Re Contract

Surface Transforms PLC
10 May 2004


RNS Release

10 May 2004

Surface Transforms plc signs new contract with the UK Ministry of Defence

Surface Transforms plc, manufacturer of high-technology carbon ceramic
materials, has been awarded its first contract valued at around £40,000 by the
UK Ministry of Defence (MoD). The contract is for Surface Transforms to develop
its unique carbon fibre reinforced ceramic (CFRC) materials for use in body and
vehicle armour.

The brief is for materials that will protect individuals and vehicles against
repeat hit high-power rifle and cannon fire. This work is expected to be
completed within approximately nine months. Subject to satisfactory product
performance further contract work is expected, leading eventually to full-scale
commercial orders within three years.

Confirmation of the new MoD contract follows Surface Transforms' recent
conditional institutional placing which raised £2.7m after expenses. The placing
provides the Company with the capital to increase its number of development
programmes, including the new MoD body and vehicle armour programme, and to
continue to invest in its technology advantage, staff and production capacity.

Current UK combat armour incorporating ceramic plates is a number of years old
and is becoming dated, particularly in relation to new threats specifically
designed to defeat conventional ceramics.

Preliminary work already completed over the past six months at the Royal
Military College of Science has shown that Surface Transforms' standard CFRC has
dramatically increased close shot-to-shot multi-hit performance compared with
standard alumina ceramic armour plates.

The MoD contract represents a new application for Surface Transforms' CFRC
materials which until now have been predominantly used in friction applications
within the automotive and aerospace industries. Based on current prices for
standard performance ceramic plates, the value of the UK market for body armour
for both replacement (maintenance) and new classified protection requirements is
approximately £0.6m per annum, excluding any larger NATO requirements. For
vehicle armour, the UK market value for replacement ceramics is estimated at
£0.4m per annum and £1.4m per annum for the new Future Rapid Effects System
(FRES) vehicles which are expected to be commissioned from 2007, both excluding
any larger NATO requirements.

The Ministry of Defence commented:

'There is a worldwide concern to provide increased but affordable ballistic
protection to military assets, at decreased weights. A particular problem with
current lightweight solutions which incorporate ceramic materials is one of
limited multi-hit performance.'

Julio Faria, Managing Director of Surface Transforms, commented:

'We are pleased to have won this important contract from the MoD. This
demonstrates the versatility of our materials for uses beyond aircraft and car
brakes. With new funds being injected from the placing, we are now well
positioned to incorporate our materials in a wider range of programmes, as well
as increasing our presence in the key aerospace and automotive markets.'

For enquiries please contact:

Julio Faria                                   Neil Boom/Sophie Betts
Surface Transforms plc                        Gresham PR Ltd.
01928 735 498                                 020 7404 9000

Johnny Townsend/Simon Clements
John East & Partners Limited
020 7628 2200

Details of the Company's business and financial performance and its share price
can be found on the Armshare icon on www.surface-transforms.com

Notes to Editors

Cheshire-based Surface Transforms manufactures and develops high-tech carbon
ceramic materials such as brakes and discs which are for use in high-performance
cars and aeroplanes and in other non-friction applications such as rocket
propulsion systems. Surface Transforms' ceramic materials are lightweight yet
very strong and able to withstand very high temperatures (up to 3000degreesC).



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