REG - Surface Transforms - Pre-close trading update and operations update

Surface TransformsAnnouncement

31/07/2023 07:00

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RNS Number : 6411H  Surface Transforms PLC  31 July 2023

31 July 2023

  Surface Transforms plc

("Surface Transforms" or the "Company")

 

Pre-Close Trading Statement and Operations Update

 

Surface Transforms (AIM:SCE), manufacturer of carbon fibre reinforced ceramic
brake disc materials is pleased to provide the following trading update for
the six months to 30 June 2023.

As reported at the Company's recent AGM, sales for the six months to 30 June
2023 grew to £3.3m (H1 2022: £2.9m) representing an overall increase of
14%. Within this total, the volume of manufactured discs during the period
increased by more than 80%, reflecting the improvements made in production
during 2023; the remainder of the sales in both periods was pre-production
development income.

Gross cash on 30 June 2023 was £4.5m (31 December 2022: £14.9m). Capital
expenditure in the six months to 30 June 2023 was £5.4m with the balance of
cash movement arising from the the previously announced production issues
resulting in delayed sales and non recurring operational costs.

Progress on operations and capacity

The improvement in June output rates, reported in the AGM statement, has
continued into July. Customer arrears have been reduced over the past six
weeks. Accordingly, the Board maintains its 2023 revenue expectations.

Installation of extra capacity is still on track with a further £3.4m of
capital expenditure expected in the second half of this year. This extra
capacity will provide resilience during the continuing ramp up in the second
half of 2023 and also underpins the projected further near doubling of sales
in 2024.

Outlook

The revenue expectations for 2023 and 2024 are unchanged. The production
problems of the last six months have inevitably had cost and cash
implications. However, cash has been managed by prudent cash management, the
use of some contingencies in the original plan and the phasing of capital
expenditure for the next phase of capacity expansion. Reflecting the Board's
expectation of continuing operational performance, gross cash at 31 December
2023 is now expected to be no worse than £1m lower than previous estimates.

The Board still expects the Company to be profitable in the second half of
2023.

The Company is continuing its work with customers on converting its
prospective contact pipeline into firm orders with further announcements
expected in the current financial year.

Further Announcements

The Company will announce its 2023 interim results on 27 September 2023.

 

For enquiries, please contact:

 

 Surface Transforms plc                                      +44 151 356 2141
 David Bundred, Chairman
 Kevin Johnson CEO

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

 finnCap Ltd (Joint Broker)                                  +44 20 7220 0500
 Ed Frisby / Abigail Kelly (Corporate Finance)
 Andrew Burdis / Barney Hayward (ECM)

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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