- Surface Transforms's H1 pretax loss has widened to £471,000, from a year-earlier loss of £372,000. Turnover increased to £623,000, from £558,000.

"The Company continues to pursue the twin track approach of achieving break even through both retrofit sales and "near Original Equipment Manufacturer (OEM)" sales in parallel with winning "game-changing" OEM opportunities in the automotive and aerospace markets," it said in a statement.

"In respect to achieving our break even objective, the comparison between the two periods is impacted by the inclusion in HY13 of a £154k non-recurring technology transfer payment.

"Excluding this contribution, the growth in underlying sales - race products to a major European brake manufacturer and retrofit road car sales - between an unchanged £623k for HY14 and a revised £403k for HY13 demonstrates underlying growth of 54%. Gross profit in HY14 of £293k represents an improvement of 30% on the normalised HY13 gross profit of £226k.

"The increase in research costs is largely due to engineering activities associated with the commissioning of the new CVI plant. As previously announced, we intend to use part of the proceeds raised in the November 2014 fund raising, to recruit additional engineers to support ongoing OEM programmes.

"Consequently, these costs albeit for different reasons, are expected to increase in the future and we have budgeted for this accordingly.

"The significant improvement in retrofit sales reflects the actions taken last year (and reported in our 2013 interim statement) of both selling directly to end users - the Company has now appointed its own German based sales executive - and appointing "direct" distributors who are nearer to our ultimate customers (e.g. motorsport support companies and track day management companies).

"The effects of these have been positive and in line with our expectations - both increasing end user price competitiveness and improving market intelligence, resulting in increased sales.

"In parallel, but arguably of greater importance, the Company has made excellent progress on its "game changing" OEM opportunities. In the period, the Company announced the award of a significant pre-production contract with a tier one aerospace supplier and can report that the activities required to complete aircraft certification are on target.

"We can also report that, over the past few months, the customer has accelerated testing on the second phase of this aerospace relationship - the smaller aircraft segment, being of potentially greater commercial significance to the customer."

Story provided by