Surface Transforms PLC on Thursday said it has extended its contract with an unnamed vehicle manufacturer - designated as OEM 8.

The new contract is worth about £100 million, up from £27.5 million in September 2020. It covers production to 2027, as Surface Transforms aims to become the tier one supplier of a carbon ceramic brake disc.

The agreement increases the company’s sales forecast by £4 million in 2023, £11 million in 2024 and 2025 and £20 million in 2026 and 2027.

Surface Transforms needs to accelerate the recruitment and infrastructure actions required to support these much higher sales, it said. The company currently estimates the sales will result in current year overheads, mostly people related, increasing by £2.5 million.

The staffing and infrastructure overheads are currently in line with the previous forecast of approximately £17 million sales for 2023, the Liverpool-based manufacturer of carbon fibre reinforced ceramic materials added.

With the contract, the overall order book of Surface Transforms increases to more than £180 million, rising from around £115 million in December 2021.

‘This important announcement maintains the recent momentum of significant commercial success for our brake discs. This success is of course being accompanied by our parallel focus on installing and commissioning the new plant to produce this huge increase in sales, a project that is continuing apace,’ Chief Executive Officer Kevin Johnson said.

Surface Transforms shares were up 33% at 55.74 pence each in London on Thursday afternoon, though they remain down 27% in the past 12 months.

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