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Carbon Revolution on target
Forecasts met in Carbon Revolution’s first post-IPO half-year financial results
21 Feb 2020
GEELONG-based high-tech wheel manufacturer Carbon Revolution has taken its successful first steps as a public company and is on track to meet the forecasts made when it raised $90.1 million by listing on the Australian Securities Exchange (ASX) on November 29 last year.
In its first half-year results filing since the initial public offering (IPO), Carbon Revolution reported a 171 per cent increase in sales of its one-piece lightweight carbon-fibre wheels, with each wheel’s cost-of-sale down 54 per cent.
Although Carbon Revolution recorded a loss on the 6761 wheels sold in the first half, the company expects to achieve gross profit in the second half and move into operating profit during the last quarter, on the back of its predicted full-year wheel sales of 23,000 units – representing 300 per cent year-on-year growth – generating around $62m in revenue.
The company says economies of scale are now being realised, aided by manufacturing efficiencies and increased throughput that should continue to improve with the arrival of new equipment, tools, technologies and processes arriving in the next few months.
Annual production capacity of the Waurn Ponds manufacturing facility is expected to reach 32,000 wheels by mid-year.
Strong demand for Carbon Revolution products is projected to remain, supported by increased manufacturing capacity, greater uptime and a larger workforce.
Meanwhile, “healthy” investments in research and development are being rewarded by bigger tax rebates.
A $2.4m federal government grant secured last year is enabling the company to push into the aviation sector, starting with the development and production of lightweight wheels for the Boeing CH-47F Chinook helicopter.
Carbon Revolution has nine contracts with five automotive manufacturers, six of which have already gone on sale.
Its wheels are standard or optional on the Ford GT, Ferrari 488 Pista and Ferrari SF90 Stradale supercars as well as flagship GT350 and GT500 variants of the Ford Mustang.
The most affordable model to include Carbon Revolution wheels to date is the Renault Megane RS Trophy-R that is priced at $74,990 plus on-road costs in Australia.
The first SUV application of Carbon Revolution wheels is also in the works, although the make and model remains under wraps.
Carbon Revolution expects much of its short- and medium-term growth to come from existing and new contracts with luxury and high-performance car manufacturers, with improved economies of scale and greater production volumes making its products viable for a broader range of brands and vehicles.
CEO Jake Dingle said the company was “on a strong trajectory for both production and sales, and our focus remains on delivering an exceptional product to meet our growing order pipeline”.
“Carbon Revolution seeks to innovate across three distinct layers,” he added.
“First, the product, and there is no doubt we have led the way in the design and production of single-piece carbon fibre wheels.
“Second, our unique manufacturing plant and processes, which we look to continually improve and industrialise.
“Our third and equally critical layer of innovation relates to how we do things differently and better when it comes to building our team.
“Our culture, the way we work together and our collaborative and inclusive approach are as unique as our technology.”
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