Liverpool city region supercar brake disc maker Surface Transforms sees annual losses more than treble to £20.7m after ‘the most difficult year in the history of the company’. Tony McDonough reports

Supercar brake disc manufacturer Surface Transforms (ST) is reporting annual pre-tax losses of £20.7m in what its chairman described as “the most difficult year in the history of the company”.

Knowsley-based ST, which is listed on the Alternative Investment Market, 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.

On Friday the business released its results for the 12 months to December 31, 2023. While they showed an impressive sales performance and an 81% rise in revenues to £7.3m, the business has been dogged by production issues.

Chairman David Bundred said “overall operational progress simply was not good enough” adding the company had annoyed its automotive customers, due to delays, and angered its investor after it tapped them for more cash.

In November 2023 the business raised £11m from its shareholders, as well as a £13m loan from Liverpool City Region Combined Authority. In spring this year it asked its shareholders for a further £9.5m.

ST, which employed 147 people during the year highlighted three factors which frustrated its production output: inadequate capacity to meet customer demand, high levels of rejected product scrap and staff not being ready to “transition from prototype to volume production”.

David said: “The customer’s response has been what we would have hoped. They have reiterated that they want to buy our product and expect us to fix our operational problems.

“They have been, rightly, critical but have also offered technical support. We remain in continuous dialogue.”

In summary, he added: “The last 12 months have been, arguably, the most difficult in the history of the company. The operational underperformance was a particular disappointment leading to the need for an unplanned cash injection.

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“As previously stated, the board obviously regrets the circumstances that have led to this distressed fund raising and completely understands the frustration and anger of shareholders over the subsequent dilution.

“However, it is important to remind ourselves that the company’s long-term sales and profit potential is unchanged.

“Our product works, is wanted by the marketplace, there is still only one other worldwide competitor, the market is likely to be demand constrained for at least the next five years, and we are continuing to install capacity that will, eventually, reach £150m sales.”