Saietta Group’s (SED) Shares Plunged 59.6% on Its Latest Update

The Saietta Group PLC (LON: SED) share price plunged 59.6% after providing an update about its commercial activities following its 27 November 2023 update. The international company specialises in designing, engineering, and producing comprehensive electric drivetrain (eDrive) systems for electric vehicles. 

The company revealed that it had been offered £600,000 to acquire an unused production line at its manufacturing premises in Sunderland, UK. This offer comes as a consequence of the firm's inability to finalise a commercial agreement for a contract manufacturing project involving electrical steering pumps at the Sunderland site, which was previously disclosed. 

While the potential contract manufacturing deal did not involve the development of the company's products, it was expected to significantly contribute to the Group's revenue over the medium term, albeit with limited profit margins.

Saietta's joint venture, Saetta VNA, continues its collaboration with its principal OEM client on the large-scale production of Saietta's unique AFT and RFT technology. Below is an update on the significant contract opportunities with this client, as mentioned in the November 27, 2023 announcement, along with their current progress.

The company has successfully received a purchase order for the supply of AFT (Axial Flux Technology) for a 3-wheel eDrive vehicle, marking a significant step in their commercial activities. Currently, pilot production is well underway, with expectations set for the commencement of commercial production by October 2024. 

In addition to the AFT supply, the company has secured a purchase order for the pilot production of RFT (Radial Flux Technology) for the same category of 3-wheel eDrive vehicles. This development was publicly announced on November 13, 2023, and the pilot production is slated to begin in July 2024. 

Furthermore, the company is actively working towards securing an initial purchase order for the supply of AFT for a 4-wheel eDrive vehicle. The target is to finalise this order by the end of March 2024. 

The company is in ongoing discussions with another OEM regarding the potential sale of its RFT eDrive for a 2-wheel vehicle. It aims to secure a ‘proof of concept' agreement from this customer by the end of March 2024.

As mentioned, the company maintains a positive cash flow sufficient to support operations until the end of March 2024. 

Saietta Group (SED) share price. 

The Saietta Group share price plunged 59.56% to trade at 6.47p from Monday’s closing price of 16.00p.