LONDON (ShareCast) - (Sharecast News) - Surface Transforms reported a £0.94m improvement in revenues in its preliminary results on Monday, to £1.45m, while its gross margin narrowed to 59.8% from 63%.
The AIM-traded firm said its research costs increased to £1.5m for the year ended 31 December, compared to £1.11m for the equivalent period, being the seven months to 31 December 2018.

It said that was partially offset by accrued research and development tax credits of £0.44m, compared to nil in the prior period.

Other administrative expenses increased to £1.06m from £0.97m.

The company's loss after tax narrowed to £1.32m from £1.57m, and its loss per share shrank to 0.97p from 1.29p.

Cash used in operating activities decreased to £0.68m from £1.97m, with cash at period end standing at £0.77m, rising from £0.32m.

Capital expenditure in the period totalled £0.62m, compared to £0.14m, with tax credits of £0.52m received in the period, against an accrual of £0.4m.

Post year-end, the company noted that it raised £2.25m after fees in a "significantly oversubscribed" placing and open offer.

"Surface Transforms continues its journey from a development company to a mainstream volume automotive supplier with a site capable of revenues of £50m per year in a market that could ultimately reach £2bn per annum," said chairman David Bundred.

"In 2020 we expect to build on this foundation by winning further contracts, completing the system integration of original equipment manufacturer (OEM) 'Production Cell One', and begin delivering both production and development parts on the new contracts."

Bundred said that, while the Covid-19 coronavirus pandemic would "clearly impact" 2020, the company expected the impact thereafter to be minimal.

"The board maintains previous guidance that it will reach positive adjusted EBITDA in 2021 and profits before tax in 2022."

At 1211 BST, shares in Surface Transforms were up 0.24% at 20.55p.

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