TIDMSCE
RNS Number : 0754M
Surface Transforms PLC
10 October 2016
Surface Transforms plc
("Surface Transforms" or the "Company")
Preliminary Results and
Notice of Annual General Meeting
Surface Transforms (AIM: SCE) is pleased to announce its
preliminary results for the year ended 31 May 2016. The Company's
Annual Report and Accounts for the year ended 31 May 2016, together
with a notice convening the Company's Annual General Meeting at
finnCap, 60 New Broad Street, London, EC2M 1JJ on Tuesday 29
November 2016 at 11.00 am will be posted to shareholders in due
course. Copies of the Annual Report and Accounts will be available
on the Company's website: www.surfacetransforms.com as from this
posting date.
Highlights
-- Significant, and continuing, progress with automotive
Original Equipment Manufacturers (OEMs) on winning 'game changer'
contracts, including signing a pre production contract with a major
German automotive OEM.
-- Continuing progress on the aerospace contract with production
still expected to commence in early 2018
-- Successful equity placing raised GBP5.5m to finance the
Company's expansion plans. Negotiations since completed on new
55,000 ft(2) factory in Knowsley, Liverpool, providing sufficient
floor space for the production capacity of initially approximately
20,000 discs per annum.
-- Revenues increased by GBP0.3m to GBP1.4m (2015: GBP1.1 m)
-- Sales to retrofit and near OEM customers increased by 33.3% to GBP557k (2015: GBP418k)
-- Gross margin percentage increased to 51.6% (2015: 51.1%)
-- EBITDA (including tax credits and excluding share based
payments) loss of GBP640k (2015: loss of GBP584k)
-- Increased research costs of GBP1,254k (2015:GBP933k)
-- Loss before taxation of GBP1,154k (2015: loss of GBP982k)
-- Loss per share at 1.44p (2015: loss per share of 1.65p)
-- Cash used in operating activities increased by 62.6% to GBP909k (2015: GBP559k)
-- Cash position as at 31 May 2016 of GBP4,777k (2015: GBP829k)
Chairman's Statement
The financial year ended 31 May 2016 has been transformative for
Surface Transforms,
-- improvement of the underlying financial performance - offset by increasing research costs;
-- excellent, and continuing, progress on the "game changing"
aerospace and automotive OEM contracts, including signing a
pre-production contract with an internationally renowned German
sports car manufacturer;
-- completion of negotiations on a new factory site together
with supporting local authority grants and interest free loans.
Orders have been placed, and deposits paid, on the key items of new
capital equipment to support an annual capacity of 20,000 discs
which management anticipate would equate to sales of GBP17m per
year; and
-- GBP5.5m placing and open offer which in part will finance this capital equipment.
Sales in the year rose by 28% to GBP1,362k (2015: GBP1,066k).
This increase was primarily driven by an increase of 55% in sales
to retrofit customers of GBP384k (2015: GBP247k) and a one-off
increase of GBP142k in aerospace development revenues.
Whilst the loss for the year after tax rose to GBP848k (2015:
GBP765k), this was largely attributable to increased research costs
to GBP1,254k (2015: GBP933k) to support both the achievement of the
German Automotive Industry standard (VDA 6.3) and the increasing
activity on the "game changing" contracts, slightly offset by the
subsequent increase in the R&D tax credit to GBP306k (2015:
GBP217k), albeit this increase in "other income" was less than
anticipated as the Company received approximately GBP100k less
research grants than expected. The gross margin percentage and all
other costs were broadly in line with the previous year.
However at this stage of the Company's development, the crucial
issue is revenue growth. In this regard, the Company is pursuing
both aerospace and automotive customer opportunities.
In aerospace the Company is still expecting to commence series
production of a carbon ceramic brake disc package on a US military
aeroplane in early 2018. We expect first financial year ("FY")
revenues of GBP0.5m and future mature production sales of GBP1.3m.
Testing has continued throughout the year with all objectives
having been met. By contrast there has been little progress on the
civil light aircraft opportunity, solely driven by resource
constraints within our customer.
In the automotive market the Company is pursuing two parallel,
complementary but in practice, different revenue strategies:
-- in the short term, retrofit and "near OEM's" are important to
both demonstrating real road mileage experience and reducing "cash
burn". The Company fits retrofit products to road cars already in
service replacing both iron discs and competitor discs. "Near OEMs"
are defined as car assemblers who take existing models,
pre-registration and customise them for higher performance and/or
luxury, as well as companies who build very specialist vehicles.
Individual "near OEM" sales volumes are typically between 10 and
200 cars per year;
-- the longer term game changing OEM contracts on cars generally
costing more than GBP50,000 where the model volumes (on which
contracts are based) are typically between 500 and 5,000 cars per
year. These potential customers are typically well known
international brands.
In respect of the five main automotive manufacturers the Company
is working on or is in discussions with:
OEM 1 (British) Start of production ("SOP") on this limited
edition car had been expected to be in mid-2018, with first
financial year ("FY") sales of GBP0.8m and a further GBP1.2m in the
following FY. For reasons unconnected with Surface Transforms this
performance car customer has extended the vehicle freeze date of
the first model by six months but has stated that this will not
impact the SOP of the car. Self evidently any delay in the SOP
dates causes anxiety about the programme itself. At the very least
it seems increasingly likely that the SOP will slip by six months
and this is now the Company's planning assumption.
OEM 2 (British) SOP is currently scheduled for late 2020 with
first FY sales of GBP0.7m and future mature production sales of
GBP1.1m. This luxury car company continues to test, however it is a
sister company of OEM 3 and is therefore waiting for the OEM 3
tests to finish before contractually committing to Surface
Transforms. Nonetheless the size and weight of this vehicle is such
that the superior heat dissipation characteristic of the Surface
Transforms product is particularly relevant.
OEM 3 (German) As recently announced, the Company has signed a
pre-production technology development agreement with OEM 3. As part
of this process the customer notified the Company that, after
achievement of agreed technical and operational goals, they intend
to introduce Surface Transforms onto a different, higher volume,
model than previously discussed. This change of model impacts the
forecast sales and cash profile. The SOP is now later than forecast
(now September 2019) but the effect is a higher forecast of sales
in FY 2017-18 (higher volume cars need more prototype parts), lower
than forecast sales in 2018-19 (later SOP) but significantly higher
sales thereafter. The details of these numbers are still in
discussion but the Company's planning assumptions now include this
change of model.
The significantly higher volumes of this different model have
capacity implications in Q4 2019 that may require further
investment to meet the needs of other customers (above the
currently planned total 20,000 p.a. planned disc capacity). However
no decisions on capacity to support other customers will be made
without contractual customer commitment from OEM 3.
The testing, process is arduous, but progress is in line with
management expectations and we expect a final decision, on this
model, at the end of Q1 2017.
OEM 4 (German) SOP is currently scheduled for late 2020 with
expected initial FY revenues of GBP1.8m and future mature
production sales of GBP3.8m. As previously announced, this is a
sister company to OEM 3 and therefore, the current testing required
by OEM 3 should not need to be duplicated. OEM 4 sees all the test
data from OEM 3.
It is not clear if the later SOP of OEM 3 will impact OEM 4 but
our revised planning assumption is that this could well be the
case.
OEM 5 (German) This Company is a competitor to OEMs 2, 3 and 4.
SOP is currently scheduled for mid-2019 with expected initial FY
revenues of GBP2.5m and future mature production sales of GBP2.6m.
There has been an acceleration of activity with this customer who
is both aware of their competitors' activities with Surface
Transforms and seeking to ensure they get equality of resource
allocation. No new issues have arisen from recent testing.
In support of these anticipated contract wins the Company is in
the process of moving from its Ellesmere Port site to a new
facility in Knowsley, Liverpool, and increasing floor space from
12,000 ft2 to 55,000 ft2. This new floor-space has a footprint
which could accommodate machines with a capacity for 100,000 discs
per annum. The Company is now in occupation of this site and the
planned move is ahead of schedule. In the period to September 2016
the Company has also now ordered and paid deposits of GBP735k on
the key items of plant totaling GBP2.9m which would support a
capacity of 20,000 discs to be located in the new site. Local
authority grants and interest free loans to the value of GBP500k
have been negotiated, to be offset against the capital expenditure;
the first instalment of the grant income has been received in the
new financial year.
The German automotive companies have requested that the Company
achieve the German automotive quality standard VDA 6.3 before
issuing contracts - this project is well in hand and we expect to
achieve this accreditation within the next six months and in
advance of any contract award.
This capacity expansion has been financed by an equity cash
raise of GBP5.5m and a loan to equity conversion of GBP400k. The
Company would like to thank both existing and new shareholders for
their support in this fundraising.
Strategic Report
Operational Review and Principal Activity
Surface Transforms is a UK based developer and manufacturer of
carbon ceramic products for the brakes market. In these industries
our products are lightweight, extremely durable and highly refined.
They offer better heat dissipation and material strength; resulting
in superior wear life, improved brake pad wear life and weight
reduction compared to our competitor's carbon ceramic products in
the automotive industry and for the aerospace industry they offer
weight reduction, improved brake performance and superior wear
life.
Our strategy is to firstly manufacture and sell high quality
engineered products into the automotive retrofit market and 'near
OEM' market. Although these markets are relatively small it allows
the Company to generate revenues/cash and importantly reduces the
product and supplier risks for the main part of our strategy. The
Company's primary focus is to work closely with major Tier 1
suppliers and OEMs and introduce our products into these large
volume original equipment manufacturers (OEMs).
The key features of our business model are as follows:
-- we engineer, develop and manufacture carbon ceramic brake
products, which deliver high technical performance for the demand
in luxury and performance brakes markets, which we estimate to be,
ultimately, a GBP2 billion per annum market;
-- our product technology offers highly desirable technical
advantages over our competitors and our process technology offers a
highly competitive low cost manufacturing route making our products
price competitive with good margins;
-- to sell a new disruptive product technology the risks need to
be managed. These risks are addressed in partnership with Tier 1
system suppliers and OEMs and through adoption of our products in
the retrofit and niche vehicle car manufacturers;
-- we have an industry recognised high quality product that has been validated by our strategic partners/customers to support product adoption in the key 'game changing' volume markets;
-- our quality management systems follow the automotive and
aerospace quality standards (TS16949 and AS9100); and through
continuous improvement we are developing our system to be compliant
to the German automotive industry quality standard (VDA6.3);
and
-- we are building a new advanced manufacturing plant with a
capacity of approximately 20,000 disc/annum that becomes
operational during 2018 that will then supply the large volume
OEMs.
Our products are protected by a high level of intellectual
property through a combination of patents and mainly Company
process knowhow.
Delivering our objectives:
New product engineering and sales have expanded in the retrofit
and niche vehicle markets. We continue to offer retrofit products
for Porsches, Ferraris and Nissan GTR's. We have added three new
kits to our Porsche range, three new kits for Ferrari 458 and 430
models and our first kit for Aston Martin V8 Vantage.
In addition our tactical objectives relating to the key
automotive market differentiators are advancing well:
-- Product - Engineering support to British OEM 1 continues
albeit with delays to programme. Refinements have been introduced
to delivery to German OEM 3 environmental requirements. Progress is
good and is anticipated to meet the customer's requirements during
the next financial year.
-- Quality - We have maintained our automotive quality standard
(TS16949) and aerospace quality standards (A9100) during the year
and are focused on further improving our business and manufacturing
systems to comply with the German automotive industry quality
standard (VDA6.3). The Company has invested GBP200k towards this
objective, is pleased with the progress made and is on track to
become compliant within the next 6 months. These activities have
also begun to yield significant improvements in the cost of
manufacturing non-conformance. This has been very encouraging and
has also confirmed that further significant improvements can be
made during the next 12 months.
-- Supply chain security and manufacturing capability - Our
expansion plans are progressing well with the Company expecting to
move from its current Ellesmere Port location to its new Knowsley
factory before the end of 2016. The new factory has been designed
using lean manufacturing techniques and will initially have three
manufacturing cells. A small volume production cell which will
continue to support our existing automotive customer and additional
'near OEM' customers. A series production cell which is being
designed and built during 2017 and will supply the first large
volume OEM customer model. An Aerospace cell which will supply our
aerospace customer for their US military aircraft programme. The
factory then has the floor space to support a further four similar
sized series production cells to support future demand. In total
the three manufacturing cells provide a capacity of 20,000 discs
per annum, with the capability to expand the factory to a capacity
of approximately 100,000 discs per annum.
-- Cost - our cost reduction programme has now been fully
incorporated into the series production cell process and is
expected to achieve the target of reducing the cost to manufacture
by over 40%. With the introduction of the series production cell we
will then have completed the cost reduction programme to reduce the
cost to manufacture by over 50%.
In terms of the manufacture and supply of aircraft brakes we
continue our targeted strategy of working with an international
aircraft brake system supplier on an exclusive basis. The two
companies have continued to work together with the aircraft
manufacturer and US Military to progress the qualification,
certification and approval process. Progress has been made and is
expected to continue during 2017 to commence series production in
early 2018.
There has been a large amount of engineering work completed
during the year to support the good progress made for both the OEM
customers and the new factory. The demand for engineering time has
increased further particularly in terms of the quality and
manufacturing requirements for our automotive OEM customers. As
part of the additional GBP200k investment previously mentioned we
are increasing our engineering resources further. The expanded team
will ensure the delivery of:-
-- The new factory in terms of design and building the manufacturing capability; and
-- Series production manufacturing cell meets our automotive OEM
customer requirements, our cost to manufacture target and supply
chain security plan.
By focusing the Company on these key medium and long term
objectives the Company will have the manufacturing capacity to
produce approximately 20,000 discs per annum.
Financial review
In the year ended 31 May 2016, revenues were GBP1.4m (2015:
GBP1.1m). Gross margin improved during the year to 51.6% (2015:
51.1%) due to the sale of more products at a higher gross margin
compared to prior year.
Losses after taxation increased by 10.8% to GBP848k (2015:
GBP765k) due to additional costs in operational and engineering
staff appropriate to continued investment and lower grant income,
while being offset by increases in gross margin and income tax
credit.
At 31 May 2016, inventory was GBP570k (2015: GBP317k). This
increase was due in part due to an increase of work in progress,
and higher volumes of finished product.
Net cash used in operating activities increased by 62.6% to
GBP909k from GBP559k in the prior year, mainly due to increased
losses after tax, offset by R&D tax credit received of
GBP306k.
The Company had a cash balance of GBP4,777k at 31 May 2016
(2015: GBP829k).
Loss per share was 1.44 pence (2015: loss 1.65 pence).
Key performance indicators
The Directors continue to monitor the business internally with a
number of performance indicators: order intake, sales output,
profitability, supply chain capacity, health and safety, quality
and manufacturing cost of automotive discs. A set of business
milestones is also updated and reviewed as part of the monthly
board meeting.
The Company produces an annual business plan and full monthly
forecasts detailing sales, profitability and cash flow to help
monitor analysis performed above business performance going
forward. These are detailed in the Financial Review above.
Management meetings are held on a weekly basis, all senior
managers attend and discuss production, engineering, financial and
quality issues.
Risks and uncertainties
As in previous years the principal risk faced by the Company is
considered to be the speed at which our customers and potential
customers adopt the new carbon ceramic product technology.
Indications are that there is a strengthening desire from our
strategic aerospace partner and from a number of volume automotive
OEMs to incorporate the Company's product in their respective
platforms. This risk is constantly assessed by regular customer
review meetings.
The risks associated with designing and building of a new
factory is being managed by a project team that has the experience
and skills to deliver this type of project. Regular weekly and
monthly reviews are held and the project's progress is communicated
across the entire company on a regular basis.
In terms of uncertainties, product sales are expected to decline
in the race markets but continue to grow in the retrofit and niche
vehicle markets with an increasing number of distributors and niche
vehicles. This uncertainty is constantly assessed by regular
customer meeting and monitoring the level of enquiries and orders
for both the Company's products and industry wide.
In addition, the Company faces the continued uncertainty created
by the global economic and political climate. This changing
landscape is constantly assessed and reviewed by both the
management team and the board of directors.
In summary, the Company has seen significant progress in its
automotive 'game changing' projects and is progressing well with
its expansion plans. Further progress on automotive 'game changers'
is expected during 2017 and 2018.
Directors and Staff
We would like to thank all our colleagues, management and staff
alike, for their hard work and dedication over the past year.
Outlook
The Company expects sales in the FY 2016-17 to be flat when
compared with FY 2015-16 and to also return to a historically more
typical split between first half-year and second half-year sales
than was seen in the current FY 2015-16. As a result the first half
sales of FY 2016-17 will be below the first half sales of FY
2015-16 even if the sales for the year are unchanged.
We expect the factory move to be complete by the end of the
calendar year, ahead of schedule.
However this overall picture masks considerable change between
customer groups:
-- The first half of the FY 2015-16 included "catch up sales"
following a furnace breakdown in May 2015. This "catch up" will not
be repeated in FY 2016-17;
-- The Company expects further growth from near OEM's;
-- The Company continues to expect growth in the retrofit market
albeit at a lower rate than previously anticipated. The Company
will sell retrofit kits that have already been engineered but has
taken the decision to focus scarce engineering resource onto the
"game changers" OEM's, therefore no new kits will be introduced
thereby restricting coverage of this, smaller, market;
-- The Company currently sells into the race market via another
company. We anticipate that sales will fall significantly with this
customer in the forthcoming year; and
-- Development revenues related to aerospace
qualification/certification will reduce significantly until we
begin series supply in early 2018.
Development costs are expected to continue at the current higher
level but not increase against the FY 2015-16 levels.
The projected loss for the FY 2016-17 (the year the grants and
loans in support of capital equipment are received) will increase
by approximately GBP300k when compared with previous projections as
whilst the Company will be recognising this as "other income", it
will be recognised in the income statement on a systematic basis
over the expected useful life of the asset funded. There is no
impact on cash, and the change in future years, by comparison with
previous forecasts, is minimal.
Thereafter the Board is confident of delivering substantial
sales growth and expects to make further announcements during the
year. As noted above when the current capacity expansion programme
is complete, in 2018, the Company will have capacity for 20,000
discs facilitating overall sales of approximately GBP17m. The
prospects pipeline significantly exceeds this number and the
current planning assumption is that the Company would need to
further increase capacity in Q4 2019. There is a two year planning,
furnace manufacturing and customer quality approval lead-time on
capacity installation and therefore decisions may need to be taken
at the end of the next calendar year. However no decisions will be
taken without customer contractual commitments to fill the current
capacity.
The Company's board and management is looking forward to the
challenges and opportunities of the next few years with confidence
and excitement.
David Bundred Kevin Johnson
Chairman Chief Executive
Statement of Total Comprehensive Income
For the year ended 31 May 2016
2016 2015
GBP'000 GBP'000
Revenue 1,362 1,066
Cost of sales (659) (521)
Gross profit 703 545
Administrative expenses:
Before research and development costs (654) (666)
Research and development costs (1,254) (933)
Total administrative expenses (1,908) (1,599)
Other operating income 84 114
Operating loss (1,121) (940)
Financial income 2 -
Financial expenses (35) (42)
Loss before tax (1,154) (982)
Taxation 306 217
Loss for the year after tax (848) (765)
Other comprehensive income - -
Total comprehensive loss for the year attributable to members (848) (765)
Loss per ordinary share
Basic and diluted (1.44p) (1.65p)
Statement of Financial Position
at 31 May 2016
2016 2016 2015 2015
GBP'000 GBP'000 GBP'000 GBP'000
Non-current assets
Property, plant and equipment 627 483
Current assets
Inventories 570 317
Trade and other receivables 939 367
Cash and cash equivalents 4,777 829
6,286 1,513
Total assets 6,913 1,996
Current liabilities
Other interest bearing loans and borrowings (4) (9)
Trade and other payables (936) (379)
(940) (388)
Non-current liabilities
Other interest bearing loans and borrowings (16) (409)
Total liabilities (956) (797)
Net assets 5,957 1,199
Equity
Share capital 901 532
Share premium 14,359 9,186
Capital reserve 464 464
Retained loss (9,767) (8,983)
Total equity attributable to equity shareholders of the Company 5,957 1,199
Statement of Changes in Equity
For the year to 31 May 2016
Share
Share premium Capital Retained
capital account reserve loss Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 31 May 2014 423 7,995 464 (8,242) 640
Comprehensive income
for the year
Loss for the year - - - (765) (765)
Total comprehensive
income for the year - - - (765) (765)
Transactions with owners,
recorded directly to
equity
Shares issued in the
year 109 1,308 - - 1,417
Cost of issue written
off to share premium - (117) - - (117)
Equity settled share
based payment transactions - - - 24 24
Total contributions
by and distributions
to the owners 109 1,191 - 24 1,324
Balance at 31 May 2015 532 9,186 464 (8,983) 1,199
For the year to 31 May 2016
Share
Share premium Capital Retained
capital account reserve loss Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 31 May 2015 532 9,186 464 (8,983) 1,199
Comprehensive income
for the year
Loss for the year - - - (848) (848)
Total comprehensive
income for the year - - - (848) (848)
Transactions with owners,
recorded directly to
equity
Shares issued in the
year 369 5,531 - - 5,900
Cost of issue written
off to share premium - (358) - - (358)
Equity settled share
based payments - - - 64 64
Total contributions
by and distributions
to the owners 369 5,173 - 64 5,606
Balance at 31 May 2016 901 14,359 464 (9,767) 5,957
Statement of Cash Flows
for the year ended 31 May 2016
2016 2015
GBP'000 GBP'000
Cash flows from operating activities
Loss after tax for the year (848) (765)
Adjusted for:
Profit on disposal of property plant and equipment (16) -
Depreciation charge 111 115
Equity settled share-based payment expenses 64 24
Financial expense 35 42
Financial income (2) -
Taxation (306) (217)
(962) (801)
Changes in working capital
(Increase) in inventories (253) (46)
(Increase)/decrease in trade and other receivables (572) 87
Increase/(decrease) in trade and other payables 572 (16)
(1,215) (776)
Taxation received 306 217
Net cash used in operating activities (909) (559)
-------- --------
Cash flows from investing activities
Acquisition of property, plant and equipment (265) (12)
Proceeds from disposal of property, plant and equipment 26 -
Net cash used in investing activities (239) (12)
-------- --------
Cash flows from financing activities
Proceeds from issue of share capital, net of expenses 5,142 1,300
Payment of finance lease liabilities (11) (9)
Interest paid (35) (42)
Net cash generated from financing activities 5,096 1,249
-------- --------
Net increase in cash and cash equivalents 3,948 678
Cash and cash equivalents at the beginning of the period 829 151
Cash and cash equivalents at the end of the period 4,777 829
======== ========
NOTES TO THE ACCOUNTS
1. Basis of preparation and general information
The financial information set out herein does not constitute
statutory accounts as defined in Section 434 of the Companies Act
2006. The financial information for the year ended 31 May 2016 has
been extracted from the Company's audited financial statements
which were approved by the Board of Directors on 7 October 2016 and
which, if adopted by the members at the Annual General Meeting,
will be delivered to the Registrar of Companies for England and
Wales.
The financial information for the year ended 31 May 2015 has
been extracted from the Company's audited financial statements
which were approved by the Board of Directors on 29 September 2015
and which have been delivered to the Registrar of Companies for
England and Wales. The reports of the auditor on both these
financial statements were unqualified, did not include any
references to any matters to which the auditors drew attention by
way of emphasis without qualifying their report and did not contain
a statement under Section 498(2) or Section 498(3) of the Companies
Act 2006.
The information included in this preliminary announcement has
been prepared on a going concern basis under the historical cost
convention, and in accordance with International Financial
Reporting Standards (IFRSs) as adopted by the EU and the
International Financial Reporting Interpretations Committee (IFRIC)
interpretations issued by the International Accounting Standards
Board ("IASB") that are effective or issued and early adopted as at
the date of these financial statements and in accordance with the
provisions of the Companies Act 2006.
The Company is a public limited company incorporated and
domiciled in England & Wales and whose shares are quoted on
AIM, a market operated by The London Stock Exchange. The principal
activity of the company is the development and manufacturer of
carbon ceramic products for the brakes market. The registered
office is Unit 4, Olympic Park, Poole Hall Road, Ellesmere Port,
Cheshire CH66 1ST.
2. Going concern
The financial statements have been prepared on a going concern
basis which the Directors believe to be appropriate. The Company
incurred a net loss of GBP848k during the year however the
Directors are satisfied, based on detailed cash flow projections
and after the consideration of reasonable sensitivities, that
sufficient cash is available to meet the Company's needs as they
fall due for the foreseeable future and at least 12 months from the
date of signing the accounts. The detailed cash flow assumptions
are based on the company's annual budget, prepared and approved by
the Board, which reflects a number of key assumptions including;
revenue growth, underpinned by current pipeline; customer
compliance with payment terms; other receipts of a value and timing
consistent with previous years. Revenues are expected to continue
in the forthcoming year.
Further information regarding the Company's business activities,
together with the factors likely to affect future development,
performance and position are set out in the Chairman's statement
and the Strategic report.
The Directors believe that the Company is well placed to manage
its business risks successfully despite the current uncertain
economic outlook. After making enquiries, the Directors have a
reasonable expectation that the Company has adequate resources to
continue in operational existence for the foreseeable future.
Accordingly, they continue to adopt the going concern basis in
preparing the annual report and accounts.
3. Segmental reporting
The Board has reviewed the requirements of IFRS 8 "Operating
Segments", including consideration of what results and information
the Chief Executive (the Chief Operating Decision Maker) reviews
regularly to assess performance and allocate resources, and
concluded that all revenue falls under a single business segment.
The Directors consider the business does not have separate
divisional segments as defined under IFRS 8. The Chief Executive
assesses the commercial performance of the business based upon a
single set of revenues, margins, operating costs and assets.
Revenue by geographical destination is analysed as follows:
2016 2015
GBP'000 GBP'000
United Kingdom 199 164
Rest of Europe 835 838
United States of America 313 51
Rest of World 15 13
1,362 1,066
4. Loss per ordinary share
The calculation of basic loss per ordinary share is based on the
loss for the financial year divided by the weighted average number
of shares in issue during the year. Losses and number of shares
used in the calculations of loss per ordinary share are set out
below:
Basic
2016 2015
Loss after tax (GBP) (848,724) (765,586)
Weighted average number of shares (No. of shares) 58,944,086 46,449,946
Loss per share (pence) (1.44p) (1.65p)
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014. Upon publication of
this announcement, this information is now considered to be in the
public domain.
Enquiries:
Surface Transforms plc +44 151 356 2141
Kevin Johnson, CEO
David Bundred, Chairman
Cantor Fitzgerald Europe (Nomad & Joint Broker) +44 20 7894
7000
David Foreman, Michael Reynolds (Corporate Finance)
David Banks, Alex Pollen (Sales)
finnCap Ltd (Joint Broker) +44 20 7220 0500
Stephen Norcross, Nikita Jain (Corporate Broking)
Ed Frisby Giles Rolls (Corporate Finance)
For further Company details, visit
www.surfacetransforms.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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(END) Dow Jones Newswires
October 10, 2016 02:00 ET (06:00 GMT)
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