The paper describes the design and construction of an axial flux permanent magnet machine in which the teeth are manufactured from compacted insulated iron powder and the core back is formed from a strip-punched lamination formed, into a circle to grip the teeth. This new method of construction overcomes the problems associated with punching and winding axial flux machines formed using index-punched spirally wound laminations (the current state of the art). The construction has been shown to be mechanically stable and rather simple to manufacture. As well as production advantages it offers very high fill factor coils which can significantly enhance the performance of this type of machine