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.

Comment from uk-analyst.com :

"Success has been difficult to come by for AIM traded Surface Transforms. The company, which once attracted a premium rating, has seen its status among investors seriously damaged in recent years as a result of minimal revenues and an absence of significant contract wins. However, it was a different story in the final session of the week, as Surface announced news of a development agreement with a major global supplier of carbon-carbon aircraft brake systems, sending its shares 2p better to 14.5p. The company is now in active collaboration with three out of a total of six such major global suppliers. The objective of this latest 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. Development work is expected to be completed by the fourth quarter of the current year and will be entirely funded by the brake systems supplier. Could th is finally be the turning point for Surface? Only time will tell."

New update at http://www.armshare.com (Free to register and use) - Extract below based on the AGM statement today :


.................In September, a funded development agreement was entered into with a major global supplier of carbon-carbon aircraft brake systems - this means that ST is now collaborating with 3 of the 6 major global suppliers of such systems. The objective is to produce a low wear longer-life silicon carbide carbon-ceramic brake - successful tests 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 for testing. Development work on the programme is scheduled for completion and review in Q4 2006/7 - if it is successful, the board expects to enter into discussions regarding a more extensive programme of work.

The October AGM update reported that installation of the carbon densification process has begun, with completion scheduled for Q4 2006/7 - the cost net of a 95,000 grant will be c.155,000 - the expected benefits are faster process times and lower manufacturing costs; since May 2006, deliveries to Koenigsegg (see March 2006) have been running at c. 2 car sets per month; a small order has recently been taken from a US automotive brake system supplier which will have a system on display at the SEMA convention in Las Vegas later in October.

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 14.5p at 15th September, 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.

COMPANY MEETING

On 19th October 2006, ArmShare attended the AGM - a copy of the presentation made at the AGM can be accessed by clicking on Company Website above (on the http://www.armshare.com website) , Investor & Media Relations and Results. Further information emerging from the Q&A was:

a) at the beginning of 2006, product development in the automotive division resulted in significantly improved wear characteristics. This development also applies to aircraft braking systems. It is likely to assist in developing attractive value propositions for both markets - see b).

b) feedback from Koenigsegg customers and the test driver is that SystemST improves the controllability of these very powerful cars. Data is being collected re stopping distances, wear rates and the benefits of reduced unsprung weight in order to develop a quantified value proposition - it seems likely that this will be based on reduced life time cost.

c) for the aircraft market, the development projects are expected to take 3 to 4 years, with revenues to ST being modest to start with and growing significantly in the later stages of the programme. ST is c.18 months into its leading aicraft brake programme.

For immediate release 24 October 2006

SURFACE TRANSFORMS PLC

("the Company")

Director Shareholding

The Company has today been notified that Ken Baker, Non-Executive Director,
purchased 40,000 ordinary shares on 20 October 2006 at 14.5 pence, equivalent
to 0.29 per cent. of the issued share capital of the Company. This is Mr
Baker's entire holding.

Showing some confidence, happy to acquire the shares at 27.5p !!!!


To be embargoed until
Monday 30 October 2006

SURFACE TRANSFORMS PLC
("the Company")
Director Shareholding

The Company has been notified that Julio Faria, Executive Director, has today
acquired 100,000 ordinary shares of 1p each at 27.5p per share, equivalent to
0.7 per cent. of the entire issued share capital of the Company, from a former
director of the Company.

Mr Faria has also notified the Company that these shares have been transferred
to Mr Faria's adult son and, consequently, Mr Faria's beneficial holding of
2,326,845 Ordinary Shares, equivalent to 16.58 per cent. of the entire issued
share capital of the Company, remains unchanged.

That is quite a premium!

It is. And a very strong "I am confident" signal.

Expect some more contract news in the coming 2 or 3 months I think.

I hold tis stock but am not convinced by events these last two days:
Yesterday a director bought shares off an ex-director at 27p (nearly twice market) and gave them to his son. (see RNS).......that sent the sp up 15% I think......yet as far as I can see this wasn't a trade in the market as such.....AND today we have Sells 10x Buys (very thin trade)....... whilst the MM's have upped the price 6%. This looks like shaking the tree/ stirring the pot -

This is close to a flash in the pan, IMHO - although welcome, I am not convinced the price will hold, esp as the Market trading is quite small.........yes, I know this can make prices fluctuate, but we mustn't buy everything that spikes, otherwise you have precious little safety-margin for the weeks ahead.

Hangon, I haven't looked into this as closely as you did, but I think your instinct is correct about not panic-buying this stock. Small caps like this are likely to lie low for so long due to their tiny market cap and limited interest from larger investors.

However, the director purchase is a good show of confidence. I have a feeling that are good reasons why it didn't go over the market; something tells me they managed a transfer behind the scenes but don't ask me quite how . . .

hangon, SCE remains an investment stock, simply because the timescales of success are unknown and cannot be charted out, therefore it might take a 6 months, it might take 3 more years. There is no point in trading it, and therefore its all about adding at the most opportune moment.

I would envisage either small OEM car braking news, or aircraft deal moving to the next stage news, sometime in the months ahead, this would and could be why the directors have shown their "confidence".

So, with timescales impossible to call, its just one to keep building your holding in, as and when you can, if you so wish.

With CVIST going ahead I would expect therefore losses for the year to be around 700K then.

Considering the weakness of the SP, and a 50K sell would be like 10p paid for it, it would appear someone purchased 150K today so far. The initial 50K buy being under the mid price, which given weakness is not a surprise.

50K at 15p
50K at 16p
50K at 16.15p

Interesting.

The problem I have with this technology stock is "What will send it back(up)?"
Airbus has continued to disappoint and isn't ready to specify our high-performance brakes, although there are other aero-buyers - this is news that we could do without.
The Sports-car market is fairly minor, although welcome it is hardly likely to be a major profit centre due to the high cost/performance ratio. Therefore I am still waiting for the company to find alternative uses for their products (please not rocket-cowls; this is a very minor application already).
All companies need a simple "bread and butter" product-line, which pays the wages and keeps the factory profitable even if not exciting. I don't see that here and I don't see any diversification, rather my perception is that they are hoping for something to turn up (by way of orders for existing product areas). Unfortunately, if their customers don't order soon, there is no alternative but closing the operation. The sp is not just tracking the Lack of Orders - it could be tracking the probabliity of a cash-call, or failure. Either way existing shareholders will feel some pain.
This company needs to use it brains to develop some profitable products and from where I sit, it may be that these should not use their core-technology.
Can anyone really argue the Market has it wrong?..........er, based on what that "we " don't know?

What we do know is that, over the last 12 months, shareholders have lost half their investment......just what is about to change this trend?......no, I don't see it...

24 November 2006
SURFACE TRANSFORMS PLC
('the Company')
Director's shareholding

The Company has been notified that Kevin Johnson, Managing Director, yesterday
acquired 22,500 ordinary shares of 1p each at 14.5p per share, equivalent to
0.16 per cent. of the entire issued share capital of the Company. Mr Johnson
now beneficially holds 79,750 ordinary shares, equivalent to 0.57 per cent. of
the entire issued share capital of the Company.

3 January 2007

Surface Transforms plc

("Surface Transforms" or "the Group")

Holding in Company

The Company was notified earlier today that Advance AIM Value Realisation
Company Limited has acquired 595,000 ordinary shares in Surface Transforms,
equivalent to 4.24 per cent. of the issued share capital of the Company.

The Company has also been notified that the shares are registered in the name
of Nortrust Nominees Limited.

Seems stronger of late, I wonder if some news is possibly in the pipeline ?

Well its soon to be interim reporting on the 8th of Feb.

I would guess at around a 350K to 400K loss for the first half (as CVIST is being done now) and around 600K to 650K in the bank at the interim stage.

A lot has changed since the original prospectus, and at least they are now focussed with finite objectives.

Historic figures are always going to look bad at the moment and this year (being 06/07) is going to be the worst of the coming five for SCE I would guess.

They should end it with around 300K in the bank, but with enough deals in place and potential deals to happen, that 07/08 (next financial year) they can break even.

08/09 and 09/10, all being well, will see major contributions from Roxel and Aircraft braking, so the focus is all on car braking for the moment, they need to complete this financial year and have around 300K left in the bank but with CVIST in place and operational, this positions them for a break even year 07/08 with increasing levels of car braking contracts/sales.

Key news will be progress on deals and dvelopment contracts. Provided all is progressing well with Roxel and also Aircraft systems (all four of them) that will be good. Car braking well we know there are ongoing tests and trials with around 3 or 4 companies, and these do take time, but an update would be good to say all is progressing well.

All guesswork and IMO.

Why are they walking the price up ?

L2 now 2 v 1 @ 16/19

Are they suspecting some good news in the results ? or are they walking it up to then drop it back hard on results day and flush out some sells ? All very strange.

And even stranger.....

Lets see whats in the results statement then tomorrow morning, must be something exciting contained within to justify the walk up in the price this week...................

Much better than I thought they would be, in all ways, and perhaps some light at the end of the tunnel. Looking forward to further progress and news !!!

http://www.investegate.co.uk/Article.aspx?id=20070208070000P1202

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