Surface Transforms looking forward to 2022 with real confidence

Surface Transforms plc (LON:SCE), manufacturers of carbon fibre reinforced brake discs, announced today the below trading and operations update and progress with OEM 8.

Trading and operations update

The Board of Surface Transforms is disappointed to advise that despite considerable growth against prior year, revenue for the year ending 31 December 2021 will be below £3m, significantly short of market expectations.  The shortfall has mainly been as a result of delays in the final commissioning of the upscaled production capacity at Knowsley (in relation to OEM Production Cell One) and the associated start of the anticipated upscaling of commercial revenues expected from December.

Whilst this capacity programme progressed considerably during the year, a series of minor startup challenges has caused output delay, resulted in Q4 output missing target. By December, these issues have been narrowed down to an issue with one particularly complex furnace, which the Board believe will be fully resolved imminently.  Given December is a short month, the Company is unlikely now to recover the sales gap in this financial year.

It is important to note that these sales have not been lost, the key OEM customers have not seen any impact and the revenue gap, whilst proportionately large in 2021, is small in relation to overall 2022 volumes and is expected to be recovered progressively through Q1 and Q2 2022.

The Board recognise that the short-term effect of this is disappointing, but as noted above, believe these operational issues will all be satisfactorily resolved in short order. Accordingly, the Board intend to provide a further operations update in January 2022 and also to provide quarterly updates for a period of time to reassure the market in respect of revenue performance alignment with future market expectations.

Progress on OEM 8

As previously notified, the Company won a lifetime £27.5m sales contract with an expected maturity level of £8m sales per year, commencing, (later than planned) in 2022, with a customer described as OEM 8. Again, as previously announced, the order intake for this car has greatly exceeded the customers original volume expectations and they have been in discussions with all the supply chain to explore the capacity availability for significant volume increases. These discussions are being finalised with all suppliers, with updated contract volumes expected early in the new year.

Production of parts on this contract has commenced at Knowsley in line with current OEM 8 contractual requirements and we make no change to guidance in 2022. Our 2022 capacity investment plan can support the customer’s future increased volume requirements, although delays from the wider supply chain remain a risk.

Further contact awards

The Company is pleased to report continuing progress being made on further contract awards and expects to make a further announcement in the near future. 

David Bundred, Surface Transforms Chairman, said:

“This announcement summarises the broad position of Surface Transforms over the last three months of 2021. Excellent progress continues to be made on the strategic planbut with work still to do on getting the new Knowsley manufacturing plant to the required daily volume all day, every day. It has been a tough period for all the team, but they have progressively dealt with every issue with their usually tenacity and commitment. We are confident that we are almost through this transformational period and, underpinned by the encouraging news from OEM 8, and other expected contract awards, are looking forward to 2022 with real confidence.”

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
Surface Transforms Plc

More articles like this

Surface Transforms Plc

First half revenue up in exciting times for manufacturer

Revenue has increased at a Knowsley-based manufacturer during the first half of its financial year, but pre-tax losses widened. Surface Transforms, which manufactures carbon fibre reinforced ceramic materials, has posted a revenue of £2.8m for the six months

Surface Transforms Plc

Revenues surge at Surface Transforms

Revenues at Surface Transforms, the Knowsley-based high performance brakes manufacturer, has climbed 137%. The company, which makes brakes for high performance cars and aircraft, reported revenue increase to £2.9m for the six months ending June 30, that’s up

Surface Transforms Plc

Aston Martin supplier eyes profits

A supplier to the likes of Aston Martin and McLaren expects to report a profit this year after a decade-long wait. Liverpool-based Surface Transforms, which manufactures carbon ceramic brake discs for the automotive and aircraft industries, said a

Hardman & Co

Surface Transforms its all in the detail (VIDEO)

Surface Transforms plc (LON:SCE) is the topic of conversation when Mike Foster, Analyst at Hardman & Co chats to DirectorsTalk Interviews. Mike summarises the latest Hardman research document published on the back of the company interim results, explains why

Surface Transforms Plc

Surface Transforms analyst Zeus upgrades forecasts

Surface Transforms plc (LON:SCE) has reported solid progress at H1 but more importantly signalled significant upgrades to our sales and profit estimates for future years. Due to better-thanexpected demand from OEM 8, and activity with new customer OEM

Surface Transforms Plc

Surface Transforms order book passes £200m

High performance brake manufacturer Surface Transforms (ST) says its order book now stands at more than £200m with the company now close to sustained profitability. Based in Knowsley, ST makes carbon ceramic brake discs for a number of

Surface Transforms Plc

Surface Transforms selected as a tier one supplier for EV OEM

Surface Transforms, the Knowsley-based specialist high performance brakes manufacturer, today announced it has been selected as a tier one supplier of a carbon ceramic brake disc to a battery electric vehicle automotive company – previously described by Surface

Surface Transforms Plc

Surface Transforms revenue increased 137% to £2.9m

Surface Transforms plc (LON:SCE) manufacturers of carbon fibre reinforced ceramic automotive brake discs, has announced its interims results for the six months ended 30 June 2022. Financial highlights ·    Revenue increased 137% to £2.9m (H1-2021: £1.2m) ·    Cash at 30 June

Surface Transforms Plc

Brake disc firm wins £13m electric car deal

Supercar brake disc maker Surface Transforms (ST) has secured a £13m contract to supply its carbon ceramic brake disc to be fitted to an electric vehicle. Due to start in early 2024, the deal with the unnamed automotive

Surface Transforms Plc

Surface Transforms selected as a tier one supplier for OEM9

Surface Transforms plc (LON:SCE) has announced that it has been notified of its selection as a tier one supplier of a carbon ceramic brake disc to a battery electric vehicle automotive company – previously described by Surface Transforms

Surface Transforms Plc

Watch how MotoGP brakes work i 2022

MotoGP’s official partner for all of its braking systems is Brembo, and the brand sheds a bit of light on the science and technology that comes together and stops the fastest motorcycles in the world. Andrea Pellegrini steps

Surface Transforms Plc

Everything you need to know about Carbon Ceramic Brakes

If you’re even slightly interested in cars, you’ll know just how important the braking system is, and have heard of carbon ceramic brakes. For the everyday driver, not much thought is given to the brakes: if they work,

Surface Transforms Plc

Aston Martin DBX707 review

Plenty of high performance cars have been through my hands over the past three decades, but not many have left the impression that the Aston Martin DBX707 did. There’s no doubt the standard DBX is a mighty beast with a

No more posts to show