DJ Surface Transforms PLC: Pre-Close Trading and Operational Update
Surface Transforms PLC (-)
Surface Transforms PLC: Pre-Close Trading and Operational Update
19-Jul-2024 / 12:25 CET/CEST
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The information contained within this announcement is deemed by the Company to constitute inside information stipulated
under the Market Abuse Regulation (EU) No. 596/2014 as it forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018. Upon the publication of this announcement via the Regulatory Information Service, this inside
information is now considered to be in the public domain.
19 July 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, provides the
following pre-close trading and operations update for the six months to 30 June 2024 ("H1 24").
Sales
Sales guidance for 2024 remains in line with market estimates - GBP17.5m - as current output levels are delivering to our
revised customer needs.
We are pleased to report that production of discs has doubled in the four weeks ended 12 July 2024 from the average
levels achieved over the previous 5 months, and importantly, on a consistent daily basis.
Total sales for H1 24 were GBP4.6m, including the impact of no pre-production engineering revenues due to the revision to
the Company's revenue recognition policy. We anticipate recognising GBP1.7m in engineering sales during H2 24.
We will continue to grow, and our planned rate of growth is not without risk, but the Board believes that we also
remain on track to deliver market estimates for 2025 including GBP28.0m sales, positive EBITDA and operational cash
generation.
Production
Over the last four weeks, we have consistently been achieving record daily and weekly production levels that enable us
to meet our requisite run rates on output to meet full year estimates.
As previously announced, Q2 was impacted by the following production challenges:
?? Supply chain difficulties in April and May caused by working capital constraints. These problems were progressively
resolved in full during June following the recent fund raising.
?? Yields have been lower than expected but have held steady at 75%. We have a clear pathway to further improvements
and expect to achieve the previously guided 86% yield in Q4 2024.
Because of these challenges, both tooling and R&D costs were approximately GBP2m higher in H1 24 than forecast. Whilst
tooling costs are now reducing, the cost of improving yields will continue to be higher than previously forecast for
the full year.
Cash Position
Cash as at 30 June 2024 was GBP5.0m. While we expect this to reduce towards the year end, no further funding is required.
Further Updates
Management will present a more detailed update following the AGM on Tuesday 23 July. We expect to publish the interim
half year accounts in September 2024.
Kevin Johnson (CEO) said "The recent significant increase in daily output levels, over several weeks, is most
encouraging both in terms of its consistency and recent output levels. Capacity constraint is diminishing as a
production impediment, thanks to the reduction of the single points of failure problem. We acknowledge that production
yields, whilst improving, are still below plan. However the issues are understood, we expect to overcome them, and we
are now building these further improvements from this higher baseline
We look forward to meeting shareholders at next week's AGM to provide a fuller update"
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 / 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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Category Code: TST TIDM: - LEI Code: 213800GQHNJPE5O8XO79 Sequence No.: 335383 EQS News ID: 1950187 End of Announcement EQS News Service =------------------------------------------------------------------------------------
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July 19, 2024 06:26 ET (10:26 GMT)
