Sondrel Holdings - New £2m Convertible Loan and Transformation Plan

Sondrel has announced it has secured an additional £2m convertible loan note with ROX Equity Partners to fund near-term payroll and working capital needs. The terms are similar to the ones agreed for £0.9m CLN in Feb 2024 with a 15% interest rate, a three-year repayment term, and is expected to convert into ordinary shares at 10 pence each. The proposed fundraise that is open to existing shareholders has now increased from £6.5m to £8.5m (including the proceeds from the CLNs), with a subsequent

Morning Note – 27 February 2024

Morning Note – 11 January 2024

Sondrel Holdings - Further Detail on Automotive Milestone

Further to the trading statement over the Christmas period, Sondrel has provided an update on the financial statement impact from the automotive milestone movement. The ongoing customer discussions around a funding resolution are unlikely to be accomplished in time to recognise £2.7m of related revenue in FY23E, instead it will be pushed to FY24E. This means we have reduced our FY23E revenue forecast from £13m to £10m and increased our net loss from -£6.4m to -£9.4m. We are also taking the oppor

Sondrel Holdings - Automotive Milestone Shifts to FY24E

Significant design milestone payments of £1.7m relating to the major automotive project have shifted from December 2023 to January/February 2024, with tape out likely in March. As we have witnessed, the movements of milestones are not unusual, but this one unfortunately happens at a time of a stretched cash position. The Group is looking to improve its cash position in the immediate term in three ways: deferral of the Company Directors’ and senior management’s salaries; additional payments from

Morning Note – 4 December 2023

Sondrel Holdings - Siemens Holding

Following the news on Friday 1 December that Siemens has, subject to completion, disposed of its 11.2% holding in Sondrel at 6p per share, we see a significant buying opportunity. We believe the sale was for Siemens AG organisational convenience rather than in relation to Sondrel’s fundamentals. We have summarised the history of the relationship, our view on the rationale for the sale and touch on the latest industry outlook. We reiterate our 1-year price target of 74p which is just shy of the h

The Joy of Techs - Cavendish Technology quarterly sector note

£23.3bn in enterprise value has been returned to AIM technology shareholders over the past six years in the form of 51 public to private takeouts, including 10 in 2023 alone with the takeovers of Smoove* and Tribal announced in early October. With UK valuations appearing cheap and looking more attractive to potential acquirers, we take a moment to reflect on the trends of corporate and private equity bidders targeting AIM-listed technology companies going back to 2017, through the uncertainties

Interims due on Wednesday - preview

Sanderson Design will release interims on Wednesday and markets are pricing in downgrades. However, alongside a significant overseas growth opportunity, a growing pipeline of licensing opportunities is expected to underpin trading in H2 and beyond. The Board’s expectations for full year profits therefore remained unchanged at the time of the pre-close in August. If forecasts are sustained (assumptions look fair), the valuation is far too cheap and detached from any near peers, on just 8x P/E (6x

Morning Note – 21 September 2023

Sondrel Holdings - H1/23A Interim Results

Sondrel has released a solid set of interim results, in-line with its prior trading update. The first half showed good development on expanding the full turnkey ASIC service and progressing several projects to tape out. As previously highlighted, the environment has become more challenging in the second half of the year as customers delay decisions on next generation projects in light of weaker consumer confidence. We have prudently revised our FY24E forecasts lower, but they still show c100% gr

Cenkos: Sondrel Holdings Plc -- Contract Timelines Shift

Sondrel has released a trading update for the period ended 30 June 2023 and the full-year outlook for FY23E. The company reports good progress on H1/23E revenue delivery and in expanding the revenue pipeline for the years ahead. However, contract delays mean that the revenue outlook for H2/23E is revised down from our previous expectations, as we outline in our report. We maintain a BUY rating based on the growth opportunity from FY24E onwards and an FY24E EV/Sales ratio of 1.2x compared to 1.7x

Cenkos: Sondrel Holdings Plc -- A Chipper Set of Results

Sondrel has released its inaugural annual results as a public company following its successful IPO last year. The results are in-line with expectations and guidance at both the top and bottom-line. The year saw the effective pivot from being a predominantly design consultancy model to a full turnkey ASIC provider. The Group successfully expanded its US presence and started designing at 3nm node sizes. Sondrel's valuation looks very compelling with an FY2 EV/Sales of 1.0x compared to UK semicondu

Cenkos: Sondrel Holdings Plc -- New tape-out

A new contract secured in Q4A last year has taped-out in Q1E and will move swiftly into New Product Introduction (NPI). A 12-month time horizon can be expected before Production revenues accrue, with $5m indicatively expected per annum over a five-year period. Orders are likely to be firmed by H2E and Sondrel now has line of sight of a second Production customer which again places upside risk on our FY24E Production forecasts.