The launch of a new 'Wall as a Service' offering and plans to build at least 10 houses outdoors in 2019 were not enough to outweigh the market's negative reaction to Fastbrick Robotics (ASX: FBR) ending a Memorandum of Understanding (MoU) with major US machinery company Caterpillar (NYSE: CAT).
In an announcement yesterday afternoon after the ASX had closed, Fastbrick Robotics stated the parting of ways was a mutual decision and from Caterpillar's perspective it was reflective of "strategic priorities" and "not indicative of the satisfaction with FBR's progress to date or its technology".
Caterpillar will divest its current 2.13 per cent shareholding in FBR in due course. At the time of writing the Perth-based company's shares were down 15% at $0.14.
"Due to emerging strategic imperatives, we have agreed to discontinue our Memorandum of Understanding with Caterpillar," said FBR chief executive officer Mike Pivac.
"We acknowledge Caterpillar's support to date and despite out strategic divergence we will continue to consider opportunities where we can work together in the future."
In a letter to shareholders today, Pivac elaborated on a presentation released to the market on 3 December outlining the launch of 'Wall as a Service', with a strategy to partner with brick and block manufacturers as well as builders to enable a scalable 'platform' business model.
The announcement comes within weeks of FBR completing a major milestone with its robot Hadrian X building a home structure in less than three days.
"In broad terms, WaaS means that FBR will enable brick and block manufacturers to deliver walls on demand for their customers," says Pivac.
"A builder will place an order and a WaaS business unit will program and deploy the Hadrian X to construct that structure. Where it makes commercial sense, FBR aspires to place a Hadrian X between every block made and every block laid.
"The earning potential of Hadrian X is such that offering Wall as a Service potentially makes a stronger financial return than machine sales. The WaaS model also removes risk for builders who need not purchase machines, maintain machines, program house builds or employ or train operators."
He says the model will help alleviate critical construction skills shortages and build accomodation for a growing global population.
"We have engaged with and listened to industry in Australia, the USA and Central America, Europe and the Middle East with the intention of providing a business solution that helps builders, home buyers and brick manufacturers solve their pain points and reduce their risk," he says.
"Our next 12 months are going to be the most exciting yet for FBR and will bring to fruition the hard work demonstrated this year.
"We now have two Hadrian X commercial prototypes that can demonstrate the capability and value of our technology, and our next priority will be the construction of the walls for a minimum of 10 houses outdoors in 2019 on commercial terms."
If this milestone is achieved it would represent the first revenues for the company since it was founded in 2015.Never miss a news update, subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.
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