Surface Transforms reports higher revenue, smaller losses

(Sharecast News) - Surface Transforms reported a sharp increase in revenue and a substantial reduction in losses in 2025 on Monday, reflecting progress in scaling production and improving operational performance as the group moves towards breakeven.

For the year ended 31 December, revenue rose by around 120% to £18m from £8.2m in 2024, supported by a record second half, when revenue reached £9.9m compared with £8.1m in the first half.

Operating loss before interest and tax narrowed to around £8.7m from £23.4m a year earlier, with second-half losses reducing to £3.5m, compared with a £5.2m loss in the first half.

Gross cash at year-end stood at £1m, including £0.2m restricted for capital expenditure, up from £0.5m at the end of 2024, while customer prepayments totalled £13.3m, slightly higher than the £12.9m reported at the half year.

Capital expenditure increased to £8.6m from £6.1m, with the £13.2m ERDF loan now fully deployed for capital investment in line with management expectations.

Operationally, Surface Transforms said it continued to integrate new equipment, automation and process improvements during the fourth quarter, temporarily impacting yields.

Yield improved to 77% in the final quarter, up from 70% in the third quarter and 49% in the first quarter, although it remained below management's internal target of 80%.

The company said the range of weekly yield performance improved during the second half, indicating that corrective actions were taking effect.

All major improvement programmes were nearing completion, aside from additional furnace capacity, with installation and commissioning of a new furnace well advanced and expected to be operational by the end of the second quarter of 2026.

Looking ahead, the company said demand for its carbon fibre reinforced ceramic brake discs remained strong and that customers had been encouraged by the operational improvements achieved during the year.

While cash remained tight, management said it was manageable.

Surface Transforms said it expected revenue of around £27m in 2026 and was targeting EBITDA breakeven as higher production output and operational efficiencies begin to flow through.

At 1256 GMT, shares in Surface Transforms were down 0.71% at 1.74p.

Reporting by Josh White for Sharecast.com.