9th Sep 2019 11:44
(Alliance News) - Surface Transforms PLC on Monday said its loss widened in its recent financial year due to contract delays and volatile demand, as well as higher payroll costs.
The carbon ceramic brake disc manufacturer posted a GBP3.0 million pretax loss for its year ended May 31, widened from GBP2.3 million the year before.
Revenue dropped 29% to GBP1.0 million from GBP1.4 million, driven down but the delay in start of production for a UK original equipment manufacturing partner's one-off hyper car, plus volatility in after-market distributor demand. This combined with the delayed start of production and production problems at three of the firm's smaller OEM customers.
Administrative expenses climbed 16% to GBP3.6 million from GBP3.1 million. Within this, other administrative expenses rose to GBP1.5 million from GBP1.1 million, with GBP150,000 of this due to depreciation and share-based payment charges. Another GBP200,000 or so of this increase was the result of rising payroll costs, with the remainder resulting from insurance and facility costs.
Chair David Bundred said: "The past 15 months, and more particularly the three-month period of contract awards since 31 May 2019, have been transformational in the development of Surface Transforms. The company now has multi-year, multi million revenue contracts that we expect to support break even [earnings before interest, depreciation, taxation, and amortisation] including tax credit during 2020, positive Ebitda including tax credit in 2021 and profit before tax in 2022."
Shares in Surface Transforms were down 0.6% at 19.38 pence in London on Monday morning.
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