Liverpool city region supercar brake disc maker Surface Transforms tells investors ‘we now have enough working capital’ after latest share offerings raised £9.5m. Tony McDonough reports

Surface Transforms (ST) chairman David Bundred said he is “humbled” by the support of its shareholders after raising a further £9.5m in working capital.

In early May, David acknowledged the “frustration and anger” of investors who had once again been asked to cough up cash to support the Knowsley-based carbon fibre brake disc maker’s efforts to ramp up production.

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. It is listed on the stock exchange’s Alternative Investment Market.

However, in 2022 the business experienced what it described as “growing pains”. A drive to increase capacity led to “highly specific, but cumulatively significant” production issues with furnaces. This in turn led to scrapped production.

In April this year it said sales in the first quarter of 2024 had been “constrained” due to high levels of scrap from processes that are not yet fully capable. This issue has “absorbed a sizable amount of working capital and cash”.

In a statement to the stock exchange on Friday ST said its latest open offer was “significantly over-subscribed”, with applications in excess of £4.5m (450,000,000 open offer shares), representing a take-up of 226%. of the 200,000,000 available.

As permitted under the terms of the open offer, the board has decided to extend and accept 300,000,000 Open Offer Shares, raising £3m. It is expected that admission and dealings in the 300,000,000 open offer shares will begin at 8am on Tuesday, May 28.

In aggregate, £9.5m gross proceeds will have been raised pursuant to the placing, subscription and open offer, in addition to the £13.2m local authority loan (ringfenced for capital expenditure) announced on December 11, 2023.

David Bundred said: “Against the background of the recent difficult company trading background, we are particularly appreciative, if not humbled, by this shareholders’ support.

“With the combined £22.7m gross proceeds from the £9.5m placing, subscription, and open offer together with the £13.2m loan, the board is now confident that we have sufficient funding for our working capital and capital expenditure needs.”