Surface Transforms Share Discussion Threads

[regandharry5] 03/9/2021 08:53

Mentioned in IC and Mailonline, and the share price struggles. Welcome to SCE. Us longterm holders are well used to this.

[graham1ty] 03/9/2021 08:46

I obviously know nothing about Markets.
News flow:
New contract with new client OEM8
New contract with new client OEM10
New contract with existing client OEM5
Capital cost of fitting out Knowsley falls by £10m
“increasing 2023 sales capacity by £15 million p.a. from £35 million p.a. to £50 million p.a. with no new capital equipment cash requirement“
“Our continuing discussions with existing and potential customers together with increasingly encouraging test results have not only lifted our confidence in this view but led us to the conclusion that we may require this capacity by 2024” ( a year early)

And the share price struggles to rise, and cannot hold on to yesterday’s gains !!

[jerarnie1] 03/9/2021 06:52

Now even getting a mention in The MailOnline

"Elsewhere, Surface Transforms, a maker of carbon-fibre reinforced ceramic brake discs, saw its shares accelerate 4.6 per cent, or 3p to 68.5p as investors backed a new manufacturing strategy at its factory in Knowsley, Merseyside."

[pinkfoot2] 02/9/2021 20:51

Hardly a penny stock but the sentiment is correct

[charlie9038] 02/9/2021 20:14

Tomorrow will be lively then.

[graham1ty] 02/9/2021 18:47

Penny stock ? Hardly

[tole] 02/9/2021 18:19

https://www.fool.co.uk/investing/2021/09/02/heres-why-id-buy-this-soaring-penny-stock-right-now/Many UK share investors are splashing the cash on companies that are involved in the manufacturing or running of hybrid and electric vehicles (EVs). I myself have bought fluid systems maker TI Fluid Systems to hopefully make money from the likely surge in EV sales over the next decade.The low-carbon class isn't the only car segment tipped for explosive growth in the coming years, however. As the number of high-net-worth individuals across the world booms, so does demand for sports cars. Analysts at Statista reckon 858,100 high-performance vehicles will roll off production line in 2025. That's up from an anticipated 655,400 this year.This is why I think Surface Transforms (LSE: SCE) is one of the best automotive-focused UK stocks to buy right now. It's a penny stock that manufactures cutting-edge carbon ceramic disc brakes for cars (and to a lesser extent for planes).Contracts are stacking up!Sales are rocketing at the business right now as the auto industry recovers from the troubles of pandemic-hit 2020. Revenues soared 34% year-on-year in the first half of this year, above Surface Transforms' prior expectations. And the AIM company continues to rack up contracts with major original equipment manufacturers (OEMs) to keep the top line soaring.Just today Surface Transforms announced that it's been selected as a tier one supplier of carbon ceramic brake discs to an existing major customer. The contract is worth €5m over a four-year period beginning in 2024. And the penny stock has described the award as significant: it's the first time the multi-year 'carry over' agreement has been implemented with said customer since the initial contract was inked in 2019.Thursday's news follows hot on the heels of a major contract signed with a new OEM just a fortnight ago too. That £20m, tier one contract is also due to commence in 2024.Why Id buy this penny stock right nowToday's fresh contract news isn't the only thing to a light a fire under Surface Transforms' share price today. The stock was last trading 7% higher on Thursday at 70p per share.The stock has also jumped after the firm announcing major changes to its manufacturing strategy. This includes accelerating the fit-out of its Knowsley factory by a full 18 months. The aim is to achieve sales capacity of £50m by 2023. This compares with £35m at present. It will also cut costs associated with the fit-out by around £10m and repurpose the facility as a single production line project rather than one made of independent manufacturing cells.Now, its operations are highly cyclical and any economic downturns could significantly hit demand for its product. Its markets are also very competitive and that poses an extra danger to the top line. Still, at the moment I think there's a lot to like about this stock. It's why I'm thinking of adding it to my Stocks and Shares ISA right now.

[fillspectre] 02/9/2021 17:34

Reasonable action today. Be interesting when one of the even more significant contracts land. Fils.

[bones] 02/9/2021 17:22

Looks like 925k+ shares crossed at 70p during the day. A few shares for the broker. Might help clear out the seller who was probably one of those trades.

[charlock] 02/9/2021 13:18

'@boonkoh - from today's RNS - "Following advice from the furnace suppliers and internal evaluation the Company will now procure a smaller number of larger furnaces to support the sales capacity target for the Knowsley factory of £75 million p.a."

[bloomberg2] 02/9/2021 13:14

Definitely not a concern about contracts etc !! Got to pay for Avct trade soon!! Left myself a bit exposed .. hopefully get back into SCE soon...

[boonkoh] 02/9/2021 13:12

What they failed to announce today is the downside of moving to a single furnace instead of multiple ones across independent cells.

[bones] 02/9/2021 13:08

Liverpool Business News:

[rivaldo] 02/9/2021 12:56

On hols at present, but this made sitting round the pool even more pleasant!

The pace of contract news is increasing, and the narrative is excitingly confident today from a usually conservative management team. Plus the highly material cost savings from the revised production strategy are great to see.

[theoldcodger] 02/9/2021 10:42

I know I'm an old cynic, but I wondered why there was a steady stream of buys yesterday – some investors are just lucky timing-wise I guess!

Whilst the carry over contract is obviously great news, it's not huge and was probably already largely discounted.

However, the new manufacturing strategy is a different matter altogether and likely to make a big difference to the company with greater flexibility, capacity and most importantly, profitability. I do have some concerns about their reliance on a smaller number of furnaces and the single production line model going forward though. I quite liked the likely robustness of the "cell" model and having previously invested in a company which relied on furnaces for production (albeit in a completely different sector), I'm all too painfully aware that they will have downtime and more pertinently, if they hit a major problem with a furnace, it can end up being massively disruptive and enormously costly. That's more something for the current management to handle longer term, although the single production line will certainly involve some execution risks now. Overall, today's announcements are highly positive and another piece of the puzzle fitted.

The share price reaction (+4.5 to 70p) seems about right to me, although I do get the feeling that one more reasonable size contract, especially if it happened to be with a new OEM, would see the share price really fly and hopefully approach three figures.

Most definitely exciting times.

All my opinions only.

I hold,
TOC

[hiddendepths] 02/9/2021 10:14

Weird time to sell bloomberg2. By all means tell us why. Was it a company concern?

[lfc4ever] 02/9/2021 10:13

out of curiosity, what was the reasoning behind the sell?

[amt] 02/9/2021 10:03

I now see this is a longterm holding and very useful to reduce inheritance tax.
Probably the first time I have had a share in a Company with huge upside that I can retain a large holding in without worries.
I am glad I held on during the last few months when there was always that tiny doubt whether this was all going to come off.
Now its just a matter of how big this will get.

[pinkfoot2] 02/9/2021 10:00

The RNS is basically saying we can meet your capacity concerns-it’s a screaming buy in my view

[fillspectre] 02/9/2021 09:37

Sorry to see you selling even a portion of your current holding Bloomberg2.
Perhaps the manufacturing strategy change has been influenced not only by the furnace manufacturer but also by 1) existing or prospective clients currently indicating to Surface Transforms they need the increased capacity sooner (in which case more contract announcements to follow) and 2) the two new non-executive directors who may be advising the need for speed in reducing capacity constraints to capitalise on the opportunity presenting itself. I expect the two new non-execs have long feelers in the industry. I have long thought that capacity leads contracts. Fils.

[hiddendepths] 02/9/2021 09:13

Don't know if anyone is interested but the offer price is steadily rising within the spread. If it is an ongoing seller, this would suggest they are near the end of their order and are now offering pretty small tranches at escalating prices.

[mjcrockett] 02/9/2021 09:10

Recent updates from the company have been very positive. Today we hear about "increasingly encouraging test results" Could this mean progress with OEM3?

We may hear more in the Interim results due on the 13th.

[bloomberg2] 02/9/2021 09:07

Sold around the open!! Got the worst price of the session so far!! Sellers remorse kicking in big time now!!