Trading Update

The information communicated within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

Surface Transforms plc

("Surface Transforms" or the "Company")

Contract Announcement & Operational Update

Surface Transforms (AIM: SCE), manufacturers of carbon fibre reinforced ceramic brake discs, is pleased to announce that it has been informed that it has been selected as the tier 2 supplier nomination to supply its carbon ceramic brake discs to a tier 1 brake system supplier for a UK OEM model, with Surface Transform's production expected to start in the financial year 2018-19.

The limited edition car is expected to be produced over the period from the start of 2019 to mid 2020. Including prototype and development revenues the Company anticipates revenues of approximately £1m during this vehicle production period, the first stage of which is the engineering contract on which work has commenced. The Company understands that all the road cars in the production run have already been pre-sold to end customers.

The Directors note that whilst this specific model was not one of the five game changing contracts described in recent shareholder updates, this win is strategically important as it is the Company's first mainstream OEM contract success and reduces the Company's risks to potential other OEM programme delays. In this regard the Directors note the delay in the start of production date, on the contract described in previous updates as "OEM 1", has not yet been resolved but other potential contract awards are progressing in line with management expectations.

Kevin Johnson CEO of Surface Transforms said: "This is another key milestone for the business. It is a significant short term win in its own right at an important period for the Company; a tier 2 contract award for this high profile customer on this prestigious model advances our increasing reputation in the industry; and obviously, whilst this tier 2 supplier nomination solely relates to this model, we would hope to build on this foundation to extend our relationship with our tier 1 customer and OEM in the future."

In support of this nomination, and other expected contract wins, the Company is continuing the move to its higher capacity new factory at Knowsley. Production is now successfully underway at the new factory and the full factory relocation is on schedule for completion by the end of February, as planned.

The Company expects to issue its half-year results and a more detailed update on 13 February 2017.

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For further Company details, visit www.surfacetransforms.com