FY25 pre-close: EBITDA loss narrows and margins step up
Strip Tinning’s pre-close update for FY25 shows tangible progress despite ongoing constraints. Revenue landed at £8.6m, in line with market expectations. The Adjusted EBITDA loss came in at £0.5m, better than the expected £0.9m loss.
It’s not a turnaround yet, but it is a meaningful step in the right direction. Importantly, the statement flags continued operational improvements and a clear path to serial production on three major programmes in 2026.
| Metric | FY25 | Comment |
|---|---|---|
| Revenue | £8.6m | In line with expectations (£8.5m) |
| Adjusted EBITDA (loss) | £0.5m | Beats market expectation of £0.9m loss |
| Gross margin | 41.7% | Up 8.5 percentage points (FY23: 33.2%) |
| Year-end cash | £617k | Up from £512k at FY24 |
Adjusted EBITDA is a profit measure before interest, tax, depreciation and amortisation, adjusted for non-recurring items. The figures here are subject to audit.
Why the EBITDA beat happened
Management attributes the outperformance to two levers: roughly £0.2m from underlying operational improvements and about £0.2m of R&D tax credits booked as Other Revenue under the RDEC scheme. That cleanly explains the £0.4m delta versus the market’s view.
Gross margin is the standout. At 41.7%, it’s up 8.5 percentage points on FY23, helped by better operational execution and improved margins on sample and prototype orders through the year. That mix benefit may not fully persist into serial production, but it shows the cost and quality discipline is moving in the right direction.
Project launches: Zoox battery CCS and PDLC smart glass are close
FY25 was all about launch readiness for three major programmes. The company confirms it remains on track:
- Zoox Robotaxi battery CCS (cell contacting system): Serial production expected in early Q2 2026.
- Two PDLC smart glass roof connector projects: Ramping pre-serial volumes now, with serial production due in Q2 2026 and Q3 2026.
On the Zoox battery project specifically, Strip Tinning has delivered half of the D-phase order and expects to complete the rest by the end of February 2026. The next milestone is an expected order for PPAP parts – the final approval stage before serial production.
Management also met Zoox’s senior battery team in the US in January and came away “highly encouraged” by their readiness for early Q2 2026. Encouraging words, but the proof will be in the PPAP and serial start.
What PPAP means and why it matters
PPAP (Production Part Approval Process) is an automotive gate that confirms a supplier’s parts meet all requirements before full-scale production. Landing that PPAP order and completing it successfully is the bridge between development revenue and steady serial volumes. It’s the inflection point investors are waiting for.
Cash, tax credits and grants: tight but supported
Year-end cash was £617k (FY24: £512k). The company calls out “significant cash constraints”, but also a “strong focus on strict cash control”. In plain terms: liquidity is tight, but being managed to the order book and near-term milestones.
There are supportive inflows around the edges:
- £0.2m of R&D tax credits recognised in FY25 as Other Revenue under RDEC.
- £133k received for the remaining 2022 R&D claim.
- £292k received relating to the 2024 R&D claim.
On top of that, the APC26 consortium grant with JLR and others – worth £857k over two and a half years – has cleared its start-up conditions, and Strip Tinning has submitted its first quarterly claim (Sept-Nov 2025). While grants aren’t a substitute for commercial cash flow, they do help bridge the gap to serial production.
What this update means for STG investors
Overall, this is a constructive update that tightens the link between operational progress and the 2026 revenue ramp. The EBITDA beat is modest but meaningful, and the margin trajectory is heading the right way. The big swing factor now is execution on PPAP and the serial launches from Q2 2026.
Positives to underline
- Adjusted EBITDA loss of £0.5m beats expectations of a £0.9m loss.
- Gross margin advances to 41.7%, signalling better pricing/mix and operations.
- Three programmes with defined serial start windows in Q2/Q3 2026.
- R&D credits and APC26 grant help support near-term liquidity.
- Customer engagement remains strong, including direct discussions with Zoox’s battery leadership.
Risks and watch-outs
- Still loss-making and operating with a small cash balance (£617k).
- Successful PPAP – and on-time serial – is critical; slippage would pressure cash.
- Prototype/sample margin tailwinds may not fully carry into serial production economics.
- Revenue remains modest at £8.6m while the business scales up for launches.
Key dates and catalysts to watch next
- End of February 2026 – completion of the Zoox D-phase deliveries.
- Early Q2 2026 – expected PPAP parts order and Zoox serial production start.
- Q2 2026 and Q3 2026 – serial starts for the two PDLC roof connector projects.
- April 2026 – full FY25 audited results.
My take: cautiously constructive pending execution
Strip Tinning is doing what it needs to: control cash, shore up margins, and get launch-ready. The FY25 EBITDA beat and margin uplift are welcome. The grant and tax credits provide useful runway, but the balance sheet still looks thin until serial revenues arrive.
If PPAP lands smoothly and serial kicks off on time in Q2/Q3 2026, the narrative shifts from survival to scale. Until then, it’s an execution story with real upside – and real timing risk. I’d call this update a net positive, with the next two quarters doing the heavy lifting on sentiment.
