Saietta Group PLC (AIM:SED) said its core business in light-duty eDrives for electric vehicles (EV) is continuing to develop “at a greater scale and faster pace” than it originally envisaged, with the supply chain now ready for its joint venture in India.
With engineering design services purchase orders of £986,000 received so far from its first vehicle manufacturer – as part of December’s commercial agreement with Padmini VNA (PVNA) – revenues in the current year to end-March are expected to grow 40% on the previous year.
With the balance of the £3.2mln of the Indian development agreements being receivable in the year to March 2024, the AIM-listed company said the outlook for next year indicates further growth of “at least 100%” and positive EBITDA.
With a balance of roughly £11mln cash in the bank, the company said it is also now confident of being “in position to fully finance the coming financial year (2023/24) without recourse for further external fundraising by removing excess costs, reviewing all key relationships and focussing on the delivery of major revenue streams flowing from late summer”.
Following December’s PVNA agreement, Saietta said technical collaboration agreements are in place with top-tier companies in the region for the key components, including the gearbox and power electronics.
The current financial year will incorporate an “important change” in the joint financing of the Indian joint venture, Saietta VNA, as the UK company has committed to completely fund some key components within the eDrive system as these are key intellectual property components where it wants to maintain ownership “so as not to limit future potential”, saying it expects the components to be supplied to the joint venture directly from Saietta-owned facilities in India.
With site selection and capital equipment ordering underway for the Saietta VNA assembly facility in India, with completion targeted for August, the pair are confident of receiving first formal purchase orders later in the first half of 2023, “which would formally contract the client to the commencement of commercial production targeted for September 2023”.
Executive chairman Tony Gott said: “Meeting current customer demands for volume mass production in Q3 2023 in order to allow the associated vehicle platforms to be launched in Q1 2024 has become an absolute priority for the group.
“While the board is confident that it has the technical and financial resources to meet this goal it is also cognisant that it remains a challenging task and has resolved to make all necessary refinements to its strategy to ensure its achievement without recourse for further external fundraising.”
Chief executive Vic Kist has proposed to refocus primarily on strategic business development, particularly the Netherlands-based marine division, Propel, where commercial agreements were reached in the past year but delays in the supply of components have hit sales prospects, with no material marine sales expected for the 2023 boating season.
In the UK, fit-out of Saietta's technical centre at Silverstone is almost complete and by the end of March 2023 most staff will be moved from Upper Heyford.
Initial pilot production has moved to Sunderland with early sample motors said to be starting to head to Europe, the US, the India joint venture and Propel, with machinery for volume manufacturing of the core motor components now on site and more equipment "on track" for delivery in late summer.