Source: TheBusinessDesk.com post
KNOWSLEY, U.K. – Surface Transforms, announced it has been selected as a tier-one supplier of a carbon ceramic brake disc on a vehicle by a global vehicle manufacturer, which it refers to as OEM (original equipment manufacturer) 8.
The lifetime revenue from the contract, set to start next Summer, £27.5 million.
Surface Transforms has also received an order for engineering samples required by OEM 8 to complete its regulatory approval activity on this high-performance car.
The deal involves Surface Transforms being the standard fit, sole supplier of the carbon ceramic brake disc on both axles of the car.
Forecast production volumes in the contract show a ramp up to full series volume commencing in 2021 with annual revenue being approximately £8 million for the next three years. The contract currently covers series production to 2024 but may be extended.
The company is investing £500,000 this year in increasing its headcount as a result of the new contract, £1.3 million in 2021, and £2 million in 2022, to provide the necessary support infrastructure.
In a trading update for the year so far, Surface Transforms said that sales have continued to grow, despite the effects of COVID-19 and the board now anticipate that current 2020 revenues will be approximately £400,000 higher than market expectations, with group revenue for the year expected to increase to approximately £2 million.
This increased revenue will mitigate the working capital impact of additional overhead following the decision to invest in the company’s headcount.
The company continues to expect to make further contract award announcements over the next six months, it said.
“This, truly game changing, award builds upon the recent trend of significant contract wins with mainstream automotive manufacturers,” said Chief Executive, Kevin Johnson.
“The award, which on its own, doubles previous revenue projections for FY22 and accelerates Surface Transforms’ transition into profitability and operational cash generation.
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