Troubled Liverpool city region supercar brake disc maker Surface Transforms reports widening losses but remains optimistic despite admitting ‘material uncertainty’ about its future. Tony McDonough reports
Carbon fibre brake disc maker Surface Transforms admits there is “material uncertainty that may cast significant doubt over the company’s ability to continue as a going concern”.
However, despite the troubled Knowsley manufacturer reporting widening annual losses chairman Ian Cleminson says the business has shown “incredible resolve” adding the board expects the 2025 financial performance to reflect continued growth.
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 and says its prospective customer pipeline is worth around £700m. However, despite the popularity of its products in 2023 ST experienced what it described as “the most difficult year in the history of the company”.
It has been dogged by issues related to the ramping up of production and those troubles continued into 2024. Earlier in the year the company tested the patience of its investors further by tapping them for an extra £9.5m.
On Tuesday the Alternative Investment Market firm, which employs around 170 people, posted its financial results for the 12 months to December 31, 2024. In a previous trading update ST had already revealed a 13% rise in revenues to £8.5m.
However, the full results reveal pre-tax losses of almost £23.9m, against losses of £20.6m in the previous year.
In the report, Ian Cleminson writes: “The directors acknowledge that uncertainty remains regarding yield performance, cost control, and the timing of commercial agreements.
“As such, there exists a material uncertainty that may cast significant doubt over the company’s ability to continue as a going concern. Should these challenges persist or worsen, they may adversely impact operational performance.”
However, he added: “Notwithstanding the material uncertainty, after due consideration the directors have a reasonable expectation that the company has sufficient resources to continue in operational existence for the period of 12 months.”
He also admitted that transition to full-scale production had placed “significant demands” on its team. The resulting pressure, he added, had led to “notable staff churn, which, while disruptive at times, has also created opportunities to strengthen the organisation”.
Despite the cloud hanging over the business, Ian remains optimistic ST will weather the storm. He explained: “There is no doubt 2024 has been a year of disappointment and frustration.
“Despite this the support of customers has been incredibly strong and reflects the high value placed on our product and technology. The financial and operational assistance that has been forwarded to the company has been both welcomed and key to any progress made.
READ MORE: Metro Mayor urges Chancellor to back New Town plans
“Since November 2024 the board has been focused solely on operational improvement and cash management.
“We are starting to see sustainable improvements in output, yield and quality that gives us a degree of confidence that 2025 will be a much better year. While there remains a lot still to do we are encouraged that a pivotal change has occurred.”
Surface Transforms shares were down more than 7% on early trading on Tuesday to 1.22p.