98,175,574)

 

 

TOTAL EQUITY

 

4,627,458

 

66,531

 

 4,693,989

 

 

-ENDS-


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
 
END
 
 
IR EAKDKEFDNEEF
Find out how to deal online from £1.50 in a SIPP, ISA or Dealing account.