Right, let’s crack open Strip Tinning’s (AIM: STG) first-half results for 2025. On the surface, the headline revenue dip to £4.5m (from £4.8m H1 2024) might raise an eyebrow. But peer beneath, and there’s a compelling story of strategic pivots, burgeoning technology, and a company navigating choppy waters with eyes firmly on the horizon.
The Financial Picture: Margins Muscle Up While Battery Tech Ignites
Strip Tinning delivered a classic case of ‘quality over quantity’ in H1:
- Revenue: £4.5m (H1 2024: £4.8m).
- Gross Margin: The standout performance – soaring to 44.1% (£2.0m) from 35.4% (£1.7m) a year ago. This reflects ditching loss-making lines, productivity gains, and the shift towards higher-value projects.
- Adjusted EBITDA1: Improved significantly to -£0.3m (H1 2024: -£0.8m).
- Cash Flow: A crucial turnaround – £0.4m generated from operations vs. a £1.9m outflow last year. Though the cash balance sits at a lean £0.1m (H1 2024: £2.0m), they have £0.4m available on their CID facility.
- Basic EPS: (8.04)p per share (H1 2024: (14.58)p).
The Divisional Split: Battery Tech Takes Centre Stage
The real dynamism lies in the contrasting fortunes of their divisions:
- Battery Technologies (BT): **Explosive Growth**. Sales rocketed 333% to £1.2m (H1 2024: £0.3m). This is the future engine firing up.
- Glazing: Sales dipped to £3.3m (H1 2024: £4.5m). This reflects the well-documented softness in European auto production and their deliberate shift away from simple connectors towards higher-value “smart glass” solutions.
Operational Grind: Delivering the Golden Tickets
The first half was all about executing on the three major nominations secured in 2024 – the contracts underpinning their ambitious growth targets (£105.4m lifetime value, aiming to double sales by end-2027).
Progress on Key Nominations:
- BT – Zoox Cell Contact System (CCS): Successfully delivered the C Sample order. The C Phase completion has been extended to September 2025, pushing D Phase later, but the critical Start of Production (SoP) remains April 2026. Zoox opened its first full-scale production facility in May 2025.
- Glazing – PDLC “Smart Glass”: Two nominations worth £18.6m lifetime sales are progressing. One is on schedule for serial production in H2 2026. The other faced launch delays (first vehicle now Sept 2025 vs May 2025, others April 2026), likely trimming H2 sales by £100k-£150k.
Management emphasised relentless cost control amidst customer launch delays, weak auto production, and customer cost pressures. They also bagged an £850k APC26 grant over three years and received a welcome £0.7m R&D tax credit.
Future Capacity & Funding
Recognising that winning more big contracts will need serious capacity, Strip Tinning is deep into the application process for a multi-million-pound grant from the government’s Automotive Transformation Fund (ATF). They’ve cleared key hurdles (feasibility, EoI, pre-application) and will submit the detailed application in Q3 2025, expecting a decision Q4 25/Q1 26.
The Outlook: Navigating Headwinds Towards Transformation
CEO Mark Perrins didn’t sugarcoat it: “This has been a challenging period… under significant cost and cash pressures.” Short-term automotive woes are expected to linger into 2026.
However, the conviction shines through:
- The Board is confident in meeting market expectations for FY25 Adjusted EBITDA3 (understood to be -£0.9m).
- The £105.4m lifetime sales value of existing nominations remains intact.
- The strategic shift towards complex engineered solutions (Glazing PDLC) and early-stage design partnerships leveraging “know-how” (BT) is proving successful, especially evident in the BT division’s surge.
- Management’s focus is laser-like: deliver the current nominations into production to unlock that significant future revenue stream.
The Verdict: A Transition in Motion
Strip Tinning’s H1 2025 is a snapshot of a company mid-transformation. The traditional Glazing business is feeling the sector’s pain while pivoting up the value chain. Simultaneously, the Battery Tech division is demonstrating explosive growth potential, validating their strategic bet on electrification.
The numbers show tangible operational improvements – soaring margins and positive cash generation are no small feats in this environment. The cash position is tight, but grants are helping bridge the gap towards the production ramp-up of their major nominations from late 2025 onwards.
The story here isn’t just about weathering a storm; it’s about positioning for the electric future. Execution on those £105m+ nominations is paramount. If they deliver, the current headwinds will look like mere turbulence on the climb to a much higher altitude. One to watch closely as those key production milestones approach.
1 Adjusted for FX, share-based payments, restructuring. 3 As per company understanding based on Factset data.
