Liverpool city region supercar brake disc maker Surface Transforms reveals further losses and admits its ‘pace of growth is significantly behind plan’. Tony McDonough reports

Carbon fibre brake disc maker Surface Transforms (ST) says it is still struggling to accelerate its growth plans as it reports further losses.

On Monday Knowsley-based ST, which is listed on the stock exchange’s Alternative Investment Market, revealed pre-tax-losses of £7.6m for the six months to June 30, wider than the £5.6m of losses for the same period in 2023.

Revenue for the half-year increased 58% to £4.7m. However, chairman Andrew Kitchingman admitted: “These remain difficult times for the company as it works to grow output and revenue.”

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 have continued into 2024. Earlier this year the company tested the patience of its investors further by tapping them for an extra £9.5m.

They had ploughed £11m into the business as recently as November 2023. ST also secured a £13m loan from Liverpool City Region Combined Authority.

Chief executive Kevin Johnson said on Monday: “2024 continues to be a year with contradictory positions. Real progress on scaling up and delivering growth is being made, however the pace of growth is not as we had anticipated.

“Output and revenue have improved post period end, with volumes having more than doubled during Q3 compared to Q2.

“The key drivers for achieving this growth have been the delivery of capacity upgrade projects and process/equipment refinements which are leading to increases in overall manufacturing yield.

“The rate of growth in output and revenue growth is however slower than we had planned. H2 revenues are expected to be circa 40% down on plan, excluding engineering revenues. 

“The key drivers that are resulting in a slower pace of growth are delays to enhancing capacity and also yield improvement projects.”

As a result of the latest setbacks revenues for the full year are now expected to be around £11m which is significantly lower than current market expectations of £17.5m. Original expectations for 2024 had been more than £20m.

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Andrew Kitchingman was appointed as chair on September 16 replacing David Bundred who stepped down from the role after 12 years.

Mr Kitchingman added: “There remain numerous challenges and, following a period of further underperformance expected to continue through Q4, the company will miss current market expectations by a significant margin.

“Cash is constrained at present, and we are working to evaluate all available options to improve this.”