SPECIALIST brakes manufacturer Surface Transforms increased sales and reduced losses in the six months to November 30, it reported today.
It said is also in negotiations to raise up to £1m of new equity.
The Ellesmere Port-based firm designs and makes high-performance brakes from carbon fibre reinforced ceramic composite materials which it has developed.
It is one of only two manufacturers of carbon-ceramic brake discs in the world and the company’s products are being commercialised with the help of major industrial partners.
Its brakes and materials are used in Formula 1 cars and military jets.
Turnover rose 19.1% to £405,000 and losses before tzx and exceptional restructuring costs fell from £433,000 to £429,000.
Chairman David Bundred welcomed the increase in sales but said it was less than anticipated due to technical problems, which have now been resolved.
However, the company expects to increase sales further after adding Porsche and Ferrari to its range of retrofit partners for its automotive brake range, and it is one final round of testing away from stepping up the commercialisation phase of its aircraft brakes range.
Mr Bundred said key to further progress is a competitive pricing structure and the firm believes it can halve production costs over the next three years.
However, some of the measures needed to achieve this will require working capital, and he said the board is in discussions with potential investors who could provide a minimum of £300,000, or up to £1m of new equity.
He said: “If and when these discussions are finalised, it is the directors’ intention to allow all shareholders some ability to participate in the fundraising at the same price.
“There is, however, no guarantee that any such equity finance will be forthcoming from the potential investors with whom the company is currently in discussion.”
The company currently has a cash balance of £391,000, compared with £655,000 at the same time in 2011.
It had expected to achieve a cash break even point in the current financial year, but Mr Bundred said today that this was now not likely to happen until the financial year to May 2013.