Order book passes £200m at Liverpool city region high performance brake manufacturer Surface Transforms as half-year revenues surge. Tony McDonough reports

High performance brake manufacturer Surface Transforms (ST) says its order book now stands at more than £200m with the company now close to sustained profitability.

Based in Knowsley, ST makes carbon ceramic brake discs for a number of high performance cars. Customers have included Porsche, Ferrari and Nissan. It is currently supplying brake discs for the Aston Martin Valkyrie which retails at £3m.

Last week it announced it had secured a £13m contract to supply its carbon ceramic brake disc to be fitted to an electric vehicle. The identity of the auto manufacturer was not revealed.

On Monday the company, which is listed on the stock exchange’s Alternative Investment Market, published its interim results for the six months ended June 30, 2022. They revealed a 137% surge in revenues to £2.9m and a pre-tax loss of £2.5m.

However, ST has spent the last couple of years preparing for what will be a surge in both revenues and profits in the coming years. It now expects to be profitable for the full year to December 31, 2022.

In the latest set of results it states the order book stands at £190m. But this doesn’t include the deal announced last week which takes the total to £203m. Its prospective contract pipeline (counting expected repeat orders with existing customers) stands at £400m.

There is typically a time lag between the business securing a contract and the start of production. Most contacts are now five years with production usually beginning two years after it is awarded. It has now started production on contracts for the Aston Martin Valkyrie and Koenigsegg Jesko.

ST says it expects at least one new “significant” contract win before the end of 2022. Its report added: “We are in discussions with other new customers, but it is premature to include these prospects in our planning.”

Despite the soaring cost of fuel, the firm has secured fixed-price energy contracts until the second quarter of 2023. After this date the installation of new energy-efficient furnaces is expected to offset any energy price rises.

Chairman David Bundred said: “2022 is the point at which the hard work of the past decade is being successfully converted to company profitability.

“The company is now in series production with three OEMs (original equipment manufacturers) whilst at the same time both winning new contracts and significantly expanding the prospective contract pipeline. 

“We continue to maintain profitability guidance for 2022 and are upgrading guidance for the following three years. The near-term issue is capacity, while maintaining sufficient resilience and the board is currently modelling options to address this. These are exciting times for Surface Transforms.”