Surface Transforms Share Price (SCE)

Details of AGM in the rns of 28th June 2024.

Does anyone know the date of the AGM and the address where it will be held? I'm planning on attending this year.

As expected the share price is a slave to investor emotion, post results. The material sales uncertainty is fully expected but changes nothing commercially. Having led two successful start ups, I would be surprised if the suppliers weren't insisting on proforma terms (ie cash before delivery) as credit insurance would be at best a nominal value. Having qualified accounts won't therefore change anything in this respect.

I was reassured that the Board's expectation of 2024 and 2025 financial performance are unchanged from those described in the May fund raising (which were were the low case from the April RNS):

Quarterly Sales/Effective capacity revenue

Q2-24 - £4m / £7m

Q3-24 - £4.8m / £7m

Q4-24 - £5.8m (EBITDA breakeven on a quarterly basis) / £9m

Q1-25 - £7m (cash flow neutrality on a quarterly basis) / £10m

Manufacturing Yield

Q2-24 - 83%

Q3-24 - 85%

Q4-24 - 86%

According to my workings, cash headroom on this basis would be £2m in Q1-25, which would be the low point (assuming invoice discounting financed 2025 sales growth) and normal 30 days terms with all suppliers were negotiated.

In this game of building businesses, success breeds success as new arrangements that positively affect cash flow can be negotiated eg change of terms of trade with supply base, invoice financing to facilitate aggressive sales growth etc.

I believe that management have all the tools/staff and facilities they need to turn this into a profitable business using existing funds. Despite calls otherwise, they should also let the COO crack on with his job, without the distraction of being given a board position for the next year.

I look forward to tracking the quarterly updates vs the OO document KPIs by way of a scorecard on progress, starting with the H2 update pre-AGM. If they hit these then the share price will re-rate significantly.

I remember that however there's been little update since other than the comment that "it is expected to be installed by the end of 2024". I would infer that there are other issues which have still not been resolved, otherwise we'd have had a "the installation and commissioning of Furnace X is progressing to schedule" update - perhaps with a comment on the stage of the program (I've no idea what's involved, but you get the picture).

We haven't had that, as a result we need something concrete from the board about the installation progress of the furnace, especially given that the last one took a full year longer than expected.

Having clarity of precisely when this furnace will not only be installed, but will be adding to production is absolutely essential if the board wants to build confidence in their investor base that break even, then profitability and finally regular cash generation is coming soon, otherwise the cash in the bank won't last until Christmas and this thing either goes pop, or gets picked up by Brembo for a song.

This was in the the April 9th RNS.............

"The issue with the last furnace relates to our site expansion rather than the machine itself. The protracted negotiations regarding the site expansion have now been concluded enabling the last furnace to progress"