In the past two years, Surface Transforms plc (LON:SCE) has quadrupled its order book, raised monthly sales run rates from £0.2m to £1.0m and expanded its capacity four-fold to a £20m pa sales rate. A 3 November update pointed to production teething troubles. October sales of £1.0m were below prior estimates, so we significantly reduced our 2023 and 2024 estimates. We estimate PAT breakeven for 2H24. Initially from debt, SCE has the resources to finance capital expenditure from internal cash flow to raise its capacity to £150m by 2027 and to grow beyond that as one of only two global

Surface Transforms plc (LON:SCE) interims, yesterday, reported a loss, so the chairman’s statement of “considerable strategic progress” is notable. We concur. The automotive brake market is strong, all the more so in SCE’s market of carbon ceramic discs. SCE’s order book since end-2020 is up nearly six-fold and it makes an explicit statement as to supportive customers and prospects for more orders. Capital investment is in place and operational for our 2023 sales estimates, and there is clear line of sight for £50m p.a. capacity during 2024, with spending already started on the next rise to £75m p.a.

Surface Transforms plc (LON:SCE) final results were announced on 17 April, together with 1Q’23 sales and an update on the now rectified major production hiccough. In November 2022, SCE announced a second OEM 10 contract, the largest for SCE to date. The forward pipeline has been replenished and remains the same. The OEM 10 order commences in 2025, which is normal visibility. OEM 8 comprises the large majority of 2023 and 2024 revenue and was scheduled for a rapid 2022 start of production, but OEM 8 requested a few months’ pause. It has now commenced. SCE’s resolution to the production