Turnover and earnings tumble at Surface Transforms

13th Feb 2017 11:33

(ShareCast News) - Carbon fibre reinforced ceramic materials manufacturer Surface Transforms posted its half-year financial results for the six months to 30 November on Monday, with turnover decreasing to £0.33m from £0.78m in the first half of the prior year.The AIM-traded company said its total comprehensive loss widened to £0.98m, from £0.12m, with £0.31m of that difference related to the late receipt of a tax credit eventually received in January 2017.Its loss before tax widened to £0.98m from £0.43m, and cash at 30 November was £2.7m, down from £4.78m at the start of the period.Surface Transforms reported capital expenditure on property, plant and equipment of £0.68m during the period, which it said was mainly related to the new Knowsley facility, and an increased inventory of £0.19m to £0.76m.Trading remained in line with management expectations, the board said.On the operational front, production was now underway at the new Knowsley factory, the board confirmed, and post period end, the company won its first tier 2 supplier nomination to a UK automotive original equipment manufacturer."Historically, the company has generated increased revenues in the second half of the year, with the near equal split of sales in 2015-16 being unusual and reflecting the issues described above," commented chairman David Bundred."In the current financial year, the company expects to revert to the historic norm."Sales for the current financial year 2016-17 are expected to be comparable with the prior year on a like for like basis, allowing for the sales catch up, which in turn is offset by improved percentage gross margin."Bundred said development spend will at least be maintained at the current higher levels, and the current high cost of off site dynamometer testing and contractors to complete the VDA 6.3 work was putting that budget under strain."Consequently, losses in 2016-17 are expected to be higher than the prior year but within the range of current market expectations."