CEO of Liverpool city region supercar brake disc maker Surface Transforms reports 63% surge in annual revenues to £8.3m and hails recovery after ‘very difficult 18 months’. Tony McDonough reports

Carbon fibre brake disc manufacturer Surface Transforms (ST) is reporting a 63% surge in annual revenues to £8.3m in 2023 as it finally puts its production issues behind it.

On Monday morning Knowsley-based ST, which is listed on the stock exchange’s Alternative Investment Market, issued a re-close trading and operations update for the year to 31 December 2023.

It is sticking with its forecast of £23m revenues for 2024 as it ramps up production on £390m forward order book. Chief executive Kevin Johnson said he expects further contract wins this year.

“After a very difficult 18 months, and whilst the need to build our resilience continues, we now believe that the worst of our growing pains are behind us. 

“This view is shared by our customers who have agreed their schedules for 2024 which match our assessments of production capability and capacity.”

ST manufactures carbon fibre reinforced ceramic automotive brake discs for high performance cars. Customers of the business include, or have included Porsche, Ferrari and Nissan, AMG, Aston Martin, Jaguar Land Rover and Lamborghini.

In November it said although it had overcome production issues that dogged its operation towards the end of 2022 it still faced challenges on the production line. Before those issues came to light the business was predicting it would become profitable in 2023.

In December ST predicted it would finally move into profit in 2024 and revealed an open offer for new shares in the business was “significantly over-subscribed” and has raised gross proceeds of £2.7m.

This adds to £8.3m raised in a share placing in mid-November and takes the total cash injection to £11m. And ST has also secured a £13.2m loan from the Liverpool City Region Urban Development Fund, taking new funds available to £24.2m.

On Monday it said sales for the fourth quarter were £3m, compared to £2m, £1.9m and £1.4m respectively in the previous three quarters. No new technical problems have arisen in recent months.

Accordingly, focus remains on delivering further operational improvements, capacity installation to remove potential single points of failure, upgrading internal manufacturing processes and further strengthening operational management and supervision.

The business continues to expect to complete the installation of £50m per year sales capacity by mid-year 2024 and £75m capacity by the end of 2025, to support existing contracts, expected growth and to build manufacturing resilience.

Kevin Johnson added: “We continue to be capacity constrained not demand constrained, so our factory expansion remains a crucial task in positioning the company for the future.

“It is therefore pleasing that the recent debt facility provides the foundation for the programme to continue apace.

“At the same time we are continuously improving operations to enhance productivity, thereby driving increased output in 2024, with the new senior leadership team in place to deliver these ongoing improvements in a timely manner.”