Surface Transforms PLC

Latest Results (13.06.2024):

Revenue Growth

In the first half of 2023, Surface Transforms PLC reported a revenue increase of 15% to £3.3 million, up from £2.9 million in the same period the previous year. This growth is attributed primarily to the company's OEM customers and related development income, which together represent approximately 75% of the total revenue.

Gross Profit and Operating Loss

Surface Transforms PLC saw a 14% increase in gross profit during the first half of 2023, reaching £2.0 million with a consistent margin of 60%. However, the company experienced an increased operating loss of £4.6 million, primarily due to £2.5 million of non-repeatable outlays aimed at overcoming technical challenges, alongside increased investment in teams, R&D, and depreciation.

Loss Before Tax

The company's loss before tax widened to £5.5 million in the first half of 2023, compared to a loss of £2.5 million in the same period last year. This increase was significantly impacted by non-recurring items including unprecedented energy costs and restructuring expenses, totaling £0.9 million.

Capital Expenditure and Cash Position

Surface Transforms PLC's capital expenditure in the first half of 2023 was £4.8 million, primarily focused on expanding capacity for 2024. Despite these investments, the company's cash position decreased to £4.5 million by the end of June 2023, down from £14.9 million at the end of 2022, largely due to revenue loss from ramp-up challenges and continued capital investments.

Outlook and Strategic Investments

Looking ahead, Surface Transforms PLC is optimistic about the second half of 2023, expecting revenue to significantly exceed that of the first half. The company continues to invest in expanding its manufacturing capacity, with plans to reach £50 million sales capacity in 2024 and £75 million in the following year. The order book remains strong at £290 million, with a prospective contract pipeline now valued at £420 million.