Surface Transforms (AIM: SCE) - Bad Results or Good Results?
On 16 February Surface Transforms the carbon/ceramic brake specialists issued its half-yearly results. The Chairman, David Bundred, reported that “he was encouraged to report continuing progress in line with guidance issued in November”. However, one popular investment website described these results on Twitter as “DIRE” highlighting increased losses and cash “almost gone”. So, who’s right? Are the results dire or encouraging?
Cash Almost Gone – NO! In November 2014 Surface Transforms set out to raise £1.5 million in a placing and open offer. These funds are required by the Company to commence a £3.5 million, three year investment programme which is targeted to reduce production costs by 50% and increase manufacturing capacity to 10,000 discs per annum. Whilst the fund raising was only partially successful, raising gross proceeds of £1,067,000, the Chairman reported in the results that the Company is in discussions with potential investors to fund the shortfall. Even without this additional support the Company would have sufficient cash resources…