Preliminary Results and Notice of AGM

RNS Number : 0822R

Surface Transforms PLC

19 September 2017

 

Surface Transforms plc

("Surface Transforms" or the "Company")

Preliminary Results and

Notice of Annual General Meeting

Surface Transforms (AIM: SCE) is pleased to announce its preliminary results for the year ended 31 May 2017. The Company's Annual Report and Accounts for the year ended 31 May 2017, together with a notice convening the Company's Annual General Meeting at finnCap, 60 New Broad Street, London, EC2M 1JJ on Tuesday 28 November 2017 at 11.00 am will be posted to shareholders in due course. Copies of the Annual Report and Accounts will be available on the Company's website: www.surfacetransforms.com as from this posting date.

Highlights

·     Trading and cash in line with June 2017 trading update

·     Revenues decreased by £660k to £702k (2016: £1,362k) due to a deferral to the 2017-18 financial year as a result of a conscious decision to switch capacity from revenue generating product to test parts during the factory move

·     Knowsley factory move now fully completed

·   Successful equity placing and open offer raised gross proceeds of £3.677m to further the Company's expansion plans post the financial year-end. Except for the ceramic furnaces, all new capital equipment has been ordered and is being progressively commissioned for increased production capacity

·     Gross margin percentage increased to 61.0% (2016: 51.6%)

·     LBITDA (including tax credits and excluding share based payments) loss of £1,944k (2016: loss of £640k)

·     Increased research costs of £1,916k (2016: £1,254k)

·     Loss before taxation of £2,528k (2016: loss of £1,154k)

·     Loss per share at 2.41p (2016: loss per share of 1.44p)

·     Cash used in operating activities increased by 34.2% to £1,220k (2016: £909k)

·     Cash position as at 31 May 2017 of £1,532k (2016: £4,777k)

·     Nominated as the tier 2 brake disc supplier on the Aston Martin Valkyrie

·     Continuing progress with other automotive Original Equipment Manufacturers (OEMs) albeit with certain programme delays, outside the Company's control

·     Continuing delay on the formal sign off in the aerospace contract despite completion of testing

Chairman's Statement

The Company continues to progress its transformation from an early stage developer to a mainstream, profitable, volume automotive components supplier. A comprehensive update on financial and operational progress was provided in the Company's recent fundraising circular to shareholders dated 6 July 2017 and this remains unchanged; solid progress was made operationally in the year, including the contract win of the Aston Martin Valkyrie brake disc, a £1m programme, and the Company's first mainstream contract.  Whilst progress was made on some of the other target automotive OEM contracts, there are programme delays, outside the Company's control.  In addition, the biggest short-term impact is the delay in the aerospace contract, originally planned to commence in January 2018 with sales of £1.5m per year.

As a result, following the financial year end, the Company successfully sought further funding, raising £3.677m, (before fees) which will provide sufficient cash to properly exploit the Company's current commercial opportunities, both for capital expenditure and general working capital purposes. The Directors wish to thank the shareholders for their support in this fund raising.

Operational Progress

Knowsley facility: The previously notified problem with the gas supply has been resolved although this distraction did result in certain production delays. However, the Company is now in full production, on all processes, at Knowsley. The new site, (five times the size of the old site) has been designed using "lean manufacturing" principles and is now, after initial start-up problems, performing better than the old site. The Company fully vacated its old Ellesmere Port facility on 30 April 2017.

The current capacity of the new site is sales of £4m per annum in two cells: Small Volume Automotive Production providing £2.5m and Aerospace providing £1.5m. When the current investment programme is complete, total capacity is expected to be £16m per annum, although given the site's floor space £50m sales per annum could be achieved, albeit this would require additional capital expenditure. This £50m sales target reflects the pipeline of the current customer discussions.

VDA 6.3: All German customers require this quality standard. At the Company's request, OEM 3 completed a "potential survey analysis" in the year aimed at evaluating progress and calibrating the Company's perception on the closeout actions needed before final approval of VDA 6.3. The survey achieved this objective and the customer confirmed Surface Transforms is close to being approved. An action list with a relatively small number of items has been agreed and management expect to address these, prior to the next audit in November 2018, this date being a slight delay from previously notified September- reflecting diary availability from the customers audit team.

New capital equipment: With the exception of the ceramic furnaces the new equipment is on order at prices broadly in line with budget. Delivery of the new equipment started in June 2017, with further furnace deliveries expected over the next six months. This represents a three months delay from the original plan but does not impact any internal or customer critical path milestones.

Production cost reductions: The Phase One cost reductions were always in two parts, those associated with detailed engineering changes and those associated with the new equipment. The former is now almost complete; the latter are on target for completion as the new equipment is delivered.

Additionally, further cost reductions have been identified from both the establishment of a Combined Heat and Power Plant on the new site and increased purchasing power on gas supplies.

Grants and loans: At 31 May 2017, the Company had expended £2.3m of its capital expenditure and thus triggered the final release clause on the £500k grant and loans. £382k has now been received in the financial year, a further £78k was received in June and the outstanding balance of £40k is expected before the closing receipt date of November 2017

 Progress with potential OEM Customers

German OEM 3: This customer is now expected to introduce the Company's products earlier than anticipated ‐ now in 2018 ‐ albeit on a limited edition racetrack only car. Contractual details are in final discussion, and one relatively straightforward regulatory approval test remains to be completed (note: the Company has already passed this particular test on other cars for OEM 3, as well as many other customers). Revenues from this car are expected to be circa £500k during a race season ‐ that typically runs from March to October. The customer is able to accelerate this introduction because the product requirements are different for track cars than road cars. The Board considers this decision further validates the customer's confidence in the core Surface Transforms product.

In respect to the road car, the Company and the customer are now planning a revised introduction route to the previously announced mainstream, volume, vehicle range. The vehicle range is unchanged but the introduction variant is different to and later than previously announced. This has the effect of giving the Company a further six months to complete and replicate the outstanding product testing which moves volume revenues (excluding race car) back twelve months. However, as this is solely a different entry point to the same model range it does not impact medium term sales.

Testing to meet the product requirements is ongoing and the Company believes it can meet the customer's requirements in the near future. However, the Company and customer have agreed that Surface Transforms needs to replicate these results and this could take until the end of the calendar year ‐ consistent with the new road car nomination date.

British OEM 2 and German OEM 4: OEMs 2, 3 and 4 are sister companies in the same group. German OEM 3 has re‐iterated that their testing programme covers the requirements of other group companies. Completion of product testing with OEM 3 will therefore complete testing for OEMs 2 and 4.

German OEM 5: This is a different German automotive group. The customer's testing is going well; they have slightly different test requirements to German OEM 3 although the Company believes that it can also meet these. The customer has re-iterated the target model with a 2019 start of production date with mature run rate volumes of £2.5m per year.

British OEM 6: In the year, the Company won an order with Aston Martin ‐ now described as OEM 6. Engineering work on the Aston Martin order continues to plan and the launch date of January 2019 is unchanged with development revenues for the Company expected before that date.

British OEM 1: Delay with the first model for OEM 1 is understood to be due to challenges they are having integrating their brake system and unrelated to the discs. The customer's solution appears to have been to ask the Company's competitor for a holistic caliper and disc system offering. As a result, this latter project has been deleted from the Company's internal forecasts and replaced by Aston Martin. The net effect of these changes is minimal. The Company continues to include the second model for OEM 1 in its planning as it will be offering a joint caliper, disc and pad solution to the OEM, replicating the success of Aston Martin.

Aerospace: As previously reported, testing has been completed and the only outstanding issue is formal sign off by US Naval Air Command and the aeroplane manufacturer. However, this "sign off" continues to be delayed, for reasons the Board now knows to be the result of the aeroplane customer wanting to "package" a number of changes at the same time. The Company is in continuing discussions with its landing gear customer with regard to the financial implications of this airframe delay, as the launch date was a fundamental feature of the original commercial agreement. These discussions include continuance of development income if production income is delayed for reasons within the customer's responsibility. The discussions are constructive but, as yet, without resolution.

Impact on the business plan in future years: The new race track business is a welcome short term boost to revenues but as previously announced the uncertainty over aerospace revenues and the later starting date for the OEM 3 road car could potentially delay total planned revenues by a year, each year, for the period to financial year 2020/21 returning to the previous notified run rate thereafter.

Strategic Report

Operational Review and Principal Activity

Surface Transforms is a UK based developer and manufacturer of carbon ceramic products for the brakes market. In these industries our products are lightweight, extremely durable and highly refined.  They offer better heat dissipation and material strength; resulting in superior wear life, improved brake pad wear life and weight reduction compared to our competitor's carbon ceramic products in the automotive industry and for the aerospace industry they offer weight reduction, improved brake performance and superior wear life.

Our strategy is to be a profitable, series production supplier of carbon ceramic brake discs to the large volume original equipment manufacturer (OEM) automotive market and to niche military and small commercial aircraft brake market.   To achieve this, we work closely with Tier 1 suppliers and directly with OEMs to meet their requirements on product, price, quality and security of supply.

In addition, we supply carbon ceramic brake discs to small volume vehicle manufacturing and retrofit high performance kits for performance cars.

The key features of our business model are as follows:

·     Engineer and manufacture carbon ceramic brake products, which deliver high technical performance for the luxury and performance brakes markets, which we estimate to be, ultimately, a £2 billion per annum market

·     Be a 'Quality Company' with a culture which lives and breathes its world class business processes and management systems.  We surpass the automotive and aerospace quality standards (TS16949 and AS9100); and through continuous improvement, work to comply with the German automotive industry quality standard (VDA 6.3)

·     Operate lean manufacturing processes, enabling the Company to have a highly competitive low cost manufacturing route making our products price competitive with good margins

·     Support and manage our supply chain which is then capable of delivering to our customers' requirements on product, price, quality and security of supply

·     Build manufacturing capacity. Initially to 20,000 discs/annum (equivalent to circa £16 million revenue) which is further expandable, with capital expenditure, to 100,000 discs/annum.

Succeeding in these activities generates highly desirable, world leading quality products, which are price competitive and profitable to the business.

Furthermore, our products and processes are protected by a high level of intellectual property through a combination of patents and mainly Company process knowhow.

 

Delivering our objectives:

Niche vehicle and Retrofit

Niche vehicle and retrofit customers make up a relatively small addressable market of circa £1m-£2m per annum.  Sales in these markets continue.  Existing niche vehicle customers have been maintained and we saw growth with new customers added, principally Singer vehicles and Next EV.

As previously stated we do not plan to allocate engineering time to generating new kits as these resources are focused on supporting the automotive game changing programmes; however, we continue to sell existing kits for Porsche, Nissan GTR, Aston Martin and Ferrari. 

In terms of sales during the year both niche vehicle manufacturers and retrofit distributors finished the year with sales backlogs.   The cause of this backlog was due to manufacturing capacity being prioritised during the factory move to support the large, strategically important OEM programmes in the luxury and performance automotive brakes market. With the factory move complete and the new factory's small volume production (SVP) cell fully operational these backlogs will be cleared during 2017. The SVP's automotive capacity is £2.5m and therefore is now capable of supporting niche vehicle manufacturers and retrofit customer demands going forward.

Automotive OEMs

In addition to the niche customers we have made significant progress on large automotive OEM objectives:

·     Product - we continue to support all our target OEM programmes.  Product design work has progressed well with OEM 6 (Aston Martin) and product testing with OEM 5 has been very encouraging.   A significant amount of work has been completed to progress the product in terms of the environmental requirements of German OEM 3.  A test method and test house has been verified to accelerate the testing.  The test is a lengthy, destructive test and we have been able to define and understand the failure mechanism during the test.  This work has enabled a number of product enhancements to be made and a full suite of statistical results is expected to be available by the end of the calendar year.

·     Quality - the Company was successful in re-certifying the new site to TS 16949 and AS 9100 standards, the certifications could not be simply "carried over" from the previous Ellesmere Port site. Although these certifications are important; our efforts are focused on complying with the German automotive industry quality standard (VDA 6.3) which allows the Company to attain high levels of process control and operational efficiency.  These are key capabilities to managing series volume supply risks and ensure the Company is competitive in the market place.

·     Supply chain security - as with any manufacturing process we are only as good as our supply chain.  Our analysis of the supply chain identified a number of weaknesses that we have been addressing during the year.  We are pleased with progress made and in particular believe the major supply chain risks identified will be resolved during 2017.

·     Manufacturing capability, capacity and cost - our new factory has significantly enhanced our manufacturing capabilities with further additional improvement being implemented.  Our capacity expansion plans continue broadly as planned. The programme to reduce the cost to manufacture as mentioned in the chairman's statement will be completed with the introduction of additional capacity and although there have also been cost increases arising from currency movements on imported materials and sub‐contracted processes we expect these will be more than offset as processes are brought in house.

Aircraft brakes

Despite the delays we continue to work with an international aircraft brake system supplier on an exclusive basis and are supporting our customer's approval processes for the US military programme. Discussions around mitigating delays and support to the supply chain during the approval process are on going.

There has been large investment in engineering work during the year to support the progress made on product refinement, quality, supply chain and capacity improvement.  The demand for this work is clear from our game changing programmes and will be continued during the coming year.

Financial review

In the year ended 31 May 2017, revenues were £700k (2016: £1.4m). This reduction in revenue did not reflect underlying order intake as during the period of limited capacity (the factory move) management took the decision to switch saleable parts into test parts for the extended OEM 3 test programme. These sales have not been lost, total firm orders and customer commitments are for sales of £889k in the new financial year (2016: £427k), the highest visibility of future sales the Company has ever had.

Gross margin improved during the year to 61.0% (2016: 51.6%) due to an improved sales mix of more products at a higher gross margin compared to prior year. 

Research and development costs increased to £1.916m (2016: £1.254m) as a result of the increased testing on the OEM 3 programme.

Losses after taxation increased by 156.1% to £2,172k (2016: £848k) reflecting the reduced gross profit of £275k on the reduction in sales, increased R&D costs of £662k and increased general overheads of £319k, the latter mostly reflecting both the on-going additional costs of the larger new site and £72k of non - recurring costs from the move which were not capitalised.

At 31 May 2017, inventory was £507k (2016: £570k). This modest decrease reflects the initial unwinding of the 31 May 2016 inventory increase in advance of the factory move, but, in the opinion of the Directors, is still too high relative to current sales.

Net cash used in operating activities increased by 34.2% to £1,220k from £909k in the prior year, mainly due to increased losses after tax, offset by R&D tax credit received of £356k.

The Company had a cash balance of £1,532k at 31 May 2017 (2016: £4,777k). In addition, an expected R&D tax credit of over £450k (receivable in December 2017) and claimed but not yet received grants of £118k (of which £80k was received in June) should be due to the Company.

Except for the ceramic furnaces, all the new equipment is on order, with deposits made at prices broadly in line with budget.

The Company is pleased to report that it raised £3.677m (before fees) in an equity fund raising post the year-end and the strong support shown by existing shareholders.

Loss per share was 2.41 pence (2016: loss 1.44 pence)
 

Key performance indicators

The Directors continue to monitor the business internally with a number of performance indicators: order intake, sales output, profitability, supply chain capacity, health and safety, quality and manufacturing cost of automotive discs. A set of business milestones is also updated and reviewed as part of the monthly board meeting.

The Company produces an annual business plan and full monthly forecasts detailing sales, profitability and cash flow to help monitor business performance going forward. These are detailed in the Financial Review above.

Management meetings are held on a weekly basis, all senior managers attend and discuss production, engineering, financial and quality issues. 

Risks and uncertainties

As in previous years the principal risk faced by the Company is considered to be the speed at which our customers and potential customers adopt the new carbon ceramic product technology. Indications are that there is a strengthening desire from our strategic aerospace partner and from a number of volume automotive OEMs to incorporate the Company's product in their respective platforms. This risk is constantly assessed by regular customer review meetings.

The risks associated with bringing the newly purchased furnaces into production are being managed by both a project team that has the experience and skills to deliver this type of project as well as pre-delivery testing at the supplier's premises.  Regular weekly and monthly reviews are held and the project's progress is communicated across the entire company on a regular basis.

In terms of uncertainties, although sales are expected to be flat in the retrofit market, product sales are still expected to grow, modestly in the niche vehicle market. This uncertainty is constantly assessed by regular customer meetings and monitoring the level of enquiries and orders for both the Company's products and industry wide.

In addition, the Company faces the continued uncertainty created by the global economic and political climate.  This changing landscape is constantly assessed and reviewed by both the management team and the board of directors.

In summary, the Company has seen significant progress in its automotive 'game changing' projects and is progressing well with its expansion plans. Further progress on automotive 'game changers' is expected during the remainder of 2017 and 2018. Please refer to note 21 for information on financial risk management and exposure.

Directors and Staff

We would like to thank all our colleagues, management and staff alike, for their hard work and dedication over the past year.

Outlook

The Company expects sales in the financial year 2017-18 to be greater than that of 2016-17 as the numbers will include the approximately £400k of sales switched from last year into the current financial year. Additionally, the Directors expect to see development income from the Aston Martin Valkyrie contract and continuing modest growth in the near OEM market.

Development costs will continue at the current higher level.

Thereafter the Board is confident of delivering substantial sales growth and expects to make further announcements during the year. As noted above when the current capacity expansion programme is complete, in 2018, the Company will have capacity for 20,000 discs facilitating overall sales capacity of approximately £16m.

The Company's board and management is looking forward to the challenges and opportunities of the next years with confidence and excitement.     

David Bundred                                                                                                  Kevin Johnson

Chairman                                                                                                            Chief Executive

18 September 2017

Statement of Total Comprehensive Income

For the year ended 31 May 2017

		2017	2016
		£'000	£'000
Revenue		702	1,362
Cost of sales		(274)	(659)
Gross profit		428	703
Administrative expenses:
Before research and development costs		(1,045)	(654)
Research and development costs		(1,916)	(1,254)
Total administrative expenses		(2,961)	(1,908)
Other operating income		-	84
Operating loss		(2,533)	(1,121)
Financial income		5	2
Financial expenses		-	(35)
Loss before tax		(2,528)	(1,154)
Taxation		356	306
Loss for the year after tax		(2,172)	(848)
Other comprehensive income		-	-
Total comprehensive loss for the year attributable to members		(2,172)	(848)
Loss per ordinary share
Basic and diluted		(2.41p)	(1.44p)

 

Statement of Financial Position

at 31 May 2017

	2017	2017	2016	2016
	£'000	£'000	£'000	£'000
Non-current assets
Property, plant and equipment	2,415		627
Intangibles	136		-
		2,551		627
Current assets
Inventories	507		570
Trade and other receivables	365		939
Cash and cash equivalents	1,532		4,777
		2,404		6,286
Total assets		4,955		6,913
Current liabilities
Other interest bearing loans and borrowings	(12)		(4)
Trade and other payables	(685)		(936)
	(697)		(940)
Non-current liabilities
Other interest bearing loans and borrowings	(352)		(16)
Total liabilities		(1,049)		(956)
Net assets		3,906		5,957
Equity
Share capital		903		901
Share premium		14,390		14,359
Capital reserve		464		464
Retained loss		(11,851)		(9,767)
Total equity attributable to equity shareholders of the Company		3,906		5,957

 

Statement of Changes in Equity

For the year to 31 May 2017

	Share capital	Share premium account	Capital reserve	Retained loss	Total
	£'000	£'000	£'000	£'000	£'000
Balance at 31 May 2015	532	9,186	464	(8,983)	1,199
Comprehensive income for the year
Loss for the year	-	-	-	(848)	(848)
Total comprehensive income for the year	-	-	-	(848)	(848)
Transactions with owners, recorded directly to equity
Shares issued in the year	369	5,531	-	-	5,900
Cost of issue written off to share premium	-	(358)	-	-	(358)
Equity settled share based payment transactions	-	-	-	64	64
Total contributions by and distributions to the owners	369	5,173	-	64	5,606
Balance at 31 May 2016	901	14,359	464	(9,767)	5,957

For the year to 31 May 2017

		Share capital	Share premium account	Capital reserve		Retained loss		Total
		£'000	£'000	£'000		£'000		£'000
Balance at 31 May 2016		901	14,359	464		(9,767)		5,957
Comprehensive income for the year
Loss for the year		-	-	-		(2,172)		(2,172)
Total comprehensive income for the year		-	-	-		(2,172)		(2,172)
Transactions with owners, recorded directly to equity
Shares issued in the year		2	31	-		-		33
Equity settled share based payments		-	-	-		88		88
Total contributions by and distributions to the owners		2	31	-		88		121
Balance at 31 May 2017		903	14,390	464		(11,851)		3,906

 

Statement of Cash Flows

for the year ended 31 May 2017

		2017	2016
		£'000	£'000
Cash flows from operating activities
Loss after tax for the year		(2,172)	(848)
Adjusted for:
Profit on disposal of property plant and equipment		-	(16)
Depreciation and amortisation charge		145	111
Equity settled share-based payment expenses		88	64
Financial expense		-	35
Financial income		(5)	(2)
Taxation		(356)	(306)
		(2,300)	(962)
Changes in working capital
Decrease/(increase) in inventories		63	(253)
Decrease/(increase) in trade and other receivables		579	(572)
Increase in trade and other payables		82	572
		(1,576)	(1,215)
Taxation received		356	306
Net cash used in operating activities		(1,220)	(909)
Cash flows from investing activities
Acquisition of tangible and intangible assets		(2,075)	(265)
Proceeds from disposal of property, plant and equipment		27	26
Net cash used in investing activities		(2,048)	(239)
Cash flows from financing activities
Proceeds from issue of share capital, net of expenses		33	5,142
Payment of finance lease liabilities		(10)	(11)
Interest paid		-	(35)
Net cash generated from financing activities		23	5,096
Net increase in cash and cash equivalents		(3,245)	3,498
Cash and cash equivalents at the beginning of the period		4,777	829
Cash and cash equivalents at the end of the period		1,532	4,777

NOTES TO THE ACCOUNTS 

1.    Basis of preparation and general information

The financial information set out herein does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006.

The financial information for the year ended 31 May 2017 has been extracted from the Company's audited financial statements which were approved by the Board of Directors on 18 September 2017 and which have been delivered to the Registrar of Companies for England and Wales. The reports of the auditor on both these financial statements were unqualified, did not include any references to any matters to which the auditors drew attention by way of emphasis without qualifying their report and did not contain a statement under Section 498(2) or Section 498(3) of the Companies Act 2006.

The information included in this preliminary announcement has been prepared on a going concern basis under the historical cost convention, and in accordance with International Financial Reporting Standards (IFRSs) as adopted by the EU and the International Financial Reporting Interpretations Committee (IFRIC) interpretations issued by the International Accounting Standards Board ("IASB") that are effective or issued and early adopted as at the date of these financial statements and in accordance with the provisions of the Companies Act 2006.

The Company is a public limited company incorporated and domiciled in England & Wales and whose shares are quoted on AIM, a market operated by The London Stock Exchange. The principal activity of the company is the development and manufacturer of carbon ceramic products for the brakes market. The registered office is Image Business Park, Acornfield Road, Liverpool, L33 7UF.

2.    Going concern

The financial statements have been prepared on a going concern basis which the Directors believe to be appropriate.  The Company incurred a net loss of £2,172k during the year however the Directors are satisfied, based on detailed cash flow projections and after the consideration of reasonable sensitivities, that sufficient cash is available to meet the Company's needs as they fall due for the foreseeable future and at least 12 months from the date of signing the accounts. The detailed cash flow assumptions are based on the company's annual budget, prepared and approved by the Board, which reflects a number of key assumptions including; revenue growth, underpinned by current pipeline; customer compliance with payment terms; other receipts of a value and timing consistent with previous years.

Further information regarding the Company's business activities, together with the factors likely to affect future development, performance and position are set out in the Chairman's statement and the Strategic report.  In addition, note 21 to the financial statements includes the Company's objectives, policies and processes for managing its capital; its financial risk management objectives; details of its financial instruments and its exposures to credit risk and liquidity risk.

The Directors believe that the Company is well placed to manage its business risks successfully despite the current uncertain economic outlook.  After making enquiries, the Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. A view which was reinforced by the post year end fund raising of £3.677m before fees. Accordingly, they continue to adopt the going concern basis in preparing the annual report and accounts.

3.    Segmental reporting

The Board has reviewed the requirements of IFRS 8 "Operating Segments", including consideration of what results and information the Chief Executive (the Chief Operating Decision Maker) reviews regularly to assess performance and allocate resources, and concluded that all revenue falls under a single business segment. The Directors consider the business does not have separate divisional segments as defined under IFRS 8. The Chief Executive assesses the commercial performance of the business based upon a single set of revenues, margins, operating costs and assets.

Revenue by geographical destination is analysed as follows:

	2017	2016
	£'000	£'000
United Kingdom	322	199
Rest of Europe	189	835
United States of America	191	313
Rest of World	-	15
	702	1,362
4.     Taxation
Analysis of credit in year UK corporation tax Adjustment in respect of prior years - R&D tax allowances	2017 £'000 - - (356) (356)	2016 £'000 - - (306) (306)

 

 

5.    Loss per ordinary share

The calculation of basic loss per ordinary share is based on the loss for the financial year divided by the weighted average number of shares in issue during the year. Losses and number of shares used in the calculations of loss per ordinary share are set out below:

Basic
		2017	2016
Loss after tax (£)		(2,172,135)	(848,724)
Weighted average number of shares (No. of shares)		90,145,921	58,944,086
Loss per share (pence)		(2.41p)	(1.44p)

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon publication of this announcement, this information is now considered to be in the public domain. 

Enquiries:

Surface Transforms plc                                                                                                  [phone]

Kevin Johnson, CEO

David Bundred, Chairman

Cantor Fitzgerald Europe (Nomad & Joint Broker)                                            [phone]

David Foreman, Callum Butterfield (Corporate Finance)

Mark Westcott, Alex Pollen (Sales)

 finnCap Ltd (Joint Broker)                                                                                           [phone]

Stephen Norcross, Richard Chambers (Corporate Broking)

Ed Frisby Giles Rolls (Corporate Finance)

 For further Company details, visit www.surfacetransforms.com.

 

END

 

 

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