Surface Transforms Share Discussion Threads

[bagpuss67] 10/11/2023 07:04

Pinkfoot. Any update you are prepared to share on the management meetings this week?

[amt] 10/11/2023 06:54

It's a game of cat and mouse. The shares are an likely incredible bargain on a 6 months view. However nobody is buying in the hope that they will go lower.

[bones698] 10/11/2023 05:45

Have you not learnt that most don't have a clue what they are really doing otherwise all these small cap companies would be doing well . The reality is they aren't in the vast number of cases .

You can't fight the chart I'm afraid and the issues will take time to get resolved along with the funding .

[amt] 09/11/2023 23:29

I don't think the Directors would have purchased a lot of shares recently if they thought the problems were great.

[albert_einstein] 09/11/2023 18:57

Stop posting this drivel mate. People are hurting. Show some class and don't rub it in.

[amanitaangelicus] 09/11/2023 16:11

Cruel but gotta happen. Wait ...

[amanitaangelicus] 09/11/2023 08:26

Once we see reality ie Oct,Nov,Dec production figs, this is on oxygen. Must be big probs to admit it on Aim. Always bigger issues than admitted. Wait to buy. Bigger discount to come. Contract cancellations next, you watch.

[amt] 09/11/2023 06:46

The share could be a great bargain but no one will buy with a placing around the corner so anyone's guess where it will fall too but seems ludicrously low to me compared to prospects.

[amt] 09/11/2023 06:40

My guess is a placing to raise 3m which would see them through to break even in say February of 2024 providing they meet the current sales target and get to 2m per month in sales by February.

[amt] 09/11/2023 06:32

They had net assets of 28m at 30th June and 18m of fixed assets. Not sure how much of that relates to property. Maybe the 13m loan required for Capex would be secured on that.
The recent RNS was too vague on dates. Maybe because of failures to meet targets on production but that was a mistake not to put more precise timing for production capacity.
I thought the share price at 25p had discounted failure to meet the 12 m target but seems I was wrong.
Why aren't the Durectors buying, perhaps not allowed ?

[supernumerary] 09/11/2023 00:09

Or alternatively cut their salaries and took their income in shares?

Regarding the capex, they could always just delay it until they've got to max production on current kit and the cash is rolling in, tell the customer(s) that there will be a few delays, and then pay any contractual penalties there may be - bound to be less than the capex if it's properly planned. Always worth considering that option - it seems to go on all over the place these days.

[bones] 08/11/2023 22:22

One further thing, come the final results for FY23, it will be instructive to see how the directors rewarded themselves in increased salaries, bonuses and pensions.

[microscope] 08/11/2023 22:21

As you say bones all about what happens gong forward, and the superb order book is undoubtedly there - however their ability to deliver it, and meantime manage finances, will be the decisive factors.

[bones698] 08/11/2023 22:12

Yes although this has been ongoing for a over a decade now . Just at the point people thought it was all systems go issues have arisen which to me point to some pretty simple failures between management and production . That has led to a further cash call and will result in more sillution one way or another . The problem with that is at these low shareprices it impacts future prospects for a return massively and then you also have potential risks still going forward .

What if one of the items decides to go elsewhere concerned over sce not being able to deliver on-time ? Has anyone seen the contracts and what get out clause are involved ?

Short term I think most agree will see further downside to the share price . The chart looks awful and that tends to tell the story of what's actually happening better than people on the BB . No offence it's just what happens .

Like many now is a time to sit and watch on the sidelines and let the shareprice level off once it's finished it's decline . What newsflow comes remains to be seen but we know funding is probably next to arrive .

Always liked the product here but less so the management and automotive is a tough nut to crack as we saw with torotrak .

The future numbers look good but I wonder just how secure those deals are .

[bones] 08/11/2023 21:57

As microscope says, most possibilities have been tossed around now. I’m waiting now to see what comes next!

[bones] 08/11/2023 21:52

The £13M is of course for the capex so that they can punt out £75M capacity per annum by 2025. If that is anywhere near achieved, today’s cash crunch will be forgotten.

It’s not just OEM10 (is that GM, someone said?) from 2024 onward (£200M plus committed) but also OEM8 (is that Tesla, someone said?) who are currently taking the current production right now as part of a £100M contract including two carryover models.

Bones698, comments appreciated but I am not as relentlessly negative in my outlook here. Yes, the company have stumbled in the expansion and have to raise cash but fundamentally the overall case remains.

Unlike so many of the “other AIM cases”, this one has committed multi year contracts of £400M in a product that cannot just be switched to another supplier and which was chosen for its specific superiority over the only global alternative.

That situation will not just die away. A short term solution to cash funding will be found to tide the company over into the planned, contracted growth that exists. Ultimately some new blood will be added to the board and existing shareholders will share pain in the short term.

The markets are what they are. My concern is to see the company ultimately succeed and I believe it will. Whether it is independent for much longer is a separate debate.

[microscope] 08/11/2023 21:26

Pretty much I'd think all been said, whether GlassHF or GlssHE.

I'm reminded of the rather ambiguous in FY22 comments about 'journey towards profitability'.

Problem with borrowing 13 million for, fairly short term, needs, is also the interest with interest rates at long term highs and not likely to get any softer anytime soon. Even 3pc above rate would be a million or so a year in interest.

Fabulous product, only company in UK producing these ceramic brakes, nigh impossible barriers to entry for any potential competition. On other hand they've been the guinea pig and faced often unpredictable hurdles - and we just don't know if they can overcome them going forward, even though for now seem to have convinced OEM10 that they will.

Final thought how a broker could have them at 120p, market cap 300 million, is embarrassing. Suspending forecasts was inevitable.

I'm patient, will wait to see how next 9-12 months go before considering investing.

[bones698] 08/11/2023 20:27

Bones
Agree with your figures but if they need that amount of cash it will take time to organise maybe 3-5 months and likely demand a bigger discount as the share price will be at 10p pretty quickly before they have even started to raise the money with the city people .
Therefore it could be as low as 7p and more dilutive .

As you say in the long run it isn't the worst outcome if they can get to profitability and stay there without more issues going forward.thats just a risk that is unknown though and other obstacles could arise , then again it could all go well for a change .

I don't see an OEM or anyone providing them with working capital ,an upfront payment or any such funding that very rarely happens in these markets . Not impossible but I would t count on that at all given where sce is currently .

Most likely options are a rights issue or loam converting to equity . The latter is usually less dilutive but smaller in the amount you would get.

Short term things don't look good at all . Longer term will depend on how they deal with the issues and funding . They need to get the house in order ,address these issues and make sure there are no further issues going forward . Looks like another year or two waiting here while they get things sorted . Changes to the bod etc will also delay things further but might be better for the future .

The chart shows just how quickly things can change and go wrong even when you think they are finally about to turn for the better . Sce isn't alone in that regard there are many companies and charts that look similar out there and small caps are getting hammered especially when funding is required . Seems the days of future prospects have been overtaken by if you can't make a profit forget it. You can't blame them when so many of these companies fail to deliver

[pinkfoot2] 08/11/2023 16:51

Whatever comes out of this, Bundred has to walk-he presides over this and he should be shown the door.More of the same won’t wash

[bones698] 08/11/2023 16:26

Reading a couple of comments
A possible investor buying a stake to fund the company . Why would a company take a stake at anything over the current share price ? Also how long do you think it would take to negotiate and pen such a deal ? Imo this is unlikely and would likely take too long to complete meaning sce would risk running out of money with potentially fatal consequences .

Potential takeover
With the share price falling and things likely to change in the boardroom . The share price falling why wouldn't you wait and see how low it goes or even short the shares to drive it lower so you could make an even lower bid ? This just looks unlikely and desperate from a few pis hoping .

[amanitaangelicus] 08/11/2023 16:14

Funding , placing not bad news ...much needed ...as long as it aint convi ship.

[gripfit] 08/11/2023 16:11

Looks like 5p to me

[pugugly] 08/11/2023 15:59

SP suggests more bad news possibly leaking?????????????

[amanitaangelicus] 08/11/2023 15:27

Catch a falling knife and put it in your pocket...