On its first day of dealings of London’s junior AIM market, Strip Tinning (STG ), a supplier of specialist connectors to the automotive sector, raised £11.5m at a price of 185p per share.
While its admission and dealings commenced this morning, a further 813,045 ordinary shares will also be admitted to trading tomorrow morning. Following this second admission, the Company will have a market capitalisation of around £28.0 million and a free float of 40.8%.
The Directors said they believe a London listing will enable Strip Tinning to accelerate its growth plans and underpin its early mover advantage in the electric vehicle battery sector.
The £11.5m net proceeds from today’s placing are expected to be utilised to increase production capacity in line with sales growth as well as to further automate key production processes in order to increase the company’s overall capacity, quality and productivity.
The funds will also enable Strip Tanning to augment working capital in support of its future growth, support an ESG programme and implement a new SAP financial reporting system.
The company explained that the net proceeds will be used for further investment in both Glazing and EV but ‘principally invested’ in developing EV product market opportunities.
Currently, the EV market is seeing high levels of growth and the Directors of Strip Tinning believe that this presents significant further opportunities for the Group. According to a recently published market report, the global electric vehicle market is anticipated to grow from around $287.36bn in 2021 to $1,318.22bn in 2028 at a CAGR of 24.3% in forecast period.
Strip Tinning consists of two business lines; glazing and electric vehicles (EV).
While over 90% of Strip Tinning’s historical sales have been related to Glazing systems, the transition of the automotive sector towards electric vehicles is providing significant new growth opportunities, with battery-related products representing the principal opportunity, it noted.
To date, the Group is cash generative and profitable and has reported ‘significant growth’ over recent years, with revenue growing at a compounded annual growth rate of 8.2% between 2017 to 2021, despite the headwinds of the ongoing COVID-19 pandemic and Brexit.
The Company outlined to investors that its growth strategy is to remain a leading supplier of specialist connectors for glazing for all classes of automotive vehicles manufactured worldwide and to become a leading supplier of connector sub-assemblies to the EV market.
Richard Barton, Chief Executive of Strip Tinning, commented: “Today’s admission to AIM is a significant landmark for Strip Tinning and a special day in the Company’s evolution.” He said a listing provides Strip Tinning with the resources to “further enhance its capabilities.”
Addressing shareholders, Barton added: “The business continues to go from strength to strength and has come a long way since being founded in 1957, plating wires and coils for general engineering applications in the local Birmingham area. We are now a leading supplier of specialist connectors to the automotive sector, having established long-term customer relationships with some of the automotive industry’s most familiar names.”
Follow News & Updates from Strip Tinning: