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
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn
Hardman & Co

More articles like this

Surface Transforms plc

Merseyside supercar brake disc firm raises £8.3m

Merseyside manufacturer of carbon fibre reinforced ceramic brakes for high performance cars, Surface Transforms (ST), has raised £8.3m through a new share placing. And ST, which operates from a factory in Knowsley and is listed on the Alternative Investment

Hardman & Co

Surface Transforms order book has grown dramatically

In the past two years, Surface Transforms plc (LON:SCE) has quadrupled its order book, raised monthly sales run rates from £0.2m to £1.0m and expanded its capacity four-fold to a £20m pa sales rate. A 3 November update

Surface Transforms plc

Surface Transforms closes successful share placing

Knowsley-based specialist brakes manufacturer, Surface Transforms, has raised gross proceeds of £8.3m from a share placing. The company also intends to raise approximately £2m, before expenses, through an open offer for qualifying shareholders. The placing will fund working

Surface Transforms plc

Surface Transforms outlines fundraising plan

Knowsley-based Surface Transforms, which manufactures carbon fibre reinforced ceramic automotive brake discs, has revealed plans to raise up to £10m for working capital requirements. The lightweight carbon ceramic brake discs Surface Transforms makes are increasingly adopted by welll-known

Surface Transforms plc

Porsche 911 upgrade: Surface Transforms’ braking kit

Surface Transforms has announced the launch of its new Porsche 911, 992 GT3 RS Steel Brake Disc Upgrade Kits. This state-of-the-art upgrade promises to bring unparalleled braking performance to the iconic Porsche model. Why It Matters Braking systems are the lifeline

Surface Transforms plc

Surface Transforms’ new £100m deal

Surface Transforms announced that it has been notified of its selection as a tier-one supplier of a carbon ceramic brake disc to one of its existing mainstream customers described previously as OEM 10, one of the world’s largest automotive original-equipment manufacturers. The selection

Surface Transforms plc

Aftermarket car brake upgrades

Traditionally, the aftermarket has been able to offer improved slowing power because the engineers of mass-produced cars have to fit brakes that fall within a budget set by their company’s accountants. But improved safety legislation and higher customer

Surface Transforms plc

Surface Transforms £100m new business award from OEM 10

Surface Transforms (LON:SCE), manufacturers of carbon fibre reinforced ceramic automotive brake discs, has announced that it has been notified of its selection as a tier one supplier of a carbon ceramic brake disc to its existing mainstream customer described

Surface Transforms plc

Surface Transforms makes considerable progress

Knowsley-based Surface Transforms, which manufactures carbon fibre reinforced ceramic automotive brake discs, has made “considerable strategic progress” during the first half of its financial year, despite widening pre-tax losses. For the six months ended 30 June 2023, the

Surface Transforms plc

Profit & revenue up in H1 for Surface Transforms

Gross profit and revenues both increase during the first half of 2023 (2023H1) which ended June 30, 2023, for Surface Transforms (AIM: SCE). The company, which manufactures carbon fiber reinforced ceramic automotive brake discs, recently announced H1 financials. Financial highlights from the announcement:

Hardman & Co

Surface Transforms “considerable strategic progress”

Surface Transforms plc (LON:SCE) interims, yesterday, reported a loss, so the chairman’s statement of “considerable strategic progress” is notable. We concur. The automotive brake market is strong, all the more so in SCE’s market of carbon ceramic discs.

Surface Transforms plc

Surface Transforms growth in production throughout 2023 is expected to continue

Surface Transforms (LON:SCE) manufacturers of carbon fibre reinforced ceramic automotive brake discs, has provided its unaudited interims results for the six months ended 30 June 2023 (“H1-2023”). Financial highlights: ·    Revenue increased 15% to £3.3m (H1-2022: £2.9m) ·    Gross profit increased

Surface Transforms plc

Building the ultimate Porsche 992 GT3

Surface Transforms plc (LON:SCE) is a manufacturer of next-generation carbon-ceramic brake discs for automotive and aircraft applications and has been certified to IS9001-2000 since 2008 and was certified to TS16949 automotive quality accreditation and AS9100C aerospace quality accreditation in

Surface Transforms plc

UK auto industry momentum continues in August

David Borland, EY UK & Ireland Automotive Leader, comments on the Society of Motor Manufacturers and Traders (SMMT) new car registration figures for August 2023: “There were 85,657 new car registrations in August, representing a 24.4% year-on-year increase.

Surface Transforms plc

Automotive OEM

Surface Transforms works with a number of automotive manufacturers including mainstream OEMs and niche market/low volume car builders, designing and supplying carbon-ceramic brakes for a wide range of application. Surface Transforms is able to manufacture and supply brake

No more posts to show