Surface Transforms PLC shares dropped sharply on Friday, after the company said it was cutting its sales guidance for 2023 due to ongoing challenges.

The Liverpool-based carbon‐ceramic automotive brake disc manufacturer said that while some technical problems have been overcome, it is still seeing challenges in its production line.

‘These challenges, which are being resolved, are hindering us from creating sufficient capacity resilience and are constraining our production ramp up,’ it said. ‘In the light of these challenges, the company is now planning its cash needs and customer commitments based on a shallower ramp and now expects to reach the required rate of production in Q1 2024, later than previously forecast.’

Surface Transforms sales guidance for 2023 is £8.6 million, which it said was a cut.

Surface Transforms shares fell 31% to 16.10 pence each in London on Friday morning.

It added: ‘Overall, the outlook for 2024 to 2027 continues to remain very positive reflecting contracts in series production and recent new business announcements, with capacity being installed to fulfil these awards.’

Further, Surface Transforms said it is in advanced talks on a £13 million capital expenditure loan that would be released as new capacity is expended in 2024 and 2025 but it will not be able to use the loan for working capital purposes.

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