8th Feb 07 ARMSHARE update :Link Back to Page 6 Here


Information Archive Folder : http://www.esnips.com/web/SurfaceTransformsInfo/


Main Web Site : http://www.surface-transforms.com/

March 2008 Presentation : Presentation Link


Commerical Overview

Surface Transform plcs core activity is exploiting proprietary technologies to create innovative, lightweight, high energy dissipating braking system materials, which can be commercialised for high-performance applications.

Surface Transforms plc has worked on technology programmes in collaboration with major companies such as AlliedSignal Inc, BAE Systems/Roxel, Dunlop Aerospace and Faiveley

Today, Surface Transforms is commercialising its products for an increasing range of high-performance applications. These include automotive, motorsport and aircraft brakes, for which the company has developed Ceramic brakes with improved friction properties, enhanced lifetime and lower production costs. Other growth areas include aerospace components (principally rocket motors) and anti-ballistic armour.

Key milestones have included:

-A new aircraft brakes development contract (Jan 2004) with a leading US based aircraft brakes maker
-A licensing contract (September 2003) with Dunlop Aerospace to develop and supply CFRC brakes;
-A contract with the UK Ministry of Defence to supply innovative materials that will increase protection against high-power rifle and cannon fire;
-A contract with the United States Airforce Research Laboratory for the supply of prototype CFRC materials for military applications.
-First commercial sales of carbon-ceramic brake discs for installation on the KOENIGSEGG Swedish supercar
-First commercial sales of Carbon Ceramic road car discs to StopTech the California based brake system upgrade specialists.
-First commercial sales of Carbon Ceramic road car discs to MOVIT one of the leading brake after-market upgrade kit suppliers based in Germany.


Not expecting anything over night here but to me it is now at the stage of becoming a good play with potential rewards in 2010 onwards on success.

Gledhill still buying and building their stake in SCE.

Gledhill of course leads to http://www.usggledco.co.uk/

They must see the potential, and must be happy to pick up stock at these levels, makes any future bid for the whole company, and therefore the IP, much cheaper to them the more they get down at these levels.

Going to be very interesting what the weak pound can do for Surface Transforms. After having to warn some time ago about falling sterling values on their US dollar based sales (when it was 2 dollars to 1 pound), the rapidly falling pound must now be making their dollar based sales very much more profitable in sterling terms, especially as its done through distributers, so no US dollar based overheads.

What is of course more interesting is how sales pick up, given the pound is now so low that SCE's products are so much cheaper for anyone outside the UK. What was slowing opportunies due to 2 dollar exchange rate, should now be rapidly increasing opportunites.

On top of this the most obvious competitors are Euro based ones, and so, the pound collapsing just makes SCE more attractive again.

Will any effects of the global slow down be more than compensated by the dollar based sales and increasing opportunities ?

One would guess a supplier can see in advance of anyone else the potential of their customer :

http://www.thebusinessdesk.com/northwest/news/7727-share-watch-supplier-builds-surface-transforms-stake-barclays-sells-torotrack-and-more....html

Share Watch: Supplier builds stake in Surface Transforms;

8th January 2009

By James Graham - Business Correspondent

LEEDS-based auto-parts supplier C Gledhill has increased its holding in Surface Transforms, the Merseyside business that makes high performance braking systems.

C Gledhill, which supplies the Ellesmere Port firm, bought an 8.8% stake in the business from the fund manager Gartmore back in May.

In the latest trade C Gledhill acquired 100,000 ordinary shares on January 6 when they were worth 12p. It now holds 1.85 million shares, or 9.72% of the company.

Put this post on TMF yesterday :


Surface Transforms

EPIC : SCE

Web Site : http://www.surface-transforms.com/

Surface Transforms plc is the UK’s leading manufacturer of ‘next-generation’ carbon fibre reinforced ceramic composite materials (CRFCs). The company’s high-performance products are being commercialised with major industry partners, for an expanding range of innovative global applications – using cutting-edge technology developed by the company.

Applications

• Automotive and motorsport brakes and clutches
• Rocket motor systems
• Rail brakes
• Aircraft brakes and aerospace components
• Ballistics



Results out yesterday : http://www.investegate.co.uk/Article.aspx?id=20090211070000P031D


Nothing unexpected, they have been hit by the worldwide downturn and therefore the reduced purchasing of high performance cars. That is probably a bit of a blow to their plans in all reality.

I had it down as :

2008 Increasing car braking system sales.
2009 Increasing car braking sales + first real revenues from rocket system starting.
2010 Rocket systems really starts to bump up the bottom line

And at any time the aerospace development contracts could go to their next phases, which means higher and higher levels of revenues for SCE.

This should have had them turning their first profits in 2010, and its why I have had 2010 as a turning point year marked down for SCE. As it stands now they are looking at “break even” for 2010 given the downturn in car braking systems, with of course the chance that aerospace could come up trumps any time.

They have done their homework and put in place decent IP protection, and their processes are said to be ahead of most, which is resulting in “quicker and cheaper” to produce.

This is a highly illiquid share, it’s a tech blue sky one, however there is a potential “predator” out there.

Over the past months one of SCE’s suppliers, C.Gledhill Ltd, has been building up a stake, now at near 10%.

Bit of media coverage : http://www.thebusinessdesk.com/northwest/news/7727-share-watch-supplier-builds-surface-transforms-stake-barclays-sells-torotrack-and-more....html

Why are one of the suppliers happily building a stake in their customer ? One assumes they see the potential here.

C.Gledhill Ltd leads me to http://www.usggledco.co.uk/

Armshare does a regular commentary on SCE, http://www.armshare.com

Like I said, its highly illiquid, it’s a very speculative punt, car braking systems are presently being hit due to recession, but rocket systems should be coming through this year and contributing much more in 2010, and aerospace can pop its nose it at any time.

I would take a guess that Gledhill might be making a bid for the company at some stage………and so I remain interested in the short and mid term.

Cash burn is the worry, but is that not always the case with these blue sky tech tiddlers, and will Gledhill provide cash, for a larger slice of the pie ? Certainly a tiddler to watch imv, given the blue sky potential of aerospace, mixed in with more basic mundane revenue generation from car braking systems and rocket systems.

Notice that Gledhill recently increased their stake even further, taking out a seller who had started to crash the price a bit as they sold.

Cannot be too far in the future when a takeover will play out surely.

http://www.investegate.co.uk/Article.aspx?id=20090409150511P41C4



Back on to the Surface Transforms as I was looking for any news, come across this positive write up from a Porsche user, which can only help justify the product for car braking, shame about the present enviroment, but the big thing for late 2009 onwards is Rocket systems growing, so hopefully that will fill the drop off in car systems due to the credit crisis. And for those not into the talk, PCCB is the Porsche own Carbon Ceramic Braking, said to be very expensive and not very long life, which is why things could be very positive for SCE going forward. The SCE system is said to have the longest life, and lowest cost of all CCB systems.


http://www.pistonheads.com/gassing/topic.asp?h=0&t=675872&d=10695.80001&nmt=

Post at 18:46

993rsr
1,236 posts
69 months

Yesterday (18:46)

I have just come back from a visit to the porsche garage and noticed a couple of carrera gts in there i spoke to one of the mechanics and he told me new pads and disks all around would be 27,000.00 you dont want to many bills like that and thats without an oil change.

993rsr will know better than me but i think fearnsport do a steel conversion to avoid such sillyness.


The steels worked well enough but the additional weight was too much of an issue in affecting the handling and feel of the car.

I'm now 1000 miles and two track days into using a set of Surface Transforms Carbon Ceramic rotors. The whole rotor is friction material unlike the laminated PCCB's which will eventually (as mine did) start to de-laminate with extended track use.

The Surface Transforms rotors also have a different fibre length and orientation that increases their durability. They even advocate taking the discs from car to car they last so long!

http://www.surface-transforms.com/

They are now performing as well as the PCCB's and are not fully bedded in yet. At circa 60% of the cost of replacement PCCB's and offering superior lifespan and performance they are an alternative well worth considering.................

1.7m trade at mid price.

Yet more Gledhill buying ? There must come a time when they will launch a bid if its them again adding yet more.

Well the confirmation came in.

26th May 09 http://www.investegate.co.uk/Article.aspx?id=20090526153150P95AD

It was Gledhill again and now they are up to 24.7% holding of the total issued amount of shares.


Comment in the media at the link below :

http://www.thebusinessdesk.com/yorkshire/news/12248-c-gledhill-ups-stake.html



Someone mentioned Julio was associated with Gledhill, if this is so then it makes it even more apparent that a takeover bid is coming before too long, thats if the continued buying and stake raising was not enough of a heads up.


Interesting that Seymour Pierce have just been appointed as Nomad and Broker :

28th May 09 http://www.investegate.co.uk/Article.aspx?id=200905281208459505S


Looks like its just a case of waiting to see how much more Gledhill can mop up on the cheap before the formal offer comes in. It would be very good timing by Gledhill, with Rocket Propulsion system sales due to start "taking off" as such in 2009 and contributing greatly in 2010 onwards then it would be wise for them to get an offer in before that becomes apparent. I would imagine the next release of results will be the worst of any future ones, as sales increase later, so some time before, or after the next results might see the final bid come in.

Expectations, well certainly over 20p a share IMO, it should be well over 30p or more but we will have to wait and see.

Nice contract news out on RNS.

http://www.investegate.co.uk/article.aspx?id=200907300700035004W


Still remain hopeful this high risk blue sky tech stocks will be one that will come good, fingers crossed of course.

http://www.moneyam.com/InvestorsRoom/posts.php?tid=14307&from=1&to=500

Rather than polluting unrelated threads with you ramping - why not play here.

Got their placing done 12th August.

http://www.investegate.co.uk/Article.aspx?id=200908121316493325X


It now boils down to deliverance or not. Rocket systems should contribute H2 of this year and significantly in 2010. Car braking systems will obviously as we know be hit with the credit crisis and therefore reduction in the sales of high performance cars however SCE are pushing to become the best value by reducing costs, which should benefit when things turn around.

According to the background of the placing ( http://www.investegate.co.uk/Article.aspx?id=200907200700129044V ) the money is to pursue a niche opportunity "wishes to accelerate the adoption of the carbon ceramic brake technology in an active niche aircraft programme opportunity.",

One would and should expect this to be a short term fill in for the lack of car braking sales. My expectations prior credit crisis were along the lines of first profits in 2010 financial year, given the set back and if they can get a niche opportunity they may move back to being break even for 2010 (next financial year).

Rocket systems is a bread and butter going forward as should have been car braking systems. The jam for tomorrow has always been mainstream application of their aircraft braking and that continues, so it will be interesting to see what this additional "niche" opportunity is. Those who like the dream would always wish for adoption of their systems on the 787 or A350 for new aircraft, or retrofit kits for older model planes (and a short and simple summary of why carbon ceramics its due to large reductions in weight (and so fuel saving) as you do not need the brake heat sinks. An additonal benefit for planes is the very quick turnaround possible as you are not waiting for overheated standard brakes to cool back down).

So SCE remains a high risk tech stock, one that hopefully is on the verge of finally (within 18 months) getting to break even or a small profit and with plenty of jam tomorrow blue sky potential should one of the big ones drop.

http://www.investegate.co.uk/Article.aspx?id=200908171159405497X

Gledhill now at 29% holding......

Proselenes said:- "...Rocket systems is a bread and butter going forward as should have been car braking systems. The jam for tomorrow has always been mainstream application of their aircraft braking and that continues, so it will be interesting to see what this additional "niche" opportunity is. Those who like the dream would always wish for adoption of their systems on the 787 or A350 for new aircraft, or retrofit kits for older model planes (and a short and simple summary of why carbon ceramics its due to large reductions in weight (and so fuel saving) as you do not need the brake heat sinks. An additonal benefit for planes is the very quick turnaround possible as you are not waiting for overheated standard brakes to cool back down).

So SCE remains a high risk tech stock, one that hopefully is on the verge of finally (within 18 months) getting to break even or a small profit and with plenty of jam tomorrow blue sky potential..."

FWIW, my understanding is that "weight-saving" is fairly small - the undercarriage is enormously heavy, so any "saving" is quite small. I understand the main benefit is that these brakes act more quickly, since they provide "grip" at lower temperatures - this significantly reduces braking-distance while the air-speed is quite high, hence their cooling is "better" albeit briefly. I'm not sure what you mean about not having to wait for the brake to cooldown, since the heat is a result of the energy dissapated; if this is greater (so we understand) then the cooling time will be proportionally longer, under similar conditions. Also the tyres may need inspection sooner... The other advantage is that these discs will withstand greater temperatures without "fade" - and combined with earlier braking the aircraft can use a shorter runway - OR - the aircraft can carry a greater load, etc. . . . . this aspect should be promoted, since this is a direct advantage to the operator.....maybe even making a longer-trip possible by eliminating a "stopover"...

Their car-application is really for high-end customers, since it is enormously expensive and in reality hardly improves your "image" - esp. if the guy behind you doesn't stop as quickly. Ouch.

It does need to get on with it.

Bit of media coverage following the results.


http://www.smallcapnews.co.uk/article/Manufacturers_still_gripped_by_recession_but_positive_signs_are_emerging/8286.aspx

.

RNS Number : 6207A
Surface Transforms PLC
13 October 2009

The commencement of 2.1 million Collaborative R&D Project part funded by grants from the UK Technology Strategy Board ("TSB")

Surface Transforms is pleased to announce the start of a three year, 2.1 million collaborative research and development project. The Technology Strategy Board has agreed to fund the project with a grant of 1.12 million to a consortium of companies led by Surface Transforms.

The aim of this R&D project, with the acronym "Sμrface", is to develop an innovative ceramic disk, using both waste carbon and contemporary manufacturing processes. The objectives are improved friction characteristics and substantially reduced wear with the development of a method that will allow worn ceramic disks to be resurfaced for re-use.

Success in the Sμrface project will enable a much greater flexibility and tolerance in the structure of the core material used in the disc, which will impact directly on reducing cost and increasing performance.

The Company's partners in this collaborative project are:-

* Faiveley Transport Ltd (manufacturer of train braking systems)

* Alcon Components Ltd (brake systems for high performance cars)

* Bentley Motors Ltd (OEM high performance car manufacturer)

* Federal-Mogul Friction Products Ltd (brake pads)

* Loughborough University (specifications, analysis, testing)

Surface Transforms is the lead company and project co-ordinator and will be supplying the proprietary technology relating to the manufacture of carbon ceramic brake discs. The other industrial partners are all technology leaders in their respective fields of innovative friction material technology for use in the transport market.

The project commenced on 1st September 2009 with the contribution from the Technology Strategy Board grant to Surface Transforms estimated at 470,000 over the next three years.

Kevin D'Silva, Surface Transform's Chairman, commented: "This is the second time that the company has been successful in accessing Technology Strategy Board investment finding. We are pleased that the Technology Strategy Board has approved the Company as co-ordinator for this project."

Looks like a Seymour Pierce note is coming out soon, according to this update from Armshare following the news yesterday. That might drive some interest.


http://www.armshare.com


...............The October update reported the start of a 3 year, 2.1 million collaborative R&D project - the Technology Strategy Board is providing a grant of 1.12 million to a consortium of 6 companies led by Surface Transforms - the purpose of the project is to develop an innovative ceramic disk, using both waste carbon and contemporary manufacturing processes, with the objectives of improving friction characteristics and substantially reducing wear - the consortium includes Bentley Motors, Faively Transport (manufacturer of train braking systems), Federal-Mogul and Loughborough University (specifications, analysis, testing) - Surface Transforms is likely to receive 470,000 of the grant over the next 3 years.

Research Standing

Whilst scarcely visible financially, the company has made very good commercial progress over the last 4 years. ArmShare is an advocate of constructing portfolios comprising at least 80% invested in established businesses combining growth and value and up to 20% in a portfolio of earlier stage higher risk businesses considered to have the potential to develop into the former - Surface Transforms is an obvious candidate for the '20%' category of such a portfolio.

The company's recently appointed broker was as 13th October expecting to issue a research note fairly imminently.

The news of the placing yesterday in which Directors and Management took part makes the cynic in me think that indeed in 2010 we shall see a takeover come into effect.

6 to 9 months time ???


http://www.investegate.co.uk/Article.aspx?id=200912080700287036D


.

http://www.prlog.org/10475702-successful-research-programme-allows-high-performance-brake-discs-to-be-manufactured-at-lower-cost.html


PR Log (Press Release) – Jan 05, 2010 –

Carbon composite brake discs provide substantial improvements in both performance and weight compared with traditional iron discs, but the cost of such systems has so far made them largely unaffordable in the majority of applications (including commercial vehicles, trains, industrial equipment and all but the most exotic cars) where their performance characteristics could bring substantial benefits. A UK-based consortium of specialist companies is addressing this challenge by developing new techniques that will allow carbon discs to be made from manufacturing scrap, providing a lower cost, more environmentally friendly solution to very high braking performance.

“Potential applications are wide ranging,” says Federal-Mogul technical manager David Holme, based at the company’s Friction Technology Centre nearDerby in the UK. “As well as demand for reduced weight to cut CO2 emissions in the automotive industry, there is a need for lighter weight, higher performance braking systems in the rail industry and for brakes offering greater consistency across a range of process industries. If we can match or exceed the performance of today’s best systems, but at a much lower cost, the benefits will be substantial.”

The project, called Rebrake, covers the development of brake discs made from recycled carbon and the development by Federal-Mogul of compatible pad materials. It is supported by investment from the government-backed Technology Strategy Board. “The programme has recently passed a major gateway by successfully manufacturing small disc samples that prove the concept, so we are already moving on to the manufacture and testing of full-scale prototypes,” says Holme. “These will be tested on dynamometers and cars using the pad formulations developed by Federal-Mogul. Following further refinement, the new system will be benchmarked against current best-in-class products early in 2010."

Other partners in the project are Surface Transforms (a manufacturer of advanced ceramic discs); AP Racing (a specialist in very high performance disc brake systems); Faiveley Transport (a rail industry brake technology specialist); Wichita Clutch (industrial applications brake and clutch specialist); Advanced Composites Group (the main advisor and provider of carbon scrap) and Meggitt Aircraft Braking Systems (bringing substantial experience in carbon applications for aircraft braking). The academic partner is Loughborough University, which is responsible for much of the early development work.

Applications outside the automotive industry

Rail is typical of many industries in which conventional iron rotor discs are reaching the limit of their performance. There are also weight issues, because the unsprung mass of the bogie assembly is a source of loading which is approaching the design limit, even of specially laid tracks, leading to damage to the tracks and restrictions in speed and payload. Changing to ceramic composite brakes can save 260 kg per bogie, allowing trains to run faster on a given track for the same load, with savings in fuel consumption and CO2 emissions per tonne carried.

Paper converting machinery is one of several industrial applications that place unusual demands on braking systems, often making consistent friction properties difficult to achieve with conventional technologies. In a paper mill, disc brakes are used to help achieve uniform paper tension under the highly variable inertia conditions between full and empty paper rolls. Unlike vehicle brakes which are normally ‘off’, industrial machinery brakes are normally ‘on’ and thus constantly wearing and more liable to overheat, making their friction properties inconsistent. Carbon brakes will provide greater consistency and greater torque capability, allowing improved process control and the potential for efficiency improvement.

About Federal-Mogul
Federal-Mogul Corporation is an innovative and diversified $6.9 billion global supplier of quality products, trusted brands and creative solutions to manufacturers of automotive, light commercial, heavy-duty and off-highway vehicles, as well as to the power generation, aerospace, marine, rail and industrial sectors. It is recognised as a premier global innovator in the areas of powertrain, sealing, safety and protection and a leading source of advanced technologies that help increase vehicle performance, improve fuel efficiency and reduce engine emissions for a cleaner world. Federal-Mogul employs nearly 40,000 people located in 36 countries.

A stream of buys coming in, which for SCE is very unusual.

Something afoot ?

News coming ?

Bit of Director buying it was :

http://www.investegate.co.uk/Article.aspx?id=201003020700209013H


SURFACE TRANSFORMS PLC
('the Company')

Directors' shareholdings

The Company was notified on 1 March 2010 that on 1 March 2010 Mr Kevin Johnson, Managing Director, acquired 19,250 ordinary shares of 1p each at 9p per share, equivalent to 0.08 per cent. of the entire issued share capital of the Company. Mr Johnson now beneficially holds 124,000 ordinary shares, equivalent to 0.51 per cent. of the entire issued share capital of the Company.

The Company was further notified on 1 March 2010 that on 1 March 2010, Mr Ken Baker, Director, acquired 60,000 ordinary shares of 1p each at 9p per share, equivalent to 0.25 per cent. of the entire issued share capital of the Company. Mr Baker now beneficially holds 275,000 ordinary shares, equivalent to 1.13 per cent. of the entire issued share capital of the Company.

The Company was finally notified on 1 March 2010 that on 1 March 2010 Mr Geoffrey Hall, Company Secretary, acquired 6,400 ordinary shares of 1p each at 9p per share, equivalent to 0.03 per cent. of the entire issued share capital of the Company. Mr Hall now beneficially holds 28,420 ordinary shares, equivalent to 0.12 per cent. of the entire issued share capital of the Company.