Zero-emission vehicle innovator Sevcon is poised to double its North East engineering team and recruit additional worldwide sales staff as it seeks $10m from shareholders to support its growth.
The Gateshead-based business, which is listed on the Nasdaq in the US, has launched a rights issue in which it says some of the additional funds may be used for potential overseas acquisitions.
Matt Boyle, President and Chief Executive Officer of the electric vehicle control manufacturer, believes the global on and off-road hybrid and electric vehicle market is set to move into a new gear.
The $10m (£6m) rights issue follows a strong lift in revenues and profits over the last few months. Revenues for the six months to March 31 were $18.2m (£10.7m) compared with $14.7m (£8.6m) in the first six months of 2013, while profits came in at $906,000, (£534,000) compared to an operating loss of $1.6 million (£940,000) in the first six months of last year.
Sevcon’s research and product development is conducted from its Team Valley headquarters, where it employs a team of 40 skilled hardware and software engineers.
Boyle said: “Realistically we are looking at doubling the size of the Gateshead engineering team to 80 staff to meet our projected demand and we also want to increase our global sales team from .
“A number of significant new opportunities are currently presenting themselves and we are scaling the business to meet these growth projections.”
Almost all of Sevcon’s sales are overseas and the company has highlighted Asia, and specifically China, for major growth opportunities.
Earlier this year it signed a joint-venture with a Chinese automotive supplier Risenbo Technology. Operating as Sevcon New Energy Technology, the new company will sell Sevcon products to tier one automotive suppliers in China.
Boyle said: “The Chinese are far ahead of the rest of the world in adoption of low carbon vehicles. Last month the Chinese government said it would remove six million older polluting vehicles from the road this year, and replace them with lower polluting gas or pure electric cars.
“The desire of Far East governments to reduce the number and type of polluters isn’t limited to passenger cars, but includes buses and trucks, although rather than producing pure electric vehicles they are trying to promote hybrid technologies as well.”
“The far east in general and China especially, have reached an inflection point in the electric vehicle market.”
Further details of the rights issue were announced on the Nasdaq recently, with the company’s market statement saying: “The net proceeds will be used for general corporate purposes and growth, including funding Sevcon’s ongoing research and development and product commercialization initiatives and acquisitions of other businesses.”
Boyle added: “We believe that when we identify a possible acquisition, it would be desirable to have the resources at hand to complete any transaction quickly.”