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CAP-XX – interims argue “excellent progress”, but financials look CrAP (XX)

By Steve Moore | Monday 20 March 2017


Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.


Self-described “world leader in the design and manufacture of supercapacitors, which considerably extend the performance of batteries”, CAP-XX (CPX) has announced results including that it “has again made excellent progress over the six months to 31 December 2016 and beyond in building on and refining its strategy”. Sounds positive. What? The shares currently 16% lower, at 8.5p?

This is as, despite emphasising a litany of “major developments”, the results show a 45% increased loss (of Australian$1.9 million) on lower revenue with “customers transitioning to smaller thinner products” and “supplier disruption, which resulted in CAP-XX's manufacturing line being non-operational for a period of seven weeks”.

Period-end cash was A$0.64 million, explaining why in January the company was “pleased to announce” it had raised a gross £2.43 million in new equity. Quite!

It notes “both Murata and AVX have recently announced the release of several key new products, which will likely continue to drive CAP-XX's revenue from royalties” and that “the board is very excited by the recent release of CAP-XX's new range of cylindrical supercapacitors and supercapacitor modules”, with “trading performance for the year ending 30 June 2016 should be in line with current market expectations assuming current licence and sales opportunities are realised in the time expected”.

Hmmm. Admittedly, I’ve previously been bearish at still much lower levels – the shares currently still well ahead from just over 5p at the start of 2017. However, I’d want to see clear financial progress rather than just talk of ‘excellent strategic progress’ and the like before reconsidering my stance. I currently continue to avoid.


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