LONDON (ShareCast) - (Sharecast News) - Carbon fibre-reinforced brake disc manufacturer Surface Transforms has been notified of its selection as a tier-one supplier of a carbon ceramic brake disc to its existing mainstream customer, it announced on Thursday, which it previously described as 'OEM 5'.
The AIM-traded firm said prototype orders had been received, and were now being fulfilled.

All terms and conditions were carried over from the master purchase agreement with the customer, which was signed in mid-2019.

The car involved is a "facelift" to an existing internal combustion engine model, with start of production in the first quarter of 2024, with its brake discs to be fitted as an option to the front axle.

Surface Transforms said the lifetime value of the contract was expected to be around €5m, spread over the five years from 2024 to 2028.

The contract would not have a significant impact on Surface Transforms' production capacity, the board said, as it was part of the expectations it outlined at its February fundraising.

However, separately it had been reviewing its manufacturing capacity strategy, with a view to both reducing timescales and costs.

"The significance of this relatively small contract lies in it being the first example of the implementation of the multi-year 'carry-over' agreement concluded with OEM 5 at the time of the initial contract award in July 2019," said chief executive officer Kevin Johnson.

"This envisaged further awards, of varying sizes, over several years."

A further award in 2020 did not happen, Johnson said, because of a Covid-19-induced programme cancellation by the customer.

"It is good to be back on track.

"The engineers in both companies are now working on the next vehicle brake disc that is available for award over the next year."

At 1531 BST, shares in Surface Transforms were up 5.16% at 68.88p.

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