Surface Transforms Share Discussion Threads

[amt] 20/1/2021 07:54

70p today?
Come on SCE let the poor private investors get a decent chunk of the new shares. We supported you at the previous placing at 16p.

[longshanks] 20/1/2021 07:51

Too true Bones. Indeed I suspect they are already planning OEM cells 3, 4 and 5 and even an entirely new factory."Indeed, the prospective contract pipeline has the potential to exceed the entire production capacity of Knowsley by 2025"

[amt] 20/1/2021 07:50

So they are also saying is the current pipeline has the potential to exceed the 75m annual revenue capacity of the Knowsley plant by 2025. The pipeline could grow considerably. The market size is several billion per annum.
75 million implies about 40m GP and perhaps 30m plus ebitda possible in just 4 years time.
I am still thinking potential ten bagger from here.
Future funding would be at much higher market caps so dilutions would become insignificant.
Very exciting.

[bones] 20/1/2021 07:42

Yes, rivaldo, the tenor of those published comments is such that the board are probably already turning their attention to how OEM Production Cell THREE will be planned and financed down the line. Sounds and looks like a rolling snowball....!

[longshanks] 19/1/2021 23:10

I broadly agree Riv: raising funds for growth is all part of having a stock market presence.At 50p it is not at that much of a discount in historic terms and it does push the business footprint forward albeit ahead of actual pen on paper for these prospective contracts.The directors must have given a convincing presentation to get this away. That is good enough for me.

[rivaldo] 19/1/2021 22:49

I'm extremely happy about this news. The funding was always going to be necessary, and 50p is a good price considering this would have been mooted before the recent spike.

There are some terrific quotes in the RNS, some already highlighted above, but the breadth of opportunity in this section just shows the potential:

"based on their dealings with the OEMs and their understanding of the OEMs' production plans, the Directors are of the opinion that there has been continued progress with OEM 1, OEM 3 (also covering OEM 4), OEM 6 and three new potential OEM customers are progressing well with numerous new vehicle launches being targeted for 2024. Indeed, the prospective contract pipeline has the potential to exceed the entire production capacity of Knowsley by 2025. Accordingly, the Board are confident that production capacity of a new OEM Production Cell Two will be required in due course, regardless of new contracts being awarded by either or both OEM 8 or OEM 9 to the Company".

[pinkfoot2] 19/1/2021 21:03

There was some EIS/VCT scope in the Placing but not very much.

[quemaster] 19/1/2021 20:35

This shows the potential size of the OEM 8/9 contracts.

"Should contracts be awarded from both OEM 8 and OEM 9, a new OEM Production Cell Two would become fully utilised in H2-23."

[amt] 19/1/2021 20:32

Trackwise did a recent placing at a huge discount. The company had a change of heart and gave Private investors a fair deal. Maybe SCE will if people complain

[supernumerary] 19/1/2021 20:24

Can't honestly say it matters that much, at least to me - I've checked and most of my shares are in ISAs anyway - but the point of an OO is to avoid disapplication of preemption rights, and the point of the preemption rights is to ensure equal treatment for existing shareholders as compared to new ones.

In this case, some new shareholders will get a better deal than existing shareholders, which is contrary, at least in spirit, to those provisions of the Companies Act.

In that context, I agree profoundly that PIs nearly always get a poor deal with AIM placings, but since PIs don't care, and companies don't expect 'private investors to fund [them] properly', the situation is unlikely to change in the foreseeable future.

Every time it doesn't matter is a nail in the coffin of the time it does matter.

[bones] 19/1/2021 20:22

Today,

Brembo market capitalisation = EUR 3,480,000,000

SCE market capitalisation = GBP 97,300,000

[amt] 19/1/2021 19:58

I suspect the share price will go up tomorrow. That pipeline of deals sounds phenomenal especially the electric vehicles.
Ultimately the market size is several billion so no end of opportunity for growth.
I think Brembo is 3m plus market cap right?

[amt] 19/1/2021 19:48

Well you are only getting a tiny proportion of the shares so does it really matter that much.
Private Investors nearly always get a poor deal on capital raising on AIM. The rules need changing if they want private investors to fund companies properly.

[bagpuss67] 19/1/2021 19:23

Yes. You seem to be correct. Pretty frustrating.

[supernumerary] 19/1/2021 19:16

Have I understood this correctly? Bloody annoying if so...

'The Directors believe that upon First Admission, the gross assets of the Company will exceed the maximum limit set out within the qualifying rules for EIS and VCT. Accordingly, the Open Offer Shares will not rank as "eligible shares" for the purposes of EIS'

[amt] 19/1/2021 18:54

So about 7.5m annual cash return on a 9m investment.
If they get all 5 cells built ultimately that's nearly 40m gross profit per annum.
Certainly a lot of upside over the next 5 years.
Hopefully next time the company will be valued at a couple of a hundred million and dilution will be minimal.
Just a pity they couldn't secure the deals before the announcement or let private investors take a greater share of the funding. Still 25% dilution isn't too bad.
I can easily see this with a market cap of between 500m to one billion in a couple of years. 2.50 to 5.0 quid after placing taken into account

[talk2dubya] 19/1/2021 18:40

Reminds me of ITM when did raises at 30 odd pence with the pipelines they have. They seem pretty confident of converting when you read the details of the reason for the fund raise.

[pinkfoot2] 19/1/2021 18:39

I’m very bullish Longshanks-there is no ceiling on this company in my view

[longshanks] 19/1/2021 18:24

I guess by your recent absence pinkfoot, that you are an insider on this placing.Good to see an OO alongside the placing and subscription and one would hope that should it be oversubscribed, they will seek to accommodate excess applications similar to last year.

[pinkfoot2] 19/1/2021 18:16

This is a brilliant deal-and timing just right.Well done to the team

[condom2] 19/1/2021 18:13

A bullish placing, I think that’s a first for me! Love the thought of 35m revenue for 2022 !

[spookies] 19/1/2021 18:10

Beat me to it talk2dubya.

[bones] 19/1/2021 18:10

“....either or both of two potentially significant opportunities with the "carry over" of parts onto new models with OEM 8 and a possible new customer, OEM 9, award supply contracts to the Company. OEM 9 is a new entrant to the EV market.....”