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16 Apr 2019 | 09:28

CAP-XX warns of softer demand for wearable technologies

CAP-XX warned of some softening in demand from manufacturers of wearable technologies.

The company said it is clear that the slowdown in vehicle demand has not affected demand for its products in the informatics and other low energy automotive applications, although the time to market for developing large cells for vehicle motive power and storage applications has slowed, with the result that CAP-XX has rebalanced its immediate-term focus around small cell automotive applications.

CAP-XX previously announced sales to Spire have not been followed up with new orders, as Spire has been impacted by trade tariffs into the US. Spire has repositioned its device from the sports leisure market to the professional medical market in order to sustain a higher price point.

Over the last few quarters, CAP-XX achieved success in securing orders for the supply of supercapacitors to Tier-1 component suppliers to the global automotive industry.

In order to strengthen its relationships in this increasingly important segment, the company has appointed Marco Ranalli to lead CAP-XX's European business strategy serving the specialist demands of the automotive industry as well as the internet of things (IoT).

Mr Ranalli was most recently global director of US-listed Gentherm's Battery Systems business unit and has over 20 years' experience in the automotive markets.

Mr Ranalli will also evaluate the potential benefits of establishing a local engineering and new business centre in Germany and work alongside CAP-XX's European distributor network to develop supercapacitor solutions to meet the specific demands of the automotive sector.

PIPELINE AND LICENSING ACTIVITY

CAP-XX said it continues to receive record interest in its expanded range of supercapacitors, notably for applications relating to the IoT.

The range of markets where enquiries are at record levels include Automotive (non power train). Enquiries are also at a high level for customers in the IoT (Wireless, Track & Trace applications), and smart meter industries.

CAP-XX's current licensees include Murata, AVX and TDK. The company said it remains in active discussions with a small group of potential further licensees in addition to a similar number of discussions which are at a less advanced stage.

Most of these potential licensees are international component makers and companies focused on the energy storage markets. It is not possible to be precise on the timing of securing additional licensees, although the Board believes that further progress will be made during this calendar year.

In the meantime, CAP-XX reported it continues to enjoy rising enquiry levels and views future licensing opportunities with increasing confidence.

INTELLECTUAL PROPERTY

CAP-XX said it continues to vigorously defend its intellectual property (IP) which it believes to be the cornerstone of its position as the world leader in prismatic supercapacitors, as well as a world leader in the broader supercapacitor market.

The level of IP infringement it suffers as a consequence of this prompted the company to dedicate the necessary resources to protect its position through litigation where necessary.

The level and strength of CAP-XX's international licensees bears testament to this position and IP conflict resolution is an active source of new licensees whilst defence of the IP is a part of the firm's duty of care to its contracted licensees.

The company is currently in the process of litigation with two counterparties in the United States. The Board is aware that the litigation process in the US can be protracted.

CAP-XX reported it continues provide for and monitor costs in this area very closely and continually evaluates the benefits of its IP defence strategy as well as constantly reviewing the requirement to file additional patent infringement claims.

OUTLOOK

In the company's announcement of 6 March 2019, CAP-XX highlighted the importance of a series of customer visits in relation to understanding certain customers' order positions and how these will translate into shorter term sales revenue.

CAP-XX is still in the process of conducting a number of these customer visits and the Board will provide an update on trading in respect of the anticipated overall outcome for the full year ending 30 June 2019 in due course.

At 9:28am: (LON:CPX) CAPXX Ltd share price was -1.1p at 4.15p

Story provided by StockMarketWire.com
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