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.

Seems to have woken up today for some reason..........

And continues to make a bit of progress here and there :)

Presently on the car braking side, after getting the deal with Koenigsegg (which is going very well according to rumour) they are well underway with trials at 6 other smaller car makers, and news might come along of another deal or two in the second half.

This analyst has been reasonably accurate so far since this report came out in March 05 as to events that followed and also the figures.

Here's to hoping that the accuracy continues, especially with the financial forecasts as we go into 2010 :)

Link below - PDF file.

http://www.armshare.com/assets/contributordocs/Surface%20Transforms%20310305P8.pdf

Surface Transforms PLC - Notice of Results
7 August 2006

Surface Transforms plc

('Surface Transforms' or 'the Company')

Notice of results

Surface Transforms plc, manufacturer of high technology carbon ceramic
materials for braking systems, will announce its preliminary results for the
year ended 31 May 2006 on Thursday, 17 August 2006.

For enquiries:

Surface Transforms plc

Kevin Johnson 0151 373 7130

John East & Partners Limited

Simon Clements 020 7628 2200



END

As I expected, in fact, a little better than I was expecting given performance since the period of reporting end. Nice to see cautiously positive outlooks and goals :)

The next commercial deal on car braking is the key event then, lets hope its before year end, that would be good news.


http://www.investegate.co.uk/Article.aspx?id=20060817070000PB2B8

Latest update from http://www.armshare.com


..........The final results to May 2006 showed sales of 155,000 (2005: 258,000) and pre-tax loss of 923,000 (2005: (675,000)) - for the key explanations underlying these results, see December 2005 above - sales comprise H1 of 68,000 and H2 of 87,000. The company reported that the new production process being developed (see October and November 2005 above) is expected to reduce the unit cost of disc brakes by 50%; in Automotive Brakes, in addition to Koenigsegg (see March 2006), the company continues to work with 3 small UK based automotive OEMs which build high performance cars, and with Weber Sportcars in Switzerland; 3 patent applications were made to supplement the existing patent portfolio; the 2 key commercial targets for 2006/7 are to win another Automotive Brake customer and to complete the development of the new production process; it is intended to recruit further application relevant NEDs to facilitate market entry; year end cash was 1.75 million.


Research Standing

The market invariably canes a company's share price where there is a setback such as occurred in Autumn 2004 on the aircraft brake project with Dunlop. This provides opportunities for the more dispassionate and longer term investor. 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.

Whilst the financial results to May 2006 scarcely hit the radar screen, they mask the fact that the company has made very significant progress in strengthening its position for negotiating with channel partners, particularly in automotive. Until it started both to fully understand and also take control of the entire process for delivering merchantable brakes, it was very difficult to hold serious discussions with automotive OEMs because the company could not deliver a turnkey solution - automotive OEMs are different from aicraft brake OEMs because the latter already use the processes which accompany ST's core process and therefore do not require a turnkey solution - this negotiating position will be enhanced by the significant cost reduction which ST expects to derive from the new plant scheduled to be completed in the course of 2006/7.

The March 2006 supply agreement with specialist automotive OEM Koenigsegg is a seminal event because an answer can now be given to the all important question when negotiating with other OEMs "who else is using the system?".

With cash at bank at May 2006 equivalent to 12.4p per share, a share price of 12.5p at 17th August, a team which has strengthened considerably over the last two years and much greater knowledge/control re the delivery of merchantable solutions, ST is an attractively valued concept stock.

Thanks - I like to hear I'm considered an attractive concept! ST


PS - "The March 2006 supply agreement with specialist automotive OEM Koenigsegg is a seminal event because an answer can now be given to the all important question when negotiating with other OEMs "who else is using the system?"

This may well be correct. Jeremy Clarkson raved over the Koenigsegg CCX when he tested it earlier this year for the Sunday Times. And he pointed out that in view of its terrifyingly quick performance it needed decent brakes. If SCE has succeeded in providing these, there must be something to the product.

ST, yes, all of the CCX so far have been supplied with System ST from SCE.

Thats a good advert, a very good one.

To get the Koenigsegg CCX in proper context: it is one of the fastest, lightest, most powerful (at least in terms of power-to-weight ratio) production cars ever to be made. (I am quoting from memory from Clarkson's article - Sunday Times Online subsribers may be able to locate it and confirm or post the relevant juicy bits).

The Koenigsegg CCX was designed and built by an utter performance car obsessive who, not finding the high-performance car of his dreams on the market, decided to make his own. That means that all the parts, Surface Transforms brakes included, have been hand-sourced by a designer who really wanted the best.

Jeremy Clarkson was terrified by the amount of power available, and the on-the-edge, raw driving experience, and this is a man who has test-driven everything, including F-15 jets! His words: "Get it wrong in a Porsche Carrera, and you can correct it; get it wrong in this (the Koenigsegg CCX) and it'll kill you."

What one thing stands between the driver and the consequences of his driving? The brakes.

There can be no doubt that the Surface Transforms braking system is up to the job - the issue is how many units will sell.

This is where the next step is key, they really want another small OEM on the books by year end, and then things should naturally progress.

I would take a guess that by the time they have 3 small OEM's under contract they will be approaching break even, and thats just the car braking side of the business, there are other things too, but those are a couple of years away (rocket propulsion systems application presently under trial, as well as the airplane braking systems presently under trial).

PapalPower is esp. keen on this stock; but where's the evidence that these scientists can make a commercial product? Sure they have "interest" and some aero-deals (although I believe they missed-out on the new euro-jumbo- forget its name but doing well against Boing,).
Sure they have some deals with performance cars - but somehow stopping isn't quite as exciting as getting faster, is it?

A new device that improves mpg and gets 20% more power from your engine would sell like Hot Cakes...but here is a product that enables you to get closer to "the edge" and still walk away.
I have invested in this business since just after it went round the mini-investment exhibitions - well, those times are over and the sp is no-longer being fed by hype or greed (IMHO_). So it depends on retail sales - there's the difficulty - you can't just go out and fit this gear to your Ford - it's possible (I understand) with some exotic cars - but Costly and might require some changes to suspension (since these bits are lighter).
Yes it's a great technology and has many advantages in Aero - cold-braking in particular......but I have some doubts that they can grow the sales enough...with all the regulation inherent in such devices.
I understood there were some sales in the rocket-market (high-temp discharge bits)...but there again these sales will be fairly small.
I suspect that concentrating on performance issues means that the Management expect the Market to come to them - whereas in truth, SCE has to find a market and exploit it - brakes/clutches is such a diverse market I can't see them surviving on Exotic cars alone....maybe they need to look elsewhere, even develop another product using their research expertise - The Unbreakable Vase (who knows?)...


Has anyone talked to management about getting some regular bread and butter lines runniing? Regular Turnover is certainly nice to see on the balance-sheet......and sadly the Market doesn't like promises exotic car sales, only facts.
So, I'm a disapointed investor, =peaked too soon, huh?

Hangon, I think that those are very valuable points and I see this disadvantage as being inherent in many niche companies.

I'm not in this, so can afford to play devil's advocate, but at the end of the day it is top-line sales that are going to determine bottom-line profits, and without the sales the shares will go nowhere.

Some of these companies have the problem that they are run by engineers who are so fascinated with developing the products that they neglect to develop the business. Whether SCE is one I'll leave to others to decide. Sometimes I just enjoy contributing info to a thread without necessarily implying that it should be the Next Big Thing for my portfolio, and I'm probably not the only one.

As far as investing in new technology tiddlers goes, my money's better off in QTI, where I believe I can see where the upside will come from!

Hangon, fair points, but you have to understand they are going to the market, not waiting for the market to come to them.

Presently there are ongoing trials with 6 companies, these trials are 6 months in.

The deal they have already for the CCX came after 7 months of trials. So they are now at the stage where in the coming months there may be more commercial deals coming through. The CCX decision at 7 months is not a timescale either, some may want to trial 12 months, but the fact is that trials are happening.

They are acutely aware of the need for revenue, and working hard on acheiving increase in it. The next interims will show an increase in revenue over H1 2005, and lets hope that builds up more.

The key will be the next deals they make and when news of those comes.

Certainly is a risky one, but its valuation is not hyped up, like Stanleco or the many other companies with great plans but no revenue to back up their massive market cap when compared to cash levels.

What must really be a downer for Dunlop and SCE is that had the idiots at Airbus not tried to win "political points" and announced the speeding up of the project (which killed the Dunlop braking deal due to reduced time), then they could have launched as planned originally and Dunlop/SCE could have finished that project, which is now near enough the new "speeded up and now delayed back" time.

Never mind at least SCE is now working with 3 other "unknown" companies on the task of developing and qualifying their braking systems for planes in future.



Airbus replaces head of A380 program

Move is CEO Christian Streiff's first major appointment since he joined the troubled plane maker in July.

September 4 2006: 8:45 AM EDT


PARIS (Reuters) -- Plane maker Airbus replaced the head of its A380 superjumbo program Monday, two months after a crisis over production delays led to the resignation of the company's chief executive and the co-head of parent EADS.

Airbus said Frenchman Charles Champion had been replaced by Mario Heinen, 50, who until now has been in charge of the plane maker's chief cash engine, its single-aisle range.

The A380, the world's largest airliner, is due to be delivered to its first customer Singapore Airlines by the end of the year.

The move is CEO Christian Streiff's first major appointment since he was drafted in from outside the aviation industry to replace Gustav Humbert as the head of Airbus in July.

Airbus announced the move on the day of its first long-distance A380 test flight with hundreds of passengers on board, drawn from Airbus staff and cabin design specialists.

The A380, the world's largest airliner, is due to be delivered to its first customer Singapore Airlines by the end of the year after two sets of delays totaling a year.

Interesting little snippet below and it appears all CCX so far have had SCE ceramic brake systems fitted :


http://www.koenigsegg.com/thecars/ccx.asp?ccx=2

"Wheels / Brakes

The optional ceramic 382 mm front discs are coupled to 8 piston callipers and in the rear the 362 mm size is retained with 6 piston callipers. The optional industry first carbon fibre wheels save another 3 kg per wheel compared to the already lightweight magnesium wheels that come as standard. The ceramic discs save another 2 kg per wheel, giving the Koenigsegg CCX lower unsprung weight than any other super car.

Koenigsegg now also offers the ceramic discs and carbon wheel upgrade to all previous Koenigsegg models. "

I'd say thats good news today, and might be leading somewhere soon in the future, obviously something is a sparkle in someones eye now........

5 September 2006
Surface Transforms plc
(the "Company")
Directorate Change

The Company is pleased to announce the appointment of Mr Ken Baker, OBE, M.Sc,
C. Eng, aged 71, as a non-executive director with immediate effect.

Mr Baker is currently the Chairman of Avingtrans plc, an AIM listed precision
engineering technology group serving the aerospace, medical and machinery
industries. Prior to this appointment he was chairman of Ferraris Group plc
("Ferraris") between 1993-2002 during which time the market capitalisation of
Ferraris increased significantly.

Mr Baker has enjoyed a long and successful industrial career during which he
has been chief executive officer of a number of industrial groups both in the
public and private sector including a number of European subsidiaries of Lear
Siegler Inc, Durr Limited and Silvermines plc.

He is also currently a director of Falcon Investment Trust plc, part of the
Unicorn Group, the East German Investment Trust plc, the German British Chamber
of Industry and Commerce, K.M. Baker Associates Limited, Dalehouse Farm
Limited, Dalehouse Properties Limited and K&S Computers Limited.

He received his OBE in 1988 in recognition of the services provided to UK
industry whilst serving as Chairman of The Advanced Manufacturing and
technology Research Association and a member of the Advanced Manufacturing and
Technology Committee of the Department of Trade and Industry.

Mr Baker has confirmed that there is no further information required to be
disclosed under paragraph 17 of the AIM Rules.

For enquiries, please contact:

Surface Transforms plc
Kevin Johnson 0151 472 3733
Kevin D'Silva 07802 306956

John East & Partners Limited (Nominated Adviser)
David Worlidge 020 7628 2200

Teather & Greenwood Limited (Broker)
Mark Dickenson 020 7426 9000
Sindre Ottesen 020 7426 9000

Really good news, this is a major advance :)


http://www.investegate.co.uk/Article.aspx?id=20060915070000P60E6


14 September 2006

Surface Transforms plc

(the "Company")

Aircraft Brake Development Contract

The Company is pleased to announce a development agreement with a major global
supplier of carbon-carbon aircraft brake systems. Surface Transforms is now in
active collaboration with three out of a total of six such major global
suppliers. The objective of the development contract is to produce a low wear
longer-life silicon carbide carbon-ceramic brake based specifically on the
client's incumbent carbon-carbon precursor.

Successful tests at the client's site on sub-scale aircraft disc brakes were
completed in May 2006 and the agreement will now extend that work programme to
include full-scale aircraft discs which will be developed by Surface Transforms
for testing by the client.

Under the terms of the agreement the global brake supplier will fund all costs
relating to the work programme. Development work on the programme is scheduled
for completion and review in the fourth quarter of the Company's current
financial year. If the development work is successful the Board expects to
enter into discussions regarding a more extensive programme of work.

For enquiries, please contact:

Surface Transforms plc
Dr Kevin Johnson 0151 472 3733
Dr Geoff Gould 0151 472 3733

John East & Partners Limited (Nominated Adviser)
Simon Clements 020 7628 2200
David Worlidge 020 7628 2200

Teather & Greenwood Limited (Broker)
Mark Dickenson 020 7426 9000
Sindre Ottesen 020 7426 9000

Development work complete in early 2007, if it moves forward then it would have a very major impact on 2007 financial year in terms of revenues.

Should also trim this years loss down a little bit.

Before this contract I was expecting the loss to be around 450K for this 2006 financial year, maybe that can be trimmed a little.

If we get another car braking agreement in place in the coming 6 months, then things will seriously be looking up.

All of these things are good in themselves, but it doesn't add up to much to excite the Market....Surface needs a volume pproduct - something that will help keep the overheads from becomming a burden.......maybe they should turn their minds to solving some other local problem?

Car brakes are unlikely to become mainstram until they slash the cost - for the likes of a Ford Mondeo even at a tenth of the current price it will be rarely purchased by the 1st owner who is unlikely to want to race their street car too close to the limit.
Having yellow wheel-gear might be good for Surface, but only a v.few techno-petrolheads will understand the benefit. The majority of folk wouldn't notice.

I'd like to see a small parallel business in "materials" perhaps, which could start to cover the overheads, salaries etc. The aircraft brakes may be little futuristic, although useful for aircraft returning to an aircraft carrier.

Hangon, "The aircraft brakes may be little futuristic, although useful for aircraft returning to an aircraft carrier."

Haven't you seen "Top Gun" ??!!

Aircraft landing on carriers don't use brakes - if they did then carriers would have to be a mile and a half long. They use hooks and arrestor wires to stop them within a few metres.

I believe that the argument for using the brakes on airframes is to save weight and increase braking efficiency - but it won't be so efficient that it means they can do away with arrestor hooks on carriers.