25th Sep 2014 07:30
LONDON (Alliance News) - Shares in Surface Transforms PLC jumped in opening trade on Thursday after the company said it has signed a pre-production contract for the supply of its carbon ceramic brake discs to a US military aircraft with an unnamed international aerospace system supplier.
Shares in the company topped the AIM All-Share early Thursday, rising 34% to 10.40 pence.
Surface said the contract will have a modest positive revenue impact in its 2014-15 and 2015-16 financial years, with production sales due to start in the 2016-17 financial year, subject to final qualification and flight testing.
The contract has been signed on a rolling three-year basis, Surface said, and the company estimates sales at contract maturity will be more than GBP1.3 million.
Surface said it and the aerospace company will now approach the aircraft manufacturer and the US Department of Defense in order to secure qualification and get the necessary regulatory approvals for the company to start supplying equipment to the mainstream aerospace market.
In addition, Surface said it is working with the same customer on a separate programme to develop a generic carbon ceramic brake system for use in both civil and military aviation. Surface also said it is making progress with customers in the automotive sector on other "game changer" contracts, on which it intends to provide updates in due course.
"This is a significant announcement for the company following many years of technical development. The contract will positively impact sales this financial year and next, with mature volumes in the 2017/18 financial year," said Surface Chairman David Bundred.
"Furthermore, this prestigious contract provides an important reference point for other customers considering adopting the Surface Transforms technology," Bundred added.
By Sam Unsted; [email protected]; @SamUAtAlliance
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