Merseyside high performance brake disc manufacturer Surface Transforms says its order book now stands at £70m as it starts work on a new £2m Aston Martin supercar. Tony McDonough reports
High performance brake disc manufacturer Surface Transforms (ST) says its order book now stands at £70m as it begin work on a contract for top-end carmaker Aston Martin.
Based in Knowsley, ST has established a niche as a specialist manufacturer of carbon fibre reinforced ceramic brake discs for high performance cars. Its customers have included Porsche, Ferrari and Nissan.
On Monday the company, which is listed on the Alternative Investment Market, published its results for the six months to June 30. In the report it revealed that it had now started production with Aston Martin to deliver brake discs for the limited edition Valkyrie model.
This is a hybrid sports car made in collaboration with Red Bull Racing. There are two versions of the car and only 175 units will be produced. They will retail at more than £2m each and are already sold out.
In early September the business said it was going to transform its Merseyside factory after securing a string of multi-million pound contracts. The company is now reporting a 34% rise in revenues to £1.2m for the first half of 2021.
Gross profit increased by 27% at £700,000. Total administrative expenses rose by 35% to £2.9m as a result of increased customer testing costs, headcount and depreciation in anticipation of the commissioning of one of its production cells. Loss before tax increased to £1.9m from £1.2m last year.
Earlier this year ST completed a successful £19m fundraising as well as securing a £1m Liverpool City Region Combined Authority Future Growth Fund loan, repayable over five years. Its primary objective is to ultimately provide a factory with sales capacity of £75m a year.
Following internal analysis of its operations, and discussions with its furnace supplier partners, it is now updating its manufacturing strategy. Until now ST has separated its factory into individual production cells for each customer. Now the plans is for the entire plant will operate as a single production facility.
This will result in £10m of cost savings following the implementation of the new strategy which is expected to take 18 months to complete. By 2023 this will increase the sales capacity of the business to £50m a year. It will also help the company reduce its carbon footprint by using more environmentally-friendly furnace technology.
The company now expects to enter a period of high growth, partially, on its current order book, and expects to be profitable in 2022. It said it was repeating a statement made by its chief executive Kevin Johnson earlier this month.
He said: “At the time of the fundraising we said that we thought there could be sufficient demand to fill the Knowsley factory by 2025 (£75m sales), albeit these projections are still uncontracted… we have now concluded that we may want this capacity by 2024.”
In the half year report chairman David Bundred added: “The company continues to announce contract wins with new and existing customers and is working on a significant number of unannounced projects. All these customer R&D projects are either going to plan or exceeding expectations.”