Surface Transforms PLC Pre-Close Trading and Operational Update (8688Y)
January 08 2024 - 1:00AM
UK Regulatory
TIDMSCE
RNS Number : 8688Y
Surface Transforms PLC
08 January 2024
8 January 2024
Surface Transforms plc
("Surface Transforms" or "the Company")
Pre-Close trading and operational update
Surface Transforms (AIM:SCE), manufacturers of carbon fibre
reinforced ceramic automotive brake discs, is pleased to provide
the following pre-close trading and operations update for the year
to 31 December 2023 ("FY23").
Trading update
Subject to audit, revenue for FY23 grew 63% to GBP8.3m (2022:
GBP5.1m). Gross cash at 31 December 2023 was GBP6.1m, including the
cash received from the December 2023 equity fundraising.
Additionally as announced on 11 December 2023, the Company has
completed a GBP13.2m loan agreement solely for use against capital
expenditure, none of which had been drawn down at the year end.
Capital expenditure in 2023 was, as forecast, approximately
GBP9m.
The Company expects to report its audited results for FY23 in
mid-April 2024.
Operational update
Sales for the fourth quarter were GBP3.0m, compared to GBP2.0m,
GBP1.9m and GBP1.4m respectively in the previous three quarters. No
new technical problems have arisen in recent months. Accordingly,
focus remains on delivering further operational improvements,
capacity installation to remove potential single points of failure,
upgrading internal manufacturing processes and further
strengthening operational management and supervision.
The Company continues to expect to complete the installation of
GBP50m p.a. sales capacity by mid-year 2024 and GBP75m p.a. sales
capacity by the end of 2025, to support existing contracts,
expected growth and to build manufacturing resilience.
The successful equity fundraise, and new capital expenditure
facility secured in December 2023 has given the Company the ability
to accelerate orders of new capital equipment, and, to this end,
discussions are underway with our equipment suppliers.
Outlook
The Company is maintaining its revenue guidance for 2024 at
GBP23m. Overall, the outlook for 2024 to 2027 continues to remain
very positive reflecting contracts in series production and recent
new business announcements, with capacity being installed to fulfil
these awards.
The Company expects to announce further new contract awards in
H1 2024.
Kevin Johnson (CEO) said "After a very difficult 18 months, and
whilst the need to build our resilience continues, we now believe
that the worst of our growing pains are behind us. This view is
shared by our customers who have agreed their schedules for 2024
which match our assessments of production capability and
capacity.
We continue to be capacity constrained not demand constrained,
so our factory expansion remains a crucial task in positioning the
Company for the future. It is therefore pleasing that the recent
debt facility provides the foundation for the programme to continue
apace. At the same time we are continuously improving operations to
enhance productivity, thereby driving increased output in 2024,
with the new senior leadership team in place to deliver these
ongoing improvements in a timely manner. We want to thank the
entire team throughout the business whose tireless efforts and
skills have fuelled recent progress.".
For enquiries, please contact:
Surface Transforms plc +44 151 356 2141
David Bundred, Chairman
Kevin Johnson CEO
Isabelle Maddock CFO
Zeus (Nominated Adviser and Joint Broker) +44 203 829 5000
David Foreman / Dan Bate / James Edis (Investment
Banking)
Dominic King (Corporate Broking)
Cavendish Capital Markets Ltd (Joint Broker) +44 20 7220 0500
Ed Frisby / Abigail Kelly (Corporate Finance)
Andrew Burdis / Harriet Ward (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
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