Surface Transforms Posts 120% Revenue Surge and Targets EBITDA Breakeven in 2026

Surface Transforms FY25 trading: 120% revenue surge and narrowing losses

Surface Transforms has delivered a big step forward in 2025. Revenue rose approximately 120% to £18.0m, with a record second half of £9.9m after £8.1m in H1. Losses narrowed sharply too, with an operating loss before interest and tax of about £8.7m, down from £23.4m in 2024.

This is the strongest indication yet that production is scaling and the operational reset is working. Demand remains strong, according to management, and the company is guiding to £27.0m revenue in 2026 with EBITDA breakeven.

Key numbers at a glance

Metric	Figure	Context
Revenue FY25	£18.0m	Up circa 120% (FY24: £8.2m)
H1/H2 revenue split	£8.1m / £9.9m	Record H2
Operating loss (EBIT) FY25	~£8.7m	Improved from £23.4m in FY24
H1/H2 operating loss	£5.2m loss / £3.5m loss	Losses reduced in H2
Gross cash at year end	£1.0m	Includes £0.2m restricted for capex
Capital expenditure (capex) FY25	£8.6m	ERDF loan of £13.2m fully utilised
Customer prepayments	£13.3m	Up from £12.9m at 30 June 2025
Yield progression	Q1 49% → Q3 70% → Q4 77%	80% target for Q1 2026
New furnace	Operational by end Q2 2026	Supports higher output and revenue
FY26 outlook	~£27.0m revenue	EBITDA breakeven expected

Operations update: yields improving and capacity coming

The story under the bonnet is improving yield and stability. Yield is the percentage of product that meets quality specification. It moved from 49% in Q1 to 70% in Q3 and 77% in Q4 as new equipment, automation and process improvements bedded in. Management still aims for 80% in Q1 2026.

Importantly, the range of weekly yield performance narrowed in H2, suggesting the processes are becoming more repeatable. Apart from additional furnace capacity, all major improvement programmes are nearing completion, and no further significant changes are planned in the near term. The new furnace is being installed and commissioned, with operations targeted by the end of Q2 2026. That should unlock further output and help the revenue ramp thereafter.

Cash, capex and prepayments: tight but manageable

Year-end gross cash was £1.0m, of which £0.2m is restricted for capital expenditure. The company characterises cash as tight but manageable. Capital expenditure rose to £8.6m in FY25, and the £13.2m ERDF loan has now been fully deployed into the factory and equipment, as expected.

Customer prepayments stood at £13.3m at year end, slightly higher than the £12.9m at 30 June 2025. Prepayments are cash received from customers ahead of delivery, and they often signal both demand and a degree of customer commitment to future production slots.

2026 guidance: £27.0m revenue and EBITDA breakeven

Management expects FY26 revenue of approximately £27.0m and EBITDA breakeven. EBITDA is earnings before interest, tax, depreciation and amortisation – a proxy for cash operating profitability. Moving to EBITDA breakeven would mark a key milestone on the path to self-sustaining operations.

Given the improved yields, record H2 revenue and the additional furnace capacity due by end Q2 2026, the guidance looks grounded in operational progress. The critical factor is consistent execution at or above the 80% yield target while bringing the furnace online as planned.

Why this update matters for investors

FY25 looks like an inflection year. The business has demonstrated it can lift output and convert that into materially higher revenue while shrinking losses. In short, the manufacturing system is starting to perform more like a production line and less like a pilot plant, which is exactly what shareholders have wanted to see.

The outlook matters too. A credible route to EBITDA breakeven in 2026, supported by visible capacity additions and improving yield, sets a clearer line of sight to profitability. Demand remains strong, and customers are said to be encouraged by the progress.

My take: the positives and the pinch points

What looks encouraging

• Growth with momentum: £18.0m revenue for FY25, with a record £9.9m in H2.
• Losses narrowing: operating loss reduced to about £8.7m for FY25, with a marked improvement in H2.
• Operational traction: yield climbed from 49% to 77% through the year, with a tighter weekly range in H2.
• Capacity catalyst: a new furnace slated to be operational by end Q2 2026 to support higher output.
• Customer commitment: prepayments edged up to £13.3m, suggesting continued demand.

What still needs proving

• Hit and hold 80% yield: Q4 at 77% is close, but the target is 80% in Q1 2026. Consistency will be key.
• Cash headroom: gross cash of £1.0m is thin. Management says it is manageable, so execution and working capital discipline matter.
• Commissioning risk: the furnace is a swing factor for output from H2 2026. Timely installation and ramp-up are important.
• Cost base vs scale: EBITDA breakeven in FY26 depends on throughput and stable processes. Any slip in yield or timing would pressure that goal.

What to watch in H1 2026

• Yield at or above 80% in Q1 2026 and the stability of weekly performance.
• Furnace installation and commissioning milestones ahead of the end Q2 2026 target.
• Order flow and customer programme updates to underpin the £27.0m revenue outlook.
• Cash movements and working capital, particularly against the backdrop of higher production.

Bottom line: moving closer to profitable scale

Surface Transforms is closer to where it needs to be. The company has grown revenue by around 120%, cut operating losses by almost two thirds, improved yields materially and lined up extra capacity for 2026. The guidance for £27.0m revenue and EBITDA breakeven is ambitious but now feels anchored in operational progress rather than hope.

There are still execution risks around yields, cash and the furnace timetable. But on balance, FY25 reads as a meaningful operational turnaround. If the team delivers stable 80%+ yields and brings the new furnace online on time, 2026 could mark the transition from promise to sustained performance.