Surface Transforms PLC Trading Update (1146Y)
07 Maggio 2019 - 8:01AM
UK Regulatory
TIDMSCE
RNS Number : 1146Y
Surface Transforms PLC
07 May 2019
The 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.
7 May 2019
Surface Transforms plc
("Surface Transforms" or the "Company")
Trading Update
Surface Transforms (AIM:SCE) provides the following trading and
operational update for the year ending 31 May 2019 ("FY19").
The Board is frustrated to advise that progress on its
compensation claim for delays on SOP with OEM6 have not concluded.
Given the timing of Surface Transforms' financial year end,
revenues of approximately GBP250k that had been budgeted in FY19
are now expected to fall in FY20. In addition, the OEM 6 production
schedule has also been revised, with the build rate being loaded to
the second half of the 2020 calendar year, therefore deferring FY20
revenues into FY21. However, the delayed compensation claim and
phasing will have no impact on the lifetime revenues of the
contract and the total number of cars to be built remains
unchanged
Separately, the Company has three near-OEM customers who have
each recently suffered either delayed start of production ("SOP")
and/or production problems; This deferment of revenues by OEM 6 and
these near OEM customers, as well as increased de stocking by
aftermarket distributors (for Surface Transforms' retrofit market)
mean the Board now expects to report revenue in FY19 of
approximately GBP1.0 million.
The Company continues to have confidence in the significant
potential of the near-OEM segment, none of the delayed sales have
been lost. However the consistent experience of late SOP and
production delays is causing the Company to review the near-OEM
FY20 forecast, which hazards GBP350k of previously forecast FY20
sales.
Surface Transforms continues to believe that it will be able to
announce positive developments on programmes with OEM 5 and the new
model at OEM 6 within the next few months.
As previously reported in the Company's Half Year Results on 26
February 2019, in respect of the Company's aerospace activities,
management continue to await the outcome of discussions between the
landing gear manufacturer, airframe builder and the US DOD on the
Company's request for pre-funding before undertaking any further
work on the project. The Board had previously budgeted GBP200k
revenue in FY20 from this project. Whilst discussions continue,
given the time elapsed already, the Board consider it prudent to
remove this income from current forecasts.
Kevin Johnson CEO commented "it is always disappointing to be
reducing guidance but it is important to stress that none of the
above impacts the future potential business with OEM 5 or OEM 3 or
the new model at OEM 6. Furthermore the bulk of the changes do not
reflect any changes to our ambitions or longer-term expectations in
the aircraft or near OEM-market. The Company continues to see a
significant business in both segments and will continue to
vigorously pursue these opportunities.
"We have modelled the cash on these reduced forecasts and cash
at 31 May 2019 is expected to be approximately GBP1.9m and thanks
to the recent equity fundraise has headroom to reach the period of
cash break even, now mid calendar 2020.
"We continue to believe that we will be able to announce
progress on OEM 5 and the new model at OEM 6 in the near
future."
For enquiries, please contact:
Surface Transforms plc +44 151 356 2141
Kevin Johnson, CEO
Michael Cunningham, CFO
David Bundred, Chairman
Cantor Fitzgerald Europe (Nomad & Joint Broker) +44 20 7894 7000
David Foreman/ Michael Boot (Corporate Finance)
Caspar Shand Kydd/Gregor Paterson/Maisie Atkinson (Sales)
finnCap Ltd (Joint Broker) +44 20 7220 0500
Ed Frisby/Giles Rolls (Corporate Finance)
Richard Chambers (ECM)
The person responsible for arranging the release of this
information, is Kevin Johnson, CEO of the Company.
For further Company details, visit www.surfacetransforms.com
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
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END
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