Surface Transforms on the up with new contract win

Surface Transforms ticked higher on Thursday after the manufacturer of carbon fibre reinforced ceramic brake discs announced it had won a new contract to supply its product as part of construction of new limited edition car.

The AIM-listed company has been selected as the tier two supplier to provide its carbon ceramic brake discs to a tier one brake system supplier for a UK original equipment manufacturer’s car.

Surface Transform's production is expected to start in the 2018-19 financial year and the car is expected to be produced 2019 to mid 2020.

Including prototype and development revenues, the company expects revenues of about £1m during the production period.

All the road cars in the production run have already been pre-sold to end customers.

This contract is seen as strategically important as it is the company's first mainstream original equipment manufacturing contract success and reduces the company's risks to potential other original equipment manufacturing programme delays.

The company said that this was not one of the five potential contracts it had announced recently to shareholders and said that the delay in the start of production for the contract labelled OEM 1, has not yet been resolved but other potential contract wins are progressing in line with expectations.

Chief executive Kevin Johnson said: "This is another key milestone for the business. It is a significant short term win in its own right at an important period for the company. A tier two contract award for this high profile customer on this prestigious model advances our increasing reputation in the industry, and obviously, while this tier two supplier nomination solely relates to this model, we would hope to build on this foundation to extend our relationship with our tier one customer and original equipment manufacturer in the future."

Shares in Surface Transforms were up 10.64% to 23.65p at 0937 GMT.