Surface Transforms: A major quantum production ramp up now secured

Surface Transforms plc (LON:SCE) final results were announced on 17 April, together with 1Q’23 sales and an update on the now rectified major production hiccough. In November 2022, SCE announced a second OEM 10 contract, the largest for SCE to date. The forward pipeline has been replenished and remains the same. The OEM 10 order commences in 2025, which is normal visibility. OEM 8 comprises the large majority of 2023 and 2024 revenue and was scheduled for a rapid 2022 start of production, but OEM 8 requested a few months’ pause. It has now commenced. SCE’s resolution to the production problem comes after half a year’s disruption in this major growth story.

  • 2022 results: Revenue of £5.12m was more than twice 2021 but well below earlier estimates. SCE flagged this disappointment in November 2022 after problems were encountered during October’s planned major rise in production volumes. Cash and the funds for the expansion programme are on track.
  • How we got here: The proof-of-performance has come from a combination of OEM trials, which take many years, and on-road excellence. Commissioning issues have provided evidence of the manufacturing processes’ complexities. These two factors provide high and multi-year hurdles to new competition.
  • Where we are going: There is only one – larger – competitor, BremboSGL. SCE now has fully operational equipment for £20m capacity, taking share in a rapid-growth market. Hard lessons learnt from the high-quantum scale-up assist the next phase to £50m p.a. capacity, for which equipment is now arriving.
  • Risks: This is a rapidly growing market, readily accommodating growth for both suppliers. A major sales increase leads to a (definable) rise in working capital needs. We reiterate what we wrote a year ago: “The successful commissioning of new capacity is now being achieved, but is always a risk.”
  • Investment case: One, profitable, competitor supplies over 90% of the market, with SCE taking share. Single supply was a most anomalous auto OEM position; now SCE also supplies. The combined OEM 8 then OEM 10 orders, while true “game changers”, simply fitted into the broader SCE place in the market expansion. In-house skills were honed by the scale-up disruptions.
Click to view all articles for the EPIC:
Or click to view the full company profile:
Share on facebook
Share on twitter
Share on linkedin
Hardman & Co

More articles like this

Surface Transforms plc

Surface Transforms hires SGL Carbon director as CCO

Surface Transforms has appointed a new chief operating officer, who is set to leave his current company for the new role in early September. The Liverpool-based manufacturer of carbon fibre-reinforced ceramic materials said Stephen Easton, UK managing director

Surface Transforms plc

Surface Transforms names new COO

Surface Transforms, manufacturers of carbon fiber reinforced ceramic automotive brake discs, announced the appointment of Stephen Easton as the new (non-board) Chief Operating Officer, effective September 4, 2023.  Easton joins the company from SGL Carbon where he is currently

Surface Transforms plc

Surface Transforms may be less than a year away from profitability

With the business potentially at an important milestone, we thought we’d take a closer look at Surface Transforms future prospects. Surface Transforms plc, together with its subsidiaries, researches, designs, develops, manufactures and sells carbon ceramic products for the brake

Surface Transforms plc

Surface Transforms appoints Stephen Easton as Chief Operating Officer

Surface Transforms plc (LON:SCE) manufacturers of carbon fibre reinforced ceramic automotive brake discs, has announced the appointment of Stephen Easton as the new (non-board) Chief Operating Officer, effective 4 September 2023.  Stephen joins the Company from SGL Carbon where he is

Surface Transforms plc

Surface Transforms fixes production problems

Liverpool-based Surface Transforms plc said the production problems it reported in January have now been resolved. Surface Transforms is a manufacturer of next-generation carbon-ceramic brake discs for automotive and aircraft applications. In a “production, capacity, and trading update” Surface

Surface Transforms plc

The contribution of F1 in vehicle engineering

From its early beginnings, F1 has always been at the forefront of technology and engineering, with teams constantly looking for ways to gain an advantage over their competitors. This has led to the development of many groundbreaking innovations

Surface Transforms plc

Lanzante Tag Turbo is a Porsche 930 with F1 power

At first glance, it looks like any other well loved Porsche 930. Its charmingly 1970s hue of Copper Brown Metallic paintwork gleams in the Goodwood Motor Circuit paddock, despite the grey, overcast weather at the 80th Members’ Meeting

Surface Transforms plc

Surface Transforms order book rises to £290m

Liverpool-based Surface Transforms plc said it increased the “lifetime value” of its order book by £175 million to £290 million in the year to December 31, 2022. Surface Transforms is a manufacturer of next-generation carbon-ceramic brake discs for

Surface Transforms plc

“Transformational” year at Surface Transforms

The chairman of Knowsley-based ceramic automotive brake disc manufacturer Surface Transforms has said the board is “confident” in achieving profitability in FY23, after a “transitional” year where the company made a number of major investments to grow capacity.

Surface Transforms plc

Surface Transforms now a serious participant in auto world

Brakes manufacturer Surface Transforms has become a “serious participant” in automotive supply chains and has £175m of orders stacked up from major car manufacturers. In a candid statement to the market this morning the company admitted “almost all

Surface Transforms plc

Surface Transforms: The Future of Carbon Ceramic Brakes

Surface Transforms plc (LON:SCE) is a UK-based company that designs, develops, manufactures, and sells carbon ceramic products for the brakes market in the UK and the rest of Europe. The company specializes in carbon ceramic brakes, brake pads, and

Surface Transforms plc

Your Brake questions answered

What are the biggest brakes I can fit on my car? Why are bigger rotors better than smaller rotors? Why are ceramic brakes so expensive? Find out the answers to all these and more as we answer your

Surface Transforms plc

How to break in ceramic brake pads

Brake pads are an important part of reducing speed and ensuring the safety of the occupants and the vehicle. That is why you need to know how to break in ceramic brake pads to improve the accuracy of this safety

No more posts to show