Merseyside supercar brake disc maker Surface Transforms trims 2024 sales forecast but still says figure could rise by as much as 165% to £22m. Tony McDonough reports
Carbon fibre ceramic brake disc maker Surface Transforms (ST) has trimmed its 2024 sales guidance slightly after shareholders asked for “worst case scenarios”.
As recently as last week the Knowsley-based firm was sticking to its forecast of up to £23m for this year, up from £8.3m in 2023. However, on Wednesday morning the firm, which is listed on the Alternative Investment Market, issued fresh guidance.
It now says sales are anticipated to grow by a minimum of 111% in 2024 and up to 165% compared to 2023. This results in a projected full year 2024 range of £17.5m to £22m.
With the bulk of the year still to come, 2024 sales outlook for ST is dependent on the amount of progress made on reducing scrap, building capacity and delivering to customers.
Chief executive Kevin Johnson said: “We are providing this range of outcomes for the year, in response to a shareholder request for ‘worst case scenarios’. We remain committed to achieving the higher end of this range.”
ST manufactures carbon fibre reinforced ceramic automotive brake discs for high performance cars. Customers of the business include, or have included Porsche, Ferrari, Jaguar Land Rover and Aston Martin. It currently has a forward order book of £390m.
In a trading update last week the firm said it had got on top of the “growing pains” experienced in 2022 and 2023 as it upped production capacity.
However, sales in the first quarter of 2024 had been “constrained” due to high levels of scrap from processes that are not yet fully capable. This issue has “absorbed a sizable amount of working capital and cash”.
Wednesday’s statement said: “Significant progress has been made on reducing scrap and this is expected to continue through 2024. Similarly progress on expanding our capacity during 2024 is advancing.
“As capacity increases from these operational activities it also creates the opportunity to deliver a more favourable product mix with customers. These three activities are all boosting sales and are driving our rapid growth during the year.
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“We have detailed plans in place to continue to drive all three areas with the pace of progress determining a current spread in 2024 sales of approximately 20%.
“As we advance operational activities and deliver to customers we expect the sales range to narrow, and we therefore will provide updates on progress throughout the year.”