Brakes specialist confident on profits performance starting from this year

David Bundred

Specialist brakes maker, Surface Transforms, said the current financial year will see its decade of development work turn to profitability, in announcing its results for the year to December 31, 2021, today.

Revenues of £2.369m, were up from £1.952m, although the loss before tax widened from £2.915m in 2020 to £4.579m in 2021.

But the Knowsley company, which makes brakes for high performance cars and aircraft, is well placed for progress following investment in new equipment, a doubling of its workforce during the year to reflect increased workload, and an oversubscribed fund raising of £19.1m.

Cash at December 31, 2021, was £13m, compared with £1.1m in 2020.

During the reporting period the firm increased its order book by £70m to £115m at end of the year, and added a new major US-based customer to its portfolio.

Since the close of the reporting period, Surface Transforms significantly increased its order book to more than £180m following an extended £70m order with its existing customer, known as OEM 8

It said it also demonstrated the ability to win ‘carry over’ business with existing customers OEM 6 and OEM 5.

Chairman, David Bundred, said: “The 12 months to December 2021 saw continuing game-changing market success. The company won £70m (lifetime value) of new orders in the year, added one of the largest car companies in the world (OEM 10) to its customer portfolio and demonstrated its ability to win additional contracts with existing customers; OEM 6 (£35m lifetime value order) and OEM 5 (£5m lifetime value order). Post the year end, the company added more than £70m to the order book on existing programmes with OEM 8.

“The task in 2022 is to turn these game-changing orders into profitable sales. Consequently, the other major focus in 2021 was the installation and commissioning of the multiple furnaces and machine tools delivered in 2020 – originally described as OEM production cell one – to provide sales capacity of £20m pa. This task was not without its difficulties, leading to production issues towards the year end that have been resolved in the new year.”

He said the company’s Knowsley site currently has sufficient space to accommodate further equipment, that will be ordered in due course, to bring overall sales potential to £75m per annum.

He added: “After a decade of commercial and development activity the forthcoming 2022 year will finally see this work turn to profitability.

“Thereafter and, based solely on orders already awarded, we can be confident of sales growth of more than 20% pa from 2023 to 2025 and would hope to increase that growth rate as we win further contracts in that period.

“The medium term outlook is for a company growing revenue by at least 20% pa and achieving 20% ROS (return on sales).”

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