Brakes company accelerates towards return to profit
Surface Transforms, the Knowsley-based ceramic brake manufacturer, has said it expects to no longer be loss-making next year after being boosted by a major contract win and positive trading.
The business, which makes brakes for high performance cars and aircraft, saw revenue increase by 55% to £902,000 in the six months to the end of June, up from £583,000 in the prior year period, while loss before tax decreased to £1.451m from £1.525m.
Loss after tax increased to £1.175m from £837,000 partially reflecting inclusion of two R&D tax credits in the comparable prior period ended June 2019.
The company said: “Despite the Covid 19 lockdown, trading has been better than expected. As a result, the company reiterates that it now anticipates current FY 20 revenues will be approximately £2m.”
Surface Transforms said that a contract win with a global automotive vehicle manufacturer worth around £27.5m increases sales expectations by over £3m in 2021 and £8m in 2022 (and the following two years).
“As recently announced, given this contract as well as the expectation of further, as yet unspecified, contract awards, the company is investing in manufacturing support headcount and other costs over the next three years, which will progressively add approximately £2m to annual overheads in 2022 and thereafter.
“Consequently, the company reiterates that it is now forecasting positive profits after tax (including receipt of the R&D tax credit), a year earlier than previously announced, in 2021 and positive operating profit, before interest and tax, in 2022.”
The company added that it continues to expect to announce further contract awards over the next six months.
Chairman David Bundred said: “During the period the company accelerated its progress to becoming a profitable mainstream automotive supplier of carbon ceramic brake discs. This continued progress was achieved against the most difficult economic and operational conditions in recent memory.”