Flexibility and focus are two crucial qualities of any high growth firm, So much so that Saietta Electric Drive (SED) – an innovator in all things eDrives/eMotors for electric vehicles – has embedded them within its DNA. That means it's not only able to uniquely tailor solutions to meet specific OEM requirements using its patented modular designs, but also allocate resources to those sectors offering the greatest upside potential.
 
In this vein, Saietta announced this morning a new commercial deal with its US heavy duty truck partner ConMet to replace the existing Joint Commercialisation & Development Agreement (JCDA).
 
Under the new relationship, ConMet will pay Saietta €3.3m (split €2.7m immediately for IP licensing and €0.6m for plant & equipment), alongside an ongoing 2.5% royalty for licensed technology capped at €20m.
 
Importantly, too, no future development costs will be borne by Saietta, and all 27 of its JCDA employees will transferred to ConMet, reducing costs by approximately €2m a year. In addition, it remains free to develop other eDrive products for lorries and buses apart from those related to in-wheel truck generators and motors.
 
In terms of the numbers, there is no change to guidance, with Canaccord anticipating revenues to jump from £6.0m in FY23 (versus £4.3m last year) to £12.1m and £36.0m respectively over the next 2 years. That would deliver adjusted EBITDA and EPS of £12.0m and 7.5p by 2025, alongside a trough net cash position of £2m (from £11m cash in February 2023) and a 120p a share valuation

Executive Chairman Tony Gott, commented: "To fully exploit the significant and immediate opportunities from selling Saietta Electric Drive's electric drive technology to manufacturers of lightweight electric vehicles (LEV) globally, it is vital that we focus our time and resources in that area."
 
"As such, we have reached a pragmatic solution to restructure the ConMet arrangement given commencement of revenue generation from the JCDA does no longer meet our short-term sales strategy. This will enable us to benefit from an immediate cash payment and accelerate our activities in the LEV sector where there is greater near-term potential."
 
"This development is fully aligned with our stated strategy of driving Saietta Electric Drive into positive EBITDA as soon as possible, with a target of early 2024."
 
Audited FY23 results are scheduled for mid-September