• Fri. Feb 23rd, 2024

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Sevcon’s impressive £126m contract pipeline

Matt BoyleELECTRIC vehicle drivetrain innovator Sevcon says it is working on a series of major contracts which are set to boost sales by over £125m in the coming years.

The Gateshead company’s president and chief executive officer Matt Boyle told investors that it currently has ‘four major projects in its on-road development pipeline’.

One of the projects is a £28m contract with a British supercar company, announced earlier this year, while a second is with a South East Asian tier one supplier, which could be worth up to £35m.

Sevcon is unable to reveal further specifics on the remaining contacts, although Mr Boyle went on to say it is currently in further talks with one of the four on an additional deal, which could add a further £30m to this pipeline.

Mr Boyle said Sevcon’s world-leading electric drivetrain expertise has put it in a strong position to capture a large share of the growing global, on-road electrification market.

Electrifying on-road vehicle drivetrains requires highly-specialised staff and skills. Contracts for this work tend to operate on timescales of at least five years, with each passing a series of milestones from proof of concept to performance testing, tooling and then manufacture.

Mr Boyle said: “We currently have four major projects in our on-road development pipeline, with two expected to go into production in 2017, one in 2019 and one in 2020. In total, we expect production revenue to be approximately $166m (£126m) over the five-to- seven-year production lives of the projects, although none is guaranteed.

“We have five major milestones to accomplish on these projects between now and the end of 2017, with the first targeted for the first quarter of 2017.”

He added: “Many existing and potential customers do not have the internal resources or skills to deliver comprehensive electrification solutions so there is a tremendous amount of business up for grabs.”

This healthy outlook for Sevcon comes as it adds active investor Ryan Morris to the management team in the role of executive chairman, and follows a successful fund- raising drive which raised $9.6m from investors.

San Fransisco-based Meson Capital founder Ryan Morris has been compared by leading financial news platform Bloomberg to US active investing giant Carl Icahn.

Mr Morris, who has been a member of Sevcon’s Board of Directors since 2013, said: “I am honoured to be elected to this newly created role at Sevcon.

“I have been personally excited about the potential impact of electric vehicles for decades, and believe that Sevcon is well positioned to capitalize on the global trend toward electrification. I look forward to working with the management team and board to accelerate Sevcon’s growth and leverage its unique strategic position.”

The company’s announcements come just weeks after it opened an office in Oxford to support its growth and follows its purchase of Italian battery-charging firm Bassi earlier this year.

Sevcon currently employs over 60 skilled engineers in its Team Valley HQ and by recruiting up to 20 engineers in the Thames Valley, and the same number in Gateshead, it expects to have a 100-strong engineering team by the end of 2017.

Mr Boyle said these skilled engineers will ensure it can deliver on its emerging pipeline of work.

Sevcon recorded record sales of £27.5m in 2015 and is set to surpass that figure this year.

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