Manufacturer of carbon fibre reinforced ceramic materials, Surface Transforms PLC (LON:SCE), saw its share price dented after a disappointing half-year update.
The company had warned a couple of months ago that half-year losses would more than double from last year on sales that had more than halved, and so it proved, but it was the downbeat outlook for the full-year that sent the shares 12.4% lower in the first hour of trading.
The six months to the end of November 2016 saw turnover slump to £327k from £782k the year before, largely because of the absence this time round of £337k of sales to a customer in the motor racing industry.
Loss before tax widened to £976k from £430k the year before, with the timing of a tax credit not helping matters; in the 2015 period, Surface Transforms had received a credit of £306k, whereas this time round a tax credit of £356k did not arrive until January 2017.
Sales for the full year are expected to be comparable with the prior year on a like for like basis, but losses are expected to be deeper, albeit within the current range of market expectations.
The company also said it is in detailed discussions with six mainstream car producers about possible deals, and noted that if it landed two in particular out of the six it would not have sufficient capacity to service the customers, and would therefore need to raise fresh capital.
Administrative expenses rose £104k to £432k from the year before, reflecting the move to a new site at Knowsley and, towards the end of the half-year, the cost of running two sites.
It continues to experience problems with the gas main at its Knowsley, where it has “tin-tacked” the building contractors it had called in to sort the problem and is now looking for alternative contractors.