Saietta trading update reveals the abundance of opportunity
What to do, when there is an abundance of opportunity?
This is the nice position that Saietta Electric Drive finds itself after over-delivering on its commercialisation strategy.
The answer for this leading eDrive developer is to focus more on the enormous growth potential of its existing interests in the US ‘eTruck/bus’ (re CONMET) and Indian Light Duty markets (re 2-3 wheeler JV). Rather than pursue smaller, discreet electric motor contracts.
The logic being to not only significantly increase the value & profit margin of the company's products, but also enable a swifter integration to OEM vehicle platforms. Especially important at a time when the global transport industry is rapidly transitioning to EVs, due to the need to decarbonise & decouple from Russian oil & gas.
Timeline to Launch
First road trials of the CONMET/Saietta Electric Drive eDrive solution is expected to start in 2023. Thus, allowing truck & trailer OEMs to order initial eHub volumes.
Whilst in India, the group is hoping to soon be confirmed as the sole eDrive partner for 3 products, with aggregate life cycle volumes of circa 500,000 units between 2023-29.
Revised Revenue Expectations
That said, by concentrating on the best long-term prospects, short term turnover will unfortunately be impacted. With the Board resetting the FY’23 revenue bar today (y/e March) from £21.4m to “at least 250% of FY’22 (£3.6m)”. Albeit still representing >£9m, of which the vast majority should fall into H2.
Elsewhere, rapid progress being made too on the Propel outboard motor. Targeting material commercial sales in FY’24 through established distributors across Europe. Plus, there is plenty of cash on hand (£23m Sept’22) to execute on #SED's exciting growth strategy.
Tony Gott, Executive Chairman, commenting: “As is hopefully clear from this update the progress with both CONMET and the Indian Light Duty market has been significant and exceeded our expectations at the time of the August capital raise."
"The Board has taken the decision, that it is in shareholders' best long-term interest, to apply more resources to these highly material commercial opportunities, rather than pursue small short-term sales contracts that are available today. The traction we have with global OEMs is significant and the Board is confident this will start translating into material revenues commencing in the next financial year."
Interims are scheduled for December.
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