Strip Tinning’s FY24 results tell a story of strategic repositioning – revenues dipped while future pipelines surged. The numbers reveal a company navigating short-term headwinds while laying foundations for what could be transformational growth in electric vehicle (EV) battery tech. Let’s unpack the essentials.
The Financial Headlines: Short-Term Pain, Long-Term Positioning
Revenue fell 17% to £9.0m (FY23: £10.8m), driven primarily by a strategic exit from low-margin legacy products. This contributed to an adjusted EBITDA loss of £1.9m (FY23: £0.1m profit) and negative operating cash flow of £2.3m. Cash reserves stood at a tight £0.5m year-end.
But look beyond the immediate figures:
- Gross Margin Improvement: Jumped to 33.1% (FY23: 30.1%), showcasing effective cost control and a shift towards higher-value products.
- The Pipeline Explosion: The real headline is the lifetime value of secured nominations rocketing to £105.4m (FY23: £34.1m). This isn’t hope – it’s contracted future business.
- Battery Tech (BT) Division: Sales were £1.0m, but the order book points to FY25 revenue being more than 2.5x FY24.
- Glazing Division: Sales of £8.0m (down from £9.7m) but remains cash-generative with improved margins and secured new nominations (£48.4m lifetime value).
Operational Shifts: Where the Future Lies
Strip Tinning is executing a clear pivot:
Battery Technologies: The Growth Engine
- Zoox CCS Nomination: The crown jewel. Lifetime value increased to £57m due to added scope. Pre-production parts expected 2025/26, volume ramp-up starts Q2 2026. This is the project driving the anticipated 130% CAGR in BT sales between 2024-2027.
- Strategic Focus: Targeting the mid-market CCS segment (projected to double every 5 years), aiming for ~7% share by 2027. Working closely with five key strategic customers.
- Investment: Added capacity (e.g., £0.6m laser welder), team expansion, and process improvements (lean principles, error-proofing).
Glazing: Steady & Selective
- Focus shifting to higher-value “smart glass” PDLC connectors, with two significant nominations (£18.6m combined value, SOP Q3 2025 & Q3 2026).
- Actively reducing exposure to simple, low-margin connectors.
ESG & Efficiency
- Maintained best-in-class ‘A’ ESG rating for the fourth consecutive year.
- Implemented SAP ERP system, improving controls and efficiency.
- Reduced accidents by 30%.
Board & Leadership: Passing the Baton
Adam Robson stepped down as Executive Chairman upon finalising the results, marking the end of his three-year tenure. Paul George assumes the role of Non-Executive Chairman immediately. CEO Mark Perrins’ leadership team is now firmly established to execute the growth strategy. Robson expressed “utmost confidence” in the team during his departure comments.
Funding the Future: The Crucial Next Phase
The company acknowledges cash will be “constrained” over the next 12-18 months, becoming “particularly so” around mid-2026 as the Zoox project ramps. Mitigating actions are underway:
- Cost/Capex Reductions: Over £3.5m identified for 2025/2026.
- Glazing Headcount Reduction: Implemented to conserve cash.
- Active Funding Pursuit: Critical for working capital during the ramp-up. Options include:
- Additional debt (specifically targeting UK Government Export Credit Guarantee scheme).
- Grants (two applications in progress).
- Equity investment / strategic partners.
The success of this funding push is arguably the single biggest near-term factor determining their ability to capitalise on the secured pipeline.
Outlook: Confidence Tempered by Realism
Management remains confident:
- FY25: Expect to meet market expectations for Adjusted EBITDA (consensus implies significant improvement from FY24’s loss).
- FY26: Target to be EBITDA positive.
- FY27: Target to become cash generative.
Risks & Challenges:
- Execution: Flawless delivery on the Zoox project and other new nominations is non-negotiable.
- Funding: Securing the necessary working capital finance is paramount.
- Macro: Potential tariffs (especially impacting US exports via Zoox) and broader automotive sector volatility are acknowledged headwinds.
- Short-Term Sales: Expects FY25 sales slightly lower than previous expectations due to order declines, though cost cuts protect the EBITDA outlook.
The Verdict: A High-Stakes Transition
Strip Tinning’s FY24 was a year of significant strategic groundwork. They’ve sacrificed near-term revenue and profitability to exit low-margin work and, crucially, secured a potentially game-changing pipeline, predominantly in the high-growth EV battery space.
The next 18-24 months are critical. Success hinges on:
- Operational Execution: Delivering the Zoox project and other nominations on time and to spec.
- Financial Navigation: Tight cash management and successfully securing the required funding for the 2026 ramp-up.
The £105m pipeline provides compelling potential. Now, it’s about bridging the gap and proving they can convert nominations into profitable, cash-generating reality. The board’s confidence is clear; investors will watch the execution closely.
