Trading and operations update

RNS Number : 5334E

Surface Transforms PLC

08 July 2021

 

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

8 July 2021

 Surface Transforms plc.

("Surface Transforms" or the "Company")

Pre close trading and operations update

Progress with potential OEM customers and new capital equipment

Surface Transforms (AIM: SCE), manufacturers of carbon fibre reinforced ceramic materials, is pleased to provide the following pre close trading and operations update for the six months to 30 June 2021 ("H1-2021").

Trading update

Revenue in H1-2021 grew 34% to £1.2m (H1-2020: £0.9m), exceeding managements' original expectation that sales in the period would be broadly unchanged from the run rate achieved in H1-2020. As previously announced, revenues are expected to further increase in the final quarter of 2021, following start of production ("SOP") on the multi-year OEM contracts already awarded to Surface Transforms.

Cash as at 30 June 2021 was £17.2m (31 December 2020: £1.1m) reflecting the successful £19m fund raise (after fees) in February 2021. A tax credit of £0.6m is expected in August and the drawdown of the £1m Liverpool City Region Combined Authority loan in October.

The Company expects to report its interim results for H1-2021 in September 2021.

Progress with potential OEM customers

The Company is pleased to report continuing progress with regard to both customer discussions and product testing; Accordingly, the Board still expect to announce significant further contract wins with both new and existing OEM customers in the current financial year.

New capital equipment  

OEM Production Cell One will be ready for the ramp up in sales forecast for the final quarter of 2021. Additionally, following the fund raise, the Company has satisfactorily concluded its discussions with the furnace manufacturers for the next stages of manufacturing expansion and will be issuing both purchase orders and providing deposits totalling £3m across July and August to the furnace and other equipment suppliers.

David Bundred (Chairman) commented: "This encouraging sales performance, does not yet include the impact of previously announced contract wins. As previously reported, we anticipate a ramp up of revenues from our new OEM contracts in the final quarter of 2021. In parallel, we are most encouraged by the strategic progress made on further contract opportunities. Similarly, positive progress has been made with regard to equipment installation. The combination of these factors enable the Company to reiterate that it remains on track to report a profit before tax in 2022, with further significant growth contracted for many years thereafter."

For enquiries, please contact:

Surface Transforms plc.   [phone]

David Bundred, Chairman

Kevin Johnson, CEO 

Michael Cunningham CFO

Zeus Capital Limited (Nominated Adviser and Joint Broker)  [phone]

David Foreman / Dan Bate / Jordan Warburton (Corporate Finance)

Dominic King (Corporate Broking)

finnCap Ltd (Joint Broker)     [phone]

Ed Frisby/Abigail Kelly(Corporate finance)

Richard Chambers (ECM)

For further Company details, visit www.surfacetransforms.com

About Surface Transforms

Surface Transforms plc. (AIM:SCE) develop and produce carbon ‐ ceramic material automotive brake discs. The Company is the UK's only manufacturer of carbon ‐ ceramic brake discs, and only one of two mainstream carbon ceramic brake disc companies in the world, serving customers that include major OEMs in the global automotive markets.

The Company utilises its proprietary next generation Carbon Ceramic Technology to create lightweight brake discs for high ‐ performance road and track applications for both internal combustion engine and electric vehicles. While competitor carbon ‐ ceramic brake discs use discontinuous chopped carbon fibre, Surface Transforms interweaves continuous carbon fibre to form a 3D matrix, producing a stronger and more durable product with improved heat conductivity compared to competitor products; this reduces the brake system operating temperature, resulting in lighter and longer life components with superior brake performance. These benefits are in addition to the benefits of all carbon ‐ ceramic brake discs vs. iron brake discs: weight savings of up to 70%, longer product life, consistent performance, reduced brake pad dust and corrosion free.

For additional information please visit www.surfacetransforms.com

 

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