- Positioning for DC Charging future
Strong Future - Bi Directional Charge - Close to market release
A key requirement of electric vehicle - Supporting Equipment
Trading volumes increasing, ASX release lowered guidance but confimed additional engineers being employed, factory capacity increased
Tritium managed to secure a pivotal debt funding deal of $45 million with US healthcare giant, Cigna Corporation. It was reported that this investment would be used to refinance an Australian government loan provided to Tritium under Export Finance Australia and be applied towards expanding production capacity and the company’s reach into the US and European markets.
Tritium continues to go from strength to strength as illustrated by the following key developments to date:
· Installation of 20 fast chargers in the City of Pasadena, California.
· Installation of 33 fast chargers at the Port of Long Beach, California.
· Installation of fast chargers at one of the largest Harley-Davidson dealerships in the US, Timpanogos Harley-Davidson of Lindon, Utah.
· In August 2020, Tritium unveiled its new DC fast charger, which can power EVs to an 80% charge in 15 minutes and is the first charger on the US market capable of Plug and Charge, a communications protocol enabling EVs and charging equipment to communicate, authenticate and bill customers via the charging cable.
· As at October 2020, Tritium had 8 job openings based in Amsterdam, Netherlands, evidencing the expansionary efforts across Europe.
Despite the adverse impact of COVID-19, RFT’s performance in 2020 is promising. RFT’s revenue decreased by 11.33%, which is reasonable given its manufacturing facilities were compromised between mid-March to May due to COVID restrictions. If you apply a time basis approach, the decrease is in line with lost production time being 11.53% (6/52 weeks). If COVID hadn’t arisen, revenue would have been around the same as FY19.
The slight decrease in revenue is disappointing but the runway for growth remains extremely long. I was really impressed with RFT’s ability to significantly reduce its COGS (raw materials and consumables used) as a percentage of revenue from 48% in FY19 to 29%, contributing to a decent increase in gross profit margins (45% in FY19 to 54%). RFT has managed to achieve operating efficiencies through capitalising on the additional factory purchased in October 2019.
There were also no retrenchments made and additional engineers were added to the Research & Development team, which is a major positive. This is supported by my sighting of a job posted by RFT in August, looking to recruit a Power Electronics engineer with 5-10 years of experience. It is a great sign that management are deploying capital into developing superior products to achieve long-term growth.
As a lot of businesses battle the economic headwinds brought on by COVID, we should monitor RFT’s collection of debtors, which increased by around $200k or 2% of sales.
Recently: 04-Aug-2020: COVID-19 Update
--- click on links above for more ---
I've cleaned that up quite a bit - it was clearly written by someone for whom English is not their first language - the original can be read here (first page).
[I don't hold RFT shares. They've been on my Strawman.com scorecard for a trade, but I reckon I might roll that virtual money into something else shortly.]