REG - Surface Transforms - Trading and operational progress update

Surface TransformsAnnouncement

Tue 07:00

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RNS Number : 9493R  Surface Transforms PLC  22 July 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")

Trading and operational progress update and AGM presentation

Surface Transforms (AIM:SCE), manufacturers of carbon fibre reinforced ceramic
automative brake discs, announces the following trading and operational
progress updated for the six months ended 30 June 2025 ("H1 2025").

Financial review

The Company has experienced a pivotal change in manufacturing yield and
output, with the benefits of these improvements being realised throughout the
second quarter of 2025 ("Q2 2025"). Revenue for H1 2025 is expected to be
approximately £8.1m (H1 2024: £4.7m), representing an increase of 72%.

Average manufacturing yield increased to 77% in Q2 2025 from 49% in Q1 2025.
The Company has continued to address ramp up challenges and delivered
reductions in process variation and production disruption in Q2 2025,
resulting in significant yield improvements. Work now continues to realise
further yield improvements. It is important to note that at current levels of
average yield, we have sufficient installed manufacturing capacity to deliver
to customer order patterns and become financially sustainable.

Key customers have and continue to be highly supportive of the Company, and
we remain hugely appreciative.  Their support has facilitated the operational
progress achieved during H1 2025 including total cash advances to 30 June 2025
of £12.9m. The Company remains in negotiations regarding the settlement of
these advances, with repayments expected to commence in H2 2025.

Gross cash as at 30 June 2025 was £1.2m (31 December 2024: £0.5m). Careful
cash management has been required to support the operational improvements made
in yield, output and trading. While operational improvements are easing cash
constraints, we remain focused on steadily managing our way through the
remainder of this year with discipline.

The Company continued to draw down from its £13.2m ERDF loan in H1 2025,
solely for use against capital expenditure. As at 30 June 2025, £9.8m had
been drawn down (31 December 2024: £4.9m), with further drawdowns planned
during H2 2025. The balance of the loan facility is expected to be fully
invested by the end of 2025.

Operational progress

The Company is focused on sustaining these new levels of operational
performance with H2 2025 revenues forecast to grow by approximately 20%
compared to H1 2025. The Company anticipates receiving £2.5m of cash in H2
2025 from VAT receipts and R&D tax credits and expects the £12.9m
customer cash advances to reduce by about 20%. As a result, the Company
anticipates gross cash of around £1.0m at the end of 2025.

From a management perspective, Stephen Easton has decided to step down from
his role as COO. He has been replaced by Gareth Laker, effective from 1 August
2025. Gareth has been with Surface Transforms for two years as the
Manufacturing Technology Manager and has been a key member of the team in
delivering our operational improvement in yield and output. Gareth brings his
previous experience as an international automotive plant manager to the role.

Kevin Johnson (CEO) said:

"Since November 2024, the Board has been focused solely on operational
improvement and cash management. During Q2 2025 we started to deliver
sustainable improvements in output, yield and quality and we are cautiously
confident this level of performance will be maintained in the second half of
the year and beyond. We remain mindful that there is room for further
operational improvements which in turn will ease the financial stress the
business has endured.

"The support of customers has been unwavering, and it is hugely appreciated.
Shareholders have remained patient, and we are focused on delivering value to
them. Every member of the Surface Transforms team has shown incredible
resilience through challenging times, and I am delighted that we are now
realising the rewards of their hard work.

"While there remains a lot still to do we are encouraged that a pivotal change
has occurred."

 

AGM presentation

Following the conclusion of the Annual General Meeting ("AGM") today, Kevin
Johnson (CEO) will provide a presentation on this H1 2025 trading and
operational progress. The presentation will be available on the Company's
website.

 

 

For enquiries, please contact:

     Surface Transforms plc                                              +44 151 356 2141
     Ian Cleminson, Non-Executive Chairman
     Kevin Johnson CEO

     Steve Harrison, Interim CFO

     Zeus (Nominated Adviser and Broker)                                 +44 203 829 5000
     David Foreman / James Edis / Ed Beddows (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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