Surface Transforms Plc (LON:SCE), manufacturers of carbon fibre reinforced ceramic automative brake discs, has announced the following trading and operational progress updated for the six months ended 30 June 2025.
Financial review
The Company has experienced a pivotal change in manufacturing yield and output, with the benefits of these improvements being realised throughout the second quarter of 2025 (“Q2 2025”). Revenue for H1 2025 is expected to be approximately £8.1m (H1 2024: £4.7m), representing an increase of 72%.
Average manufacturing yield increased to 77% in Q2 2025 from 49% in Q1 2025. The Company has continued to address ramp up challenges and delivered reductions in process variation and production disruption in Q2 2025, resulting in significant yield improvements. Work now continues to realise further yield improvements. It is important to note that at current levels of average yield, we have sufficient installed manufacturing capacity to deliver to customer order patterns and become financially sustainable.
Key customers have and continue to be highly supportive of the Company, and we remain hugely appreciative. Their support has facilitated the operational progress achieved during H1 2025 including total cash advances to 30 June 2025 of £12.9m. The Company remains in negotiations regarding the settlement of these advances, with repayments expected to commence in H2 2025.
Gross cash as at 30 June 2025 was £1.2m (31 December 2024: £0.5m). Careful cash management has been required to support the operational improvements made in yield, output and trading. While operational improvements are easing cash constraints, we remain focused on steadily managing our way through the remainder of this year with discipline.
The Company continued to draw down from its £13.2m ERDF loan in H1 2025, solely for use against capital expenditure. As at 30 June 2025, £9.8m had been drawn down (31 December 2024: £4.9m), with further drawdowns planned during H2 2025. The balance of the loan facility is expected to be fully invested by the end of 2025.
Operational progress
The Company is focused on sustaining these new levels of operational performance with H2 2025 revenues forecast to grow by approximately 20% compared to H1 2025. The Company anticipates receiving £2.5m of cash in H2 2025 from VAT receipts and R&D tax credits and expects the £12.9m customer cash advances to reduce by about 20%. As a result, the Company anticipates gross cash of around £1.0m at the end of 2025.
From a management perspective, Stephen Easton has decided to step down from his role as COO. He has been replaced by Gareth Laker, effective from 1 August 2025. Gareth has been with Surface Transforms for two years as the Manufacturing Technology Manager and has been a key member of the team in delivering our operational improvement in yield and output. Gareth brings his previous experience as an international automotive plant manager to the role.
Kevin Johnson, Surface Transforms CEO, said:
“Since November 2024, the Board has been focused solely on operational improvement and cash management. During Q2 2025 we started to deliver sustainable improvements in output, yield and quality and we are cautiously confident this level of performance will be maintained in the second half of the year and beyond. We remain mindful that there is room for further operational improvements which in turn will ease the financial stress the business has endured.
“The support of customers has been unwavering, and it is hugely appreciated. Shareholders have remained patient, and we are focused on delivering value to them. Every member of the Surface Transforms team has shown incredible resilience through challenging times, and I am delighted that we are now realising the rewards of their hard work.
“While there remains a lot still to do we are encouraged that a pivotal change has occurred.”
AGM presentation
Following the conclusion of the Annual General Meeting (“AGM”) today, Kevin Johnson (CEO) will provide a presentation on this H1 2025 trading and operational progress. The presentation will be available on the Company’s website.
