Business
New OEM 8 Contract for Additional Sales
New OEM 8 Contract for Additional Sales.
About this update from Surface Transforms Plc
[{"type":"text","content":"\n \n \n \n RNS Number : 8341F\n Surface Transforms PLC\n 24 March 2022\n \n \n \n \n The information contained within this announcement is deemed by the Company to constitute inside information stipulated under the Market Abuse Regulation (EU) No. 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018. Upon the publication of this announcement via the Regulatory Information Service, this inside information is now considered to be in the public domain.\n \n \n 24 March 2022\n \n \n \n \n \n Surface Transforms plc\n \n \n (\"Surface Transforms\" or the \"Company\")\n \n \n \n \n \n New OEM 8 contract for additional sales\n \n \n \n \n \n Surface Transforms plc (AIM:SCE) is pleased to announce that it has signed a new contract with its existing customer, OEM 8 with a contract value of approximately £100m. This contract replaces the previously announced contract from September 2020 which was valued at approximately £27.5m. This increased contract value of over £70m is driven by both significantly increased demand for this particular model of OEM 8 and the contract being extended to 2027. \n \n \n \n \n \n The contract remains priced in pounds sterling and increases the Company's sales forecast by £4m in 2023, £11m in both 2024 and 2025 and by £20m in both 2026 and 2027, taking the Company's overall lifetime order book to over £180m. \n \n \n \n \n \n By way of background, in September 2020 the Company announced its selection by OEM 8 to be the standard fit, sole supplier of the carbon ceramic brake disc on both axles of a new model variant. At that time, the start of production (\"SOP\") was scheduled for the summer of 2021 and the contract was for 3 years with an estimated lifetime value of £27.5m. Whilst OEM 8 delayed the SOP (now scheduled for spring 2022), the market response to the car has exceeded their order expectations; the customer has therefore been in discussions with all impacted suppliers to increase capacity and output. \n \n \n \n \n \n This new contract clearly has capacity and overhead implications. In several separate announcements, the Company has said that by mid 2023 we will have installed capacity for £50m sales p.a. which is enough to accommodate the extra volumes from this new contract....