Surface Transforms PLC
19.07.2024 - 12:25:49Surface Transforms PLC: Pre-Close Trading and Operational Update
| Surface Transforms PLC (-) 19-Jul-2024 / 12:25 CET/CEST 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 - £17.5m - 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 £4.6m, including the impact of no pre-production engineering revenues due to the revision to the Company's revenue recognition policy. We anticipate recognising £1.7m 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 £28.0m 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 £2m 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 £5.0m. 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:
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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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