Surface Transforms (SCE) AI Stock Analysis

• Market Cap: £20.18M
• Dividend Yield: N/A
• Average Volume (3M): 10.51M
• Price to Earnings (P/E): ―
• Beta (1Y): 0.84
• Revenue Growth: 12.73%
• EPS Growth: 67.16%
• Country: UK
• Employees: 147
• Sector: Consumer Cyclical
• Sector Strength: 66
• Industry: Auto - Parts
• EPS (TTM): -0.01
• Shares Outstanding: 1,302,072,600
• 10 Day Avg. Volume: 11,033,827
• 30 Day Avg. Volume: 10,505,021
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: £1.50
• Price Target Upside: 0.00%
• Rating Consensus: Hold
• Number of Analyst Covering: 1

• Rating: 49 Neutral
• Price Target: 1.50p ▲(0.00% Upside)

Surface Transforms' overall stock score of 49 reflects its financial challenges and mixed technical signals, offset by positive corporate events. The company's financial instability and negative profitability weigh heavily on the score. However, recent operational improvements and strong insider confidence provide a positive outlook for future growth.

Surface Transforms Business Overview & Revenue Model

Company Description

Surface Transforms (SCE) is a UK-based manufacturer specializing in advanced ceramic brake discs for the automotive and aerospace sectors. The company focuses on producing lightweight, high-performance braking systems utilizing its proprietary carbon-carbon technology, which enhances braking efficiency and reduces vehicle weight. Surface Transforms caters primarily to high-performance sports cars, electric vehicles, and the aerospace industry, aiming to provide superior safety and performance through innovative materials and engineering solutions.

How the Company Makes Money

Surface Transforms generates revenue primarily through the sale of its high-performance ceramic brake discs to automotive manufacturers and aerospace companies. The company's revenue model is based on direct sales to Original Equipment Manufacturers (OEMs) and aftermarket suppliers, capitalizing on the growing demand for lightweight and efficient braking systems. Key revenue streams include long-term supply contracts with major automotive brands, which allow for predictable income, and custom orders for niche applications in the aerospace sector. Additionally, Surface Transforms may benefit from partnerships with automotive companies that are transitioning to electric vehicles, as their technology aligns well with the needs for lightweight and efficient components. The company also engages in research and development to innovate and expand its product offerings, which can lead to increased sales opportunities and market expansion.

Surface Transforms Financial Statement Overview

Summary

Surface Transforms is experiencing revenue growth, but significant challenges remain in profitability, cash flow generation, and financial stability. The company relies heavily on debt, posing potential financial risks despite increasing revenues.

Income Statement

Surface Transforms has shown revenue growth over the years, with a notable increase from 2023 to 2024. However, the company remains unprofitable with negative net income and EBIT margins, indicating ongoing operational challenges. The negative EBITDA further highlights the company's struggle to cover operating expenses. Despite the growth in revenue, the high cost structure and negative profit margins are significant concerns.

Balance Sheet

The balance sheet reflects a company with increasing debt levels, as seen in the rising debt-to-equity ratio. The equity ratio has decreased, indicating a higher leverage and potential risk. The return on equity is negative due to continued net losses. These factors point to financial instability and reliance on external financing, raising concerns about the company's long-term financial health.

Cash Flow

Operating cash flow remains negative, indicating that core business operations are not generating cash. Free cash flow is also negative, and there is no free cash flow growth, which limits the company's ability to invest in growth opportunities without external financing. The operating cash flow to net income ratio is unfavorable, reflecting poor cash conversion and efficiency issues.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	8.24M	7.31M	5.12M	2.37M	1.95M
Gross Profit	4.11M	4.17M	3.08M	1.55M	1.31M
EBITDA	-21.12M	-19.28M	-4.90M	-3.77M	-2.31M
Net Income	-22.35M	-19.56M	-4.78M	-3.95M	-2.30M
Balance Sheet
Total Assets	25.45M	31.95M	40.17M	26.37M	8.77M
Cash, Cash Equivalents and Short-Term Investments	462.00K	7.41M	14.92M	12.97M	1.06M
Total Debt	7.45M	2.40M	2.73M	3.29M	1.82M
Total Liabilities	15.13M	8.22M	6.62M	5.48M	3.10M
Stockholders Equity	10.32M	23.73M	33.55M	20.89M	5.68M
Cash Flow
Free Cash Flow	-18.34M	-18.31M	-14.81M	-7.67M	-1.66M
Operating Cash Flow	-14.03M	-10.26M	-6.46M	-3.73M	-1.01M
Investing Cash Flow	-4.15M	-8.05M	-5.34M	-3.95M	-643.00K
Financing Cash Flow	12.61M	9.50M	16.42M	19.61M	1.96M

Surface Transforms Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1.50
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:SCE, the sentiment is Positive. The current price of 1.5 is above the 20-day moving average (MA) of 1.40, above the 50-day MA of 1.16, and above the 200-day MA of 0.61, indicating a bullish trend. The MACD of 0.12 indicates Negative momentum. The RSI at 60.34 is Neutral, neither overbought nor oversold. The STOCH value of 57.15 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GB:SCE.

Surface Transforms Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CTA	72 Outperform	£29.07M	4.30	35.77%	―	-18.48%	30.21%
ABDP	64 Neutral	£320.21M	30.12	8.09%	0.59%	12.52%	-22.03%
Sector *	62 Neutral	£1.74B	9.21	4.55%	3.51%	0.65%	-43.22%
TRT	62 Neutral	£20.70M	14.44	26.18%	―	30.79%	-11.38%
AUTG	62 Neutral	£5.73M	―	-12.09%	―	-14.22%	-32.34%
CAR	58 Neutral	£34.80M	―	-44.37%	―	-8.33%	74.38%
SCE	49 Neutral	£20.18M	―	-131.28%	―	12.73%	67.16%

Surface Transforms Corporate Events

Surface Transforms Secures Strong Shareholder Support at AGM

Surface Transforms announced that all resolutions at its Annual General Meeting were passed, including the re-appointment of auditors and the re-election of a director. This successful AGM reflects strong shareholder support and positions the company well for continued growth in the automotive brake disc market. The company’s proprietary technology and market position as a leading producer of carbon-ceramic brake discs are expected to bolster its competitive edge and stakeholder confidence.

Surface Transforms Reports Strong H1 2025 Performance and Operational Improvements

Surface Transforms has reported significant improvements in manufacturing yield and output for the first half of 2025, with revenue increasing by 72% compared to the previous year. The company has addressed production challenges, resulting in improved operational performance and financial sustainability. Key customers have supported the company with cash advances, and further operational improvements are expected. A management change has occurred with Gareth Laker stepping in as COO. The company anticipates continued revenue growth and operational stability in the second half of the year.

Surface Transforms Chairman Increases Stake with Major Share Purchase

Surface Transforms announced that Ian Cleminson, a Person Discharging Managerial Responsibilities (PDMR), purchased 2,688,172 ordinary shares of the company, increasing his stake to 0.42% of the total voting rights. This transaction may indicate confidence in the company’s future prospects and could impact investor sentiment positively.

Surface Transforms PDMR Share Purchase Announcement

Surface Transforms announced that Steven Harrison, a Person Discharging Managerial Responsibilities (PDMR), purchased 512,676 ordinary shares of the company at a price of 0.9753 pence per share. This transaction reflects a minor increase in his stake, representing 0.04% of the total voting rights, potentially indicating confidence in the company’s future prospects.

Surface Transforms Announces Change in Major Shareholder Holdings

Surface Transforms PLC has announced a change in its major holdings, with Kave Sigaroudinia reducing their voting rights from 7.8% to 1.7%. This shift in shareholder structure may impact the company’s governance and strategic decisions, potentially influencing its market positioning and stakeholder interests.

Surface Transforms Reports 2024 Results Amid Operational Challenges

Surface Transforms announced its full-year results for 2024, reporting a 13% revenue increase to £8.2 million, driven by a 21% rise in disc sales. Despite this growth, the company faced significant operational challenges, including production inefficiencies and capacity constraints, leading to a loss after taxation of £22.3 million. The company has been focusing on improving operational efficiency and capacity through a £13.2 million capital investment program, supported by customer financial and operational assistance. The Board remains optimistic about 2025, expecting improved financial performance as production capacity and yield rise.

Surface Transforms Appoints Ian Cleminson as Permanent Non-Executive Chair

Surface Transforms has appointed Ian Cleminson as the permanent Non-Executive Chair, following his interim role since November 2024. Cleminson’s leadership during a challenging period has been pivotal in refocusing the company’s operations and improving cash management, positioning the company for future success.