Knowsley-based high-performance brake specialist Surface Transforms said production problems had eased but minor disruptions continued.
The company will hold its annual shareholder meeting in London at 10am this morning, after which CEO Kevin Johnson will report to shareholders on sales and business progress.
This presentation reveals that while manufacturing output continues to improve, it has not yet reached target levels.
Turnover for the six months to 30 June 2023 is expected to be around £3.3m (H1 2022: £2.9m), an increase of 14% overall.
Of this total, disc production increased by more than 80% during this period, reflecting production improvements made during 2023. The remainder of sales for both periods is pre-production development revenue.
While the production difficulties previously mentioned in the first quarter deal update have not recurred, the company continues to experience minor production disruptions on a discrete basis that are slowing production increases.
As mentioned earlier, overall capacity shortfalls mean that a quarterly outage cannot be recovered within that quarter, but will recover as capacity runs for the rest of the year. increase.
Installation of additional capacity continues, and the company still expects to have excess capacity above current demand in Q4 2023.
After that, the company plans to add more capacity to meet the next phase of change in demand, as production starts with 10 OEM contracts towards the end of 2024.
At the launch, the company continues to expect to benefit from both this additional capacity and the ongoing resolution of the production disruptions, and as such will reiterate its previous guidance for 2023 and 2024. .
Surface Transforms is expected to provide a pre-close update on half-year results in July and full half-year results in September.
Over the past 20 months, the company has introduced capacity to support contract sales from £2m per year in 2020 to over £30m per year in 2024.
Earlier this year, a deal update in April revealed that industry-wide supply chain issues with furnace insulation, particularly furnace issues, had a significant impact on output over the past six months.
The company then made changes to that process in Q1 2023, which was successful, and the subprocess ran at the target rate for over a month.
But he warned that overcoming production problems would not restore the financial impact.