Surface Transforms plc (LON:SCE), manufacturers of carbon fibre reinforced ceramic materials, has provided the following pre close trading and operations update for the six months to 30 June 2021.
Revenue in H1-2021 grew 34% to £1.2m (H1-2020: £0.9m), exceeding managements’ original expectation that sales in the period would be broadly unchanged from the run rate achieved in H1-2020. As previously announced, revenues are expected to further increase in the final quarter of 2021, following start of production (“SOP”) on the multi-year OEM contracts already awarded to Surface Transforms.
Cash as at 30 June 2021 was £17.2m (31 December 2020: £1.1m) reflecting the successful £19m fund raise (after fees) in February 2021. A tax credit of £0.6m is expected in August and the drawdown of the £1m Liverpool City Region Combined Authority loan in October.
The Company expects to report its interim results for H1-2021 in September 2021.
Progress with potential OEM customers
The Company is pleased to report continuing progress with regard to both customer discussions and product testing; Accordingly, the Board still expect to announce significant further contract wins with both new and existing OEM customers in the current financial year.
New capital equipment
OEM Production Cell One will be ready for the ramp up in sales forecast for the final quarter of 2021. Additionally, following the fund raise, the Company has satisfactorily concluded its discussions with the furnace manufacturers for the next stages of manufacturing expansion and will be issuing both purchase orders and providing deposits totalling £3m across July and August to the furnace and other equipment suppliers.
David Bundred (Chairman) commented: “This encouraging sales performance, does not yet include the impact of previously announced contract wins. As previously reported, we anticipate a ramp up of revenues from our new OEM contracts in the final quarter of 2021. In parallel, we are most encouraged by the strategic progress made on further contract opportunities. Similarly, positive progress has been made with regard to equipment installation. The combination of these factors enable the Company to reiterate that it remains on track to report a profit before tax in 2022, with further significant growth contracted for many years thereafter.”