TIDMSND
RNS Number : 8683K
Sondrel (Holdings) plc
31 August 2023
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the UK Market Abuse Regulation
31 August 2023
Sondrel (Holdings) plc
("Sondrel", the "Company" and together with its subsidiaries the
"Group")
Trading Update and Notice of Results
Sondrel (AIM: SND), the fabless semiconductor business providing
turnkey services in the design and delivery of 'application
specific integrated circuits' ("ASICs") and 'system on chips'
("SoCs") for leading global technology brands, provides a further
update on trading ahead of the publication of the Company's interim
results for the six months ended 30 June 2023 ("H1 2023") on 21
September 2023.
During H1 2023 and immediately post period end, the Company
continued to deliver live ASIC projects in line with its
expectations and, as announced by Sondrel on 3 July 2023, the
Company successfully completed the second key milestone in respect
of the material turnkey ASIC engagement for a Tier 1 OEM Automotive
customer - with corresponding milestone payments received by the
Group from the customer. As stated at the time of the Company's
IPO, Sondrel expects typical production volumes for each contract
to deliver revenue of GBP10m to GBP100m per annum and the contract
with the Tier 1 OEM Automotive customer could deliver production
revenue at the upper end of this range.
As a result, the Company now expects to report H1 2023 unaudited
revenues of GBP9.3m, a 17% increase over the corresponding H1 2022
period (H1 2022: GBP8.0m) and adjusted EBITDA of GBP0.4m (H1 2022:
GBP0.1m).
Since the FY22 year end, the Group has been pleased by the
continued positive momentum in the US sales pipeline following the
Company's ongoing investment in the region, with significant
traction in the US market for Sondrel's proposition, the
establishment of an office in Santa Clara, California, and the
hiring of a team of experienced sales and engineering personnel in
the US. The US sales pipeline now includes more than 15 potential
customers, with the opportunities now under evaluation representing
design and prototype revenues exceeding $100m over 2 years
(excluding potential production related revenues). The Company
cautions that the opportunities in the US sales pipeline remain
uncontracted at this stage.
Furthermore, customer production volume forecasts for the
Group's live ASIC projects in Europe have increased by an aggregate
of 78%, from US$95m to US$170m. This, together with the progress
made in the US, provides the Company with confidence for FY24 and
beyond.
However, and notwithstanding increases in future production
volume forecasts by European customers as a result of ongoing
confidence in ASIC project end markets, it has also now been
confirmed that the chip development and production for three major
ASIC customers due to commence in H2 2023 have been delayed by
between six and twelve months as a result of increasing inflation
and weakening demand in end markets reliant on consumer spending as
other sector categories have moved into negative growth. Therefore,
their respective production dates, and earlier material design and
NPI related revenues that had previously been expected to be
delivered in FY23, have now been delayed until FY24. These
customers remain fully committed to working with Sondrel to advance
their chip designs into production and remain confident that they
will be very successful in their respective end markets.
As a result of these project delays, it is now expected that
FY23 full-year revenue will be not less than GBP13m, substantially
below current market expectations, with a corresponding impact on
FY23 losses.
Notwithstanding project delays by customers, the Group continues
to manage cash effectively and to take appropriate actions to
ensure it continues to be able to invest in the priority growth
areas, especially in the US and in the capabilities required for
successful production delivery. The Company is confident that it
has sufficient access to finance for the foreseeable future
following its October 2022 IPO.
Notice of Interim Results
The Company will announce its unaudited H1 2023 results on
Thursday, 21 September 2023. There will be an in-person
presentation for analysts at 9:30 a.m. (BST) on the day of the
announcement at Buchanan's offices at 107 Cheapside, London EC2V
6DN.
Graham Curren, Chief Executive Officer of Sondrel,
commented:
"Whilst it is disappointing that the scheduled production dates
for three of our upcoming ASIC projects have moved out, the
increased aggregate production volumes for live ASIC projects are
clearly positive for Sondrel and we are confident about our revenue
and profitability in 2024 and beyond.
"Our increasing traction in the important US market, strong
sales pipeline and positive ongoing relationships with our existing
ASIC customers provides us with great confidence in our medium-term
target to grow revenues to over GBP100m and we will ensure that we
keep updating shareholders as we make progress towards this
goal."
Sondrel (Holdings) plc Via Buchanan
Graham Curren, CEO Tel: +44 (0) 20 7466
5000
Joe Lopez, CFO
Cenkos Securities plc Tel: +44 (0)20 7397
8900
Ben Jeynes / Katy Birkin / George Lawson
- Corporate Finance
Michael Johnson - Sales
Buchanan Communications Tel: +44 (0) 20 7466
5000
Chris Lane sondrel@buchanan.uk.com
Stephanie Whitmore
Jack Devoy
Abby Gilchrist
About Sondrel
Sondrel is a UK-based fabless semiconductor company specialising
in high end, complex digital Application Specific Integrated
Circuits (ASICs) and System on Chips (SOCs). It provides a full
turnkey service in the design, prototyping, testing, packaging and
production of ASICs and SoCs.
The Company is one of only a few companies capable of designing
and supplying the higher-spec chips built on the most advanced
semiconductor technologies, selling into a range of hyper growth
end markets such as high-performance computing, automotive,
artificial intelligence, VR/AR, video analytics, image processing,
mobile networking and data centres. Sondrel designs have enabled
products by leading technology brands including Apple (iPhone),
Sony (PlayStation), Meta's (Oculus), Samsung, Google and Sony
smartphones, JVC (prosumer camcorders), Tesla and Mercedes-Benz
cars.
Sondrel is well-established, with a 20-year track record of
successful delivery, supported by long standing ecosystem
partnerships including Arm, TSMC and Samsung. Headquartered in the
UK, Sondrel has a global presence with offices in UK, USA, China,
India and Morocco.
For more information please visit: www.ir.sondrel.com .
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END
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August 31, 2023 02:00 ET (06:00 GMT)
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