TIDMCPX
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 (GBP1.75 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 (GBP1.75
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 (809,812) (781,754)
Share based payments (567,813) (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 Cents Cents
the ordinary equity holders of
the company
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 30 June 2018 31 December
2018 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
Note
Other 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 Accumulated
Equity Reserve 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
Half-year 2018 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
Original
basis of
Extract 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
Original
basis of
Extract 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 Adjustment 31/12/2017
Original Restated
basis of
calculation
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 Adjustment 31/12/2017
Reported 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-
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END
IR EAKDKEFDNEEF
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