This information communicated within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain. 

28 January 2022

 Surface Transforms plc.

("Surface Transforms" or the "Company")

Pre close trading and operations update

Surface Transforms (AIM: SCE), manufacturers of carbon fibre reinforced ceramic materials, is pleased to provide the following pre close trading and operations update for the year to 31 December 2021 ("FY2021").

Trading update

Revenue for FY2021 grew 20% to £2.4m (2020: £2.0m). Cash at 31 December 2021 was £13.0m; however, this includes a £3.1m irrevocable letter of credit in the name of a furnace manufacturer which will be progressively drawn down, by the supplier, as furnace manufacturing milestones are met. Other interest-bearing loans and asset finance totalled £1.8m (2020: £0.7m), the increase primarily reflecting the Company's acceptance of a local government loan on attractive terms, as described in the Company's announcement released on 24 March 2021.

The Company's final results for FY2021 will be reported in April 2022.

New capital equipment update

The Company is pleased to announce that, at the end of January, daily assembly volumes reached the initial management targets in the production plan required to reach market revenue expectations for 2022. The Company has addressed the specific production issue on the particularly complex furnace described in the 14 December 2021 announcement.  Several satisfactory production batches having now been produced in late December and January.

Following this success, operational focus has moved on.  As with all manufacturing processes the system must be filled, which in our case takes some weeks and this was completed in January.  This system fill and production ramp up involved "downstream" manufacturing stress testing with the objective of identifying and resolving any further capacity constraints and engineering challenges.  This production ramp up is now in line with management targets and manufacturing engineering activity will continue through Q1 and Q2 2022.

Capital markets day

The Company also intends to invite shareholders to see the new equipment on-site on a capital markets day to be held shortly after the FY2021 results have been announced.   Further details will be provided in due course.

David Bundred (Chairman): "This year will be transformational for the Company as we move into profitability. We are delighted with the progress made in January, and by the success the team had in its response to the problematic furnace. Given our order position, the priority is now production, and the Board is confident in the Company's ability to deliver on the excellent opportunity ahead."

For enquiries, please contact:

Surface Transforms plc.                                                                                                 +44 151 356 2141

David Bundred, Chairman

Kevin Johnson, CEO           

Michael Cunningham CFO

Zeus Capital Limited (Nominated Adviser and Joint Broker)                         +44 203 829 5000

David Foreman / Dan Bate / Jordan Warburton (Corporate Finance)

Dominic King (Corporate Broking)

finnCap Ltd (Joint Broker)                                                                                            +44 20 7220 0500

Ed Frisby/Abigail Kelly (Corporate finance)

Richard Chambers / Barney Hayward (ECM)

For further Company details, visit www.surfacetransforms.com

About Surface Transforms

Surface Transforms plc. (AIM:SCE) develops and produces carbon‐ceramic material automotive brake discs. The Company is the UK's only manufacturer of carbon‐ceramic brake discs, and only one of two mainstream carbon ceramic brake disc companies in the world, serving customers that include major OEMs in the global automotive markets.

The Company utilises its proprietary next generation Carbon Ceramic Technology to create lightweight brake discs for high‐performance road and track applications for both internal combustion engine and electric vehicles. While competitor carbon‐ceramic brake discs use discontinuous chopped carbon fibre, Surface Transforms interweaves continuous carbon fibre to form a 3D matrix, producing a stronger and more durable product with improved heat conductivity compared to competitor products; this reduces the brake system operating temperature, resulting in lighter and longer life components with superior brake performance. These benefits are in addition to the benefits of all carbon‐ceramic brake discs vs. iron brake discs: weight savings of up to 70%, longer product life, consistent performance, reduced brake pad dust and corrosion free.

For additional information please visit www.surfacetransforms.com