One stock that performed very well yesterday was Strip Tinning Holdings (LON:STG),with its shares leaping from 51p overnight to a top of 84p, before closing at 70p, but still showing an impressive 37% gain on the day, following some 665,000 shares having been traded.
The Business
The Birmingham-based company manufactures specialist flexible electrical connectors related primarily to heating and antennae systems embedded within automotive glazing and to the connection of the cells within electric vehicle battery packs, increasingly using flexible and lightweight printed circuit technology.
The Glazing related products are used on vehicles of all types.
Driven by new technologies, this market is growing strongly with the group as a leading player.
In addition, the EV revolution is presenting valuable new growth opportunities for battery-related products and the group’s Battery Technologies division is a leader in the Mid-Market for such solutions.
Its strategy is to remain a leading supplier of specialist connectors for Glazing worldwide, while in the Battery Technologies market its aim is to become a leading supplier of Cell Contact Systems.
In the end-April issued 2023 Report & Accounts CEO Richard Barton, who owns 47.54% of the group’s equity, gave a strong hint of better news to come when he stated that:
“We believe that 2024 will be a formative year for the business with a strong focus on preparing for profitable delivery of the nominations already received as they ramp up in in 2025 and maintaining the investment needed to maximise our success in converting the strong Battery Technologies and Glazing sales pipeline we have before us to secure the nominations that will return us to significant growth from 2025.”
Major Battery Technologies Nomination
Yesterday the £12m capitalised company announced the receipt of a major high volume strategic nomination in the Battery Technologies market, from a leading German automotive motion technology Tier 1 manufacturer.
This production nomination is the group’s fourth in the Battery Technologies market and marks a major step forward towards high volume manufacture.
This state-of-the-art Cell Contract System is the largest yet supplied by Strip Tinning, measuring 800 mm x 400 mm and combines a laminated busbar laser welded to a flexible printed circuit that measures temperature and charge across the battery module.
Executive Chairman Adam Robson stated that:
“Momentum continues to build in the business and our positioning in the Battery Technologies market goes from strength to strength.
Our nominations order book in the last four months alone has nearly tripled, underpinning our medium-term ambitions and providing a very solid platform from which to grow.
We are delighted to be accelerating our recruitment drive and creating employment opportunities and remain confident in securing further sales progress.”
Analyst View
Caroline de La Soujeole, at Singer Capital Markets, rates the group’s shares as a Buy.
Her current year estimates to end December show £10.9m (£10.8m) of sales, with an adjusted pre-tax loss of £2.2m (£1.5m loss).
However, for the 2025 year she is predicting a £15.0m revenue and a reduced loss of just £1.0m but paying out an uncovered 1.00p (est. Nil) per share in dividend.
Jumping forward into 2026 the analyst estimates £20.8m of sales will help to turn the loss-making group into a £0.7m profit maker, generating earnings of 5.4p and covering a 2.00p dividend per share.
My View
Expectations are for the company to comment further on its first half performance and outlook for FY 24 and beyond in its H1 30 June pre close update which is due to be announced on 16thJuly.
Despite the company’s small cap status, this stock is beginning to garner a lot more investor interest, as can be seen by yesterday’s frenetic dealings.
More such Nominations, I feel, can be expected in due course, certainly enough to spur spasmodic punter participation sufficient to rekindle further attempts at the 84p High achieved yesterday.
