Surface Transforms to cut costs as losses widen

HIGH performance brake manufacturer Surface Transforms is continuing to cut costs in a bid to manage widening losses.

In a trading statement the Ellesmere Port-based group, which is one of the world’s two manufacturers of ceramic brake discs for the aircraft and automotive industries, said pre-tax losses were expected to be “materially higher” for the year to May 31.

This was largely down to higher development costs and lower research and development tax credit receipts, said the firm.

In response it is planning to strip out £170,000 of overheads and improve product costs to, “reduce the turnover levels at which the company can break even in cash terms”. The statement did not say if these changes would involve redundancies.

Surface Transforms said annual sales were up 7% to £860,000, however this was less than expected due to delays in securing new contracts. The firm has an order book of £568,000 – 9% higher than at the same point last year.

“Management focus in the current year is to deliver improved operating margins on its improving sales to the current customer base and hence drive the business towards cash break-even levels,” said the statement.

“The board expects an improvement in the company’s performance over the next 12 months and will update shareholders further when the audited accounts are published.”