The Aston Martin news is certainly the one big bright spot - this seems to be if anything progressing faster than expected, is near-term bringing increased revenues and is very good news.
As for the rest.....I am a believer, and to have got this far with such continued interest from the mighty OEMs involved means that their interest is serious and the rewards large. But progress is truly snail-like.
One thing is for certain. Once SCE do finalise production contracts with the OEMs, they'll be locked in for many years to come. No-one else would want or be able to go through this prolonged cycle of testing, re-calibrating, re-qualifying etc etc!
Finncap retain their 24p target price and note that the results are consistent with their full year expectations.
They reiterate what we know already, but do have a couple of additional snippets worth reading:
"Further (to the increased Aston Martin revenues), progress with near OEMs (particularly Koenigsegg and Singer) is such that we expect a strong jump in volumes in FY2019E."
"In our view, the wild card is OEM5 who have expressed a strong desire to use SCE
discs and have a less onerous approval process versus OEM3."
"Steady progress elsewhere: It is pleasing to see that the move to the new, much
larger, Knowsley facility has been a success. The Small Volume Production Cell is
fully up and running and it is this cell that will fulfil the Aston Martin contract. The first larger production cell is coming together well and SCE expects to be able to deliver off-tools samples in the current calendar year. On VDA6.3, the relevant German OEM(s) will conduct the audit when product testing is complete."
The most interesting point about the new FD is (as posted elsewhere by longshanks) "that he comes from Bentley Motors, themselves part of VAG - a group that buys many thousands of carbon ceramic disks each year."
"Speaking of which, the EP9s brakes are totally bespoke for the application. The automaker partnered with noted brake specialist Alcon to create new Surface Transforms carbon ceramic brake discs. The end result is twice the brake torque capability of a modern GT3 race car, with the front rocking large 408 mm by 40 mm (16.1-inch by 1.6-inch) discs, while the rear gets 408mm by 36 mm (16.1-inch by 1.4-inch) discs. Calipers at both ends are 6-pot units. To keep the discs nice and chilly, theres also carbon fiber air intakes that feed them with fresh atmosphere."
Steady as she goes - waiting for major news flow and the subsequent ramp-up.
Now where did I read that recently ?....oh yes, just about the time of the results, last month ;-))
I really like these steady rises. And yes, the anticipation of news to come. Hopefully well not have to wait long till we see last years highs again, and beyond !!!
Yes, G, I was expecting a bit of a pull back this morning because the City, generally, does not like delays and increased losses. But the sp is holding up well, which means that overall the results have been well received and a bit of leeway given for the factory move, maybe. Hopefully, by the end of the year we'll have more contractual commitments and a bit more visibility of future production prospects.
Seems I was too late. My funds had already been assigned to purchasing the additional excess by default.(I had missed the deadline to opt for return of cash!)
Relieved that it worked in my favour.(for once)
Now the proud (prospective) owner of of a few more SCE shares at 15.5, and a few more £s in SCE's expansion fund.
What's not to like ?
"The new Surface Transforms factory is located in buildings that used to form part of the Eastman chemicals site in Knowsley.
At first I was unsure on whether I had the right location. A glimpse past the security lodge with its zealous security guard, convinced me that the sat nav had brought me to the correct place: 100m away, in 2 meter high red letters was the company logo proudly painted on a factory wall.
The building is much larger than the premises previously housing the company. There are a few offices at the "front of house" with a substantial factory floor space at the back. We were greeted in the large communal "board room" with all the board other than Kevin D'Silva on hand.
We were given a thorough candid presentation of the business, the factory move and an update on the commercial prospects/game changer opportunities. Kevin Johnson did most of the talking and seemed relaxed and at home in this environment. Occasionally David Bundred chipped in the odd comment to reiterate points. After the factory tour a tasty sandwich and presentation, the company gave all attendees a copy of the Hardman broker note.
For the factory tour, the visitors were split into two groups. I went with a group led by Kevin Johnson, the other group was led by David Bundred.
The first stage of the tour involved a walk through demonstration of the separate manufacturing processes. All of the equipment from Ellesmere Port has been relocated and all of it was very active. We saw how the PAN material was transformed from a roll of "cloth" into its layered, processed and machined final form. Manufacturing involves some patent protected elements with other elements using more standard processes and machinery. All processes though had some level of integrated company know-how used to streamline the manufacturing process.
I spoke to several of the operators on the shop floor. One I talked to had only recently joined ST having been made redundant at Bosch late last year. I asked him what he made of the company and his work. He said he really enjoyed the variety of work and the fact he was actively involved in all areas of the manufacturing process. For him Bosch is a company on the "way out" whilst ST is a company of the future. I got a similar story from the other operators - all were really motivated and enthusiastic about the business. Many are shareholders themselves and clearly want the business to be a success.
I have to say though, as someone involved in heavy industry myself - I wasn't overenthusiastic about the working plant. Whilst clearly working at or close to capacity, there was a lot of inventory on view. Lots of disks in various forms being held as idle intermediate inventory awaiting the next stage in the manufacturing process.
And yet - I needed a reminder that this is what is to become the SVP: the Small Volume Production cell. It is currently the only production cell.
We moved through a door, and my jaw dropped.
The next space can be best described as a tardis. A massive factory floor. Empty, but for the massive CVIST furnace grinning in the corner. A gaping open mouth at the front, hungry to be fed green rotors for chemical vapour infiltration. Impressive feed and exhaust pipes already fitted and, to the side, a layout drawing illustrating where all the new equipment is due to be installed. This space is a few months away from becoming OEM Cell 1. A space dedicated to efficiently churning out 20,000 disks per annum for OEM automotive customers.
The scale was impressive, but so was the design. The SVP is niche - it is inefficient - it is/was a pilot plant. The OEM production cells are serious high end manufacturing scale. Production will be lean with minimal intermediate inventory. They have one OEM production cell due to be commissioned this year - but elsewhere on the site they have space allocated for four more such cells. Excluding production fro
Unfortunately with SCE its always tomorrow,how may times have they put dates back then raise more funds to keep going. Probably best to wait until an order of significant does arrives but that looks to be at least a year away if we are lucky.
Snaffled a few more this morning at 15p......bargain.
Patience will be rewarded in the long term and today's sp offers stunning value for money. My average now stands at about 18 so I'm a bit underwater just now, but I'm not at all worried. Looking forward to future news and increased revenue streams as relationships with oems mature.
We'll beat those pesky Brembos in the end ;-)))
Mixed bag of good and bad news this morning.
Long report with lots of info and a few mysterious phrases which obviously mean something to the writer but are an insult to the Plain English Society (I must get round to joining that group!)
I wonder if the market will react negatively to this? Usually the word "delay" means a drop in sp.
for the patient this will provide another buying opportunity I guess.
I'm in for more if this happens.
The game changing is taking quite a while if you think back to where we were a year ago.......
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