Shares in Surface Transforms PLC sank on Tuesday, after the company said it was continuing to remedy production problems at its Liverpool site and announced a delay to the publication of its 2023 financial results.

Surface Transforms is a Liverpool-based manufacturer of carbon-ceramic brake discs for automotive and aircraft applications. Shares in Surface were down 29% at 6.58 pence per share in London on Tuesday morning.

In the three months to March 31, Surface said it delivered £3.0 million in sales, more than doubled from £1.4 million in the first quarter of 2023.

Surface reported ‘significant improvements’ in its operational performance in the quarter, and said that ‘the single point of failure capacity constraints have now, almost all, been resolved’.

However, the company is still suffering from ‘high levels’ of scrap in its processes, though added that ‘considerable success’ has been achieved in reducing this in recent weeks.

Surface said that installation of new capacity at its Liverpool manufacturing site is ‘proceeding to plan’, with all but one of the furnaces expected to be on site by mid-2024 following ‘protracted negotiations’ over the site’s expansion.

Chief Executive Officer Kevin Johnson said: ‘Our priority in Q1 was a combination of fixing the underlying fundamentals and continuing to improve customer relationships...The team has also made significant progress on the key challenges of building capacity and reducing scrap which is critical to continuing our ramp up and driving revenue growth during 2024 and 2025. Our commitment to building up production capacity, this year and beyond remains absolute.’

The company said the audit of its 2023 financial results is ongoing, and expects to announce these in late May. In January, Surface said that its annual results would be published in mid-April.

Surface’s sales guidance for 2024 remains unchanged at £23 million, which would represent a near three-fold increase on the £8.3 million delivered in 2023.

Chair David Bundred has announced his intention to retire in 2024, having served on the Surface board for 12 years. A search for Bundred’s successor has begun, the company said, and an update will be provided in due course.

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