Shares in Strip Tinning Holdings PLC (AIM:STG) tanked after the supplier of specialist connectors to the automotive sector said it was notified that its contract with a Croation electric vehicle technology innovator will be terminated from 1 October.
The contract, signed by its subsidiary Strip Tinning Limited (STL) in December 2021, is for the supply of cell management systems to a leading German original equipment manufacturer (OEM), the company said in a statement.
The five-year contract is worth €2mln a year to STL.
Strip Tinning said although the loss of the contract will not materially impact on market expectations for this year, the customer had indicated that volumes were likely to be increased by 33% over the life of the project. STL had adjusted plans with capital equipment suppliers to accommodate the volume increase.
STL is in dialogue with the customer to better understand the reasons behind their decision. To date, it has met all the milestone deliverables under the contract, Strip Tinning said.
It said STL would be prefer to continue working with the customer and is in early discussions about the possibility of working together in the future whilst fully reserving its legal position.
Based on continued demand for its EV cell management system technology, the company will continue to invest in scaling up production capability to meet firm customer orders, it added.
Shares fell 26.28% to 71.88p in midmorning trade.