Surface Transforms plummets on revenue downgrade

(Sharecast News) - Surface Transforms' (ST) shares dived on Tuesday after the company lowered its full-year revenue expectations due to production delays at OEM (original equipment manufacturer) customers.The AIM traded ceramic brake disk manufacturer now expects to report full-year revenues of approximately £1.0m, down from £1.4m for the year before, as revenues of approximately £0.25m that had been budgeted for FY19 are now expected to fall in FY20.The revenues relate to compensation claims for delays with OEM 6's start of production, while three near-OEM customers have also recently suffered either delayed start of production or production problems, threatening £0.35m of FY20 revenues.Kevin Johnson chief executive of ST, said: "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."ST's management also continue to await the outcome of discussions between a landing gear manufacturer, airframe builder and the US Department of Defence regarding its request for pre-funding before undertaking any further work on its aerospace project.The company had previously budgeted £0.2m revenue in FY20 from this project, but has now removed this income from current forecasts.Surface Transforms' shares were down 15.69% at 10.96p at 1143 BST.