Surface Transforms PLC - Liverpool-based manufacturer of carbon-ceramic brake discs for automotive and aircraft applications - Says audit of statutory accounts for 2023 is ongoing, and it expects to publish final results in late June. Says main contributors to the extended timeline are impairments to the carrying value of certain intangible and tangible assets, and revenue recognition delays. The latter mainly relates to revenue generated from engineering, testing and tooling services provided to OEM customers during the contract’s development phase. Regarding impairments, Surface Transforms ‘has applied a significantly higher discount rate in its assessment of its intangible assets and whether there is any indication of impairment’; as for tangible assets it ‘has identified that a particular furnace was not performing to contracted specification’ and does not believe a cost-effective solution is possible. Expects to recognise an estimated £6.2 million non-cash impairments to intangible assets, and £3.0 million to tangible assets. Company also says it has re-assessed its revenue recognition policy, which will result in development revenues being recognised upon completion of system integration by the OEM or when control is passed over for the contracted services, as opposed to in line with work performed and percentage completed. It expects this change to transfer around £2.0 million in total from 2023 into future years.

Current stock price: 1.66 pence, down 20% on Tuesday afternoon in London

12-month change: down 95%

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