REG - Hardide PLC - Year End Trading Update

HardideAnnouncement

13/10/2022 07:01

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RNS Number : 6922C  Hardide PLC  13 October 2022

 

Prior to publication, the information contained within this announcement was
deemed by the Company to constitute inside information, as stipulated under
the UK Market Abuse Regulation. With the publication of this announcement,
this information is now considered to be in the public domain.

 

13 October 2022

 

Hardide plc

("Hardide", "the Group" or "the Company")

 

Year End Trading Update

 

Hardide plc (AIM: HDD), the developer and provider of advanced surface coating
technology, is pleased to provide an update on trading for the financial year
ended 30 September 2022 (subject to audit and year-end adjustments) ("FY22").

 

Revenues for the year to 30 September 2022 are expected to be in line with the
Board's expectations of approximately £5.0m, up almost 40% on the previous
year. As reported in the Trading Update issued on 14 July 2022, the volatility
in the Company's key markets has influenced revenue for FY22. This was driven
by lengthened raw material lead times for customers and delays in certain
project orders originally scheduled for the final quarter of FY22. None of
these delayed orders have been lost and will now be recognised in the new
financial year starting 1 October 2022. The Group is not experiencing any
negative effect because of current exchange rates.

 

The Board is grateful for the support of new and existing investors in the
Group's recent fundraising. The Group had approximately £0.7m of cash at 30
September 2022 and continues to maintain strict cost and investment discipline
as well as continuing to explore options for raising new working capital
support. Approximately half of the delayed cash receipt from a significant
customer was received prior to year-end, with the balance expected soon. The
Group is also pleased to be in final contract negotiations relating to a sale
and leaseback arrangement for its property in Martinsville, USA which will,
when completed, make a substantial contribution to the Group's financial
position.

 

Despite well-documented headwinds, we start the current financial year with a
strong order book and, with revenues from certain contracts arriving in this
financial year 2023, the Board maintains a positive outlook for the business
beyond the near term as supply chains stabilise and markets continue their
recovery. The Company sees clear potential for the current financial year to
show considerable improvement on recent years and the Board is optimistic
about the future.

 

A summary of our progress in each of our key customer sectors is set out
below.

 

Energy

The major oil service companies are seeing rising demand, however, the supply
of components to be coated by Hardide is being restricted by raw material
availability and machining capacity. We have good visibility on orders and
this demand is expected to reach us in the next few months. Components for a
major project order for coating mesh sand‑control screens, originally
scheduled for the last financial quarter, were received just prior to the year
end. As a result, revenue will now be recognised early in the new financial
year. Another large project order received from a North American oil and gas
customer and currently being processed will also be completed early in the new
financial year. Several new and potentially significant, high-volume
applications are in development in this sector.

 

Two large orders for coating gas turbine compressor blades were completed in
FY22, with further similar orders expected during the current financial year.
Trials are ongoing with several other turbine producers.

 

Testing is underway to obtain data to show the beneficial effects of the
coating in hydrogen applications, as well as separate testing in a hydrogen
production application.

 

Aerospace

Regular orders are now being received for components for the Airbus A320,
A330, A380 and A400M series aircraft. Further applications for Airbus are in
development and testing. Orders continue to be received for the BAE
Eurofighter Typhoon. Technical discussions and trials are also underway with
several other OEM and MRO companies.

 

Industrial

Demand from our major industrial pump customer in North America has remained
buoyant throughout the past year and is expected to remain so. As the airline
industry recovers, we are seeing signs of increasing demand for the airport
X-ray screening machine application. We expect much higher revenues from this
customer in the current financial year as they increase their production
output. Trials are still taking place with the large EV manufacturer on
components used in the battery production process.

 

 Enquiries:
 Hardide plc

 Robert Goddard, Non-Executive Chairman               Tel: +44 (0) 1869 353 830

 Philip Kirkham, CEO

 Jackie Heddle, Communications Manager
 IFC Advisory                                         Tel: +44 (0) 20 3934 6630

 Graham Herring

 Tim Metcalfe

 Florence Chandler
 finnCap - Nominated Adviser and Joint Broker         Tel: +44 (0) 2072 200 500

 Henrik Persson/ Abigail Kelly (Corporate finance)

 Barney Hayward (ECM/Broking)

 Allenby Capital - Joint Broker                       Tel: +44 (0) 20 3328 5656

 Tony Quirke - Sales and Corporate Broking

 Jeremy Porter/ Freddie Wooding - Corporate Finance

 

Notes to editors:

www.hardide.com (http://www.hardide.com/)

 

Hardide develops, manufactures and applies advanced technology tungsten
carbide/tungsten metal matrix coatings to a wide range of engineering
components. Its patented technology is unique in combining in one material, a
mix of toughness and resistance to abrasion, erosion and corrosion; together
with the ability to coat accurately interior surfaces and complex geometries.
The material is proven to offer dramatic improvements in component life,
particularly when applied to components that operate in very aggressive
environments. This results in cost savings through reduced downtime and
increased operational efficiency. Customers include leading companies
operating in the energy sectors, valve and pump manufacturing, industrial
engineering and aerospace industries.

 

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