Quoting from Paul Skilleter’s Salloon Car book:
Power output for 1937 was slightly up, from 102 to 104bhp; the compression height of the pistons was increased by approximately 0.25 inch with a corresponding increase in block height for better heat dispersal, and a shim-type gasket replaced of the copper/asbestos type — all this was because early engines had shown signs of bad bore distortion and consumed large quantities of lubricating oil. Then Heynes found that when the very stiff cylinder head was bolted down, the soft copper-asbestos head gasket compressed unequally, causing distortion of the block face and bores; this was proved by bolting the head directly to the block without a gasket, after which the bores remained perfectly round. He found that the solution lay in using the Corrujoint gasket which was a 0.0015 inch thick cupro-nickel sheet with indentations around the bores and waterways; SS were one of the first to use such a gasket in production, though the type (usually in steel) subsequently became widely used both in Britain and America. It was the rise in compression ratio stemming from the thinner head gasket which largely brought about the extra couple of horsepower.
Skilleter, Paul. Jaguar Saloon Cars - The Pushrod Jaguars (ePub Expert Series) . PJ Publishing. Kindle Edition.