REG - Surface Transforms - Financing, trading and operations update

Surface TransformsAnnouncement

04/02/2025 14:30

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RNS Number : 8872V  Surface Transforms PLC  04 February 2025

The information communicated within this announcement is deemed to constitute
inside information as stipulated under the Market Abuse Regulations (EU) No.
596/2014 as it forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with the
Company's obligations under Article 17 of MAR. Upon the publication of this
announcement, this inside information is now considered to be in the public
domain.

 

Surface Transforms plc

("Surface Transforms" or "the Company")

Financing, trading and operations update

Surface Transforms (AIM:SCE), manufacturers of carbon fibre reinforced
ceramic automotive brake discs, announces the following financing, trading and
operations update for the year to 31 December 2024 ("FY24").

Financing and working capital

The Company is pleased to advise that key customers remain highly supportive
and engaged in improving the Company's manufacturing yield, output and
financial stability.

As set out in the Company's interim results released on 30 September 2024, the
Company has been in discussions with key customers and suppliers to optimise
payment terms. Furthermore, backing from customers has included increased
pricing, funded manufacturing expertise and cash advances of over £4m in 2025
to support the Company's working capital requirements. Discussions with key
customers continue and any further updates will be made as appropriate in due
course.

Trading update

Subject to audit, revenue for FY24 was £8.2m (2023: £7.3m).

Gross cash at 31 December 2024 was £0.5m with working capital (as noted
above) becoming increasingly constrained. These working capital constraints
significantly impacted both revenue as well as yield in Q4 and trading results
will remain challenged until current constraints are resolved.

Despite the above, capital expenditure of approximately £5.5m continued
during FY24. The Company has a £13.2m loan agreement solely for use against
capital expenditure of which £4.9m had been drawn down at the year end, with
further drawdowns having been made in 2025 (for the majority of the
difference).

Operations update

The Company's priorities remain on operational improvements and tight
management of cash. Cash constraints and supplier restrictions during Q4
impacted the efficiency of operations, resulting in yield being more
inconsistent than of recent prior periods with a weekly range of 52% to 78%
against the average yield target of 86% for Q4.

Kevin Johnson (CEO) said: "There remain numerous challenges to grow output
and revenue at the pace required. The Company alongside customer support is
working through each of these difficulties not least those posed by the cash
constraints which has limited our ability to operate. Frustratingly our
efforts have not yielded the results we expect of ourselves or at the levels
of demand our customers require. As the Company navigates these difficult
times the support of our customers remains steadfast and their desire to see
the Company succeed is highly encouraging and welcome. These Q4 results are
not typical and do not reflect the progress achieved during 2024 as a whole.
We remain optimistic that we can firstly, find a solution to current working
capital constraints and thereafter, achieve the necessary operational volumes
and targets."

 

For enquiries, please contact:

 Surface Transforms plc                           +44 151 356 2141
 Ian Cleminson, Interim Chairman
 Kevin Johnson CEO

 Isabelle Maddock, CFO

 Zeus (Nominated Adviser and Broker)              +44 203 829 5000
 David Foreman / James Edis (Investment Banking)
 Dominic King (Corporate Broking)

About Surface Transforms

Surface Transforms plc. (AIM:SCE) develops and produces 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 cars 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.

The Company holds the London Stock Exchange's Green Economy Mark.

For additional information please visit www.surfacetransforms.com
(http://www.surfacetransforms.com/)

 

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