REG - Hardide PLC - Interim Statement
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RNS Number : 1689F Hardide PLC 21 May 2026
This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law
by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is
disclosed in accordance with the Company's obligations under Article 17 of
MAR.
Hardide plc
("Hardide", "the Group" or "the Company")
Interim Statement for the six months ended 31 March 2026
Hardide plc (AIM: HDD), the provider of advanced surface coating technology,
announces its interim results for the period ended 31 March 2026 ("H1 2026" or
the "Period").
Financial Summary
Six months ended 31 March:
£m H1 2026 H1 2025 Change
Revenue 4.8 2.8 +2.0 (+71%)
Gross margin % 65% 54% + 11 ppts
EBITDA 1.6 0.4 +1.2 (+321%)
Operating Profit 1.3 - +1.3
Operating margin % 26.8% - +26.8 ppts
Basic earnings per share (p) 1.6 (0.1) +1.7
Cash balance at 31 March 1.5 1.0 +0.5
H1 Trading and Financial Highlights
· Record first half performance, delivering strong revenue growth,
significant margin expansion and a material improvement in profitability.
· Revenue increased by 71% to £4.8m (H1 2025: £2.8m), driven by
sustained new business momentum, including major contract wins with a leading
North American energy customer.
· Strong margin expansion with operating margins of 26.8% and return on
capital employed of 45.2% (H1 2025: both Nil), reflecting improved capacity
utilisation across the Group and continued operational efficiency gains.
· Positive earnings per share, underpinned by improved profitability.
· Strong cash generation, with cash balances growing to £1.5m at 31 March
2026, despite ongoing investment in working capital to support growth.
Outlook
· H2 revenues will benefit from the recently announced additional £1.8m
energy sector order, the new aerospace contract announced in December 2024
going into production, and the first order for industrial turbine blades since
2022.
· Macroeconomic cost pressures continue to be closely monitored and
have been largely offset through targeted pricing actions and operational
efficiencies, with process gas supplies for the remainder of the year now
secured at known costs.
· The Group remains well positioned to deliver full year performance in
line with its recently upgraded expectations and is on track to exceed its
strategic milestone of doubling revenues from the FY24 baseline ahead of the
original timeframe.
Matt Hamblin, Chief Executive, said:
"I am delighted to report a record first half performance, with strong revenue
growth and a meaningful improvement in profitability driven by a combination
of new contract wins and better capacity utilisation across the Group. This
bears testament to the hard work and achievements of the Hardide teams in both
the UK and USA.
Order intake and trading momentum remain encouraging as we head into H2 2026,
including further orders from our major North American customer, providing
good visibility into the second half. With modest working capital requirements
and significant existing capacity, the business continues to generate cash and
remains well capitalised to support its growth plans. We have taken proactive
steps to mitigate volatility in our input costs through a combination of
pricing measures and operational efficiencies, alongside securing supply for
the remainder of the year.
Looking ahead, the Board remains confident in the Group's prospects, with a
growing pipeline of work, strong customer demand and a scalable operational
platform to support further growth."
Enquiries:
Hardide plc
Matt Hamblin, CEO Tel: +44 (0) 1869 353 830
Simon Hallam, CFO
Cavendish Capital Markets Ltd - Broker and Nominated Adviser Tel: +44 (0) 2072 200 500
Henrik Persson/ Elysia Bough (Corporate Finance)
Dale Bellis / Jasper Berry (Sales)
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 as well as a reduced carbon footprint.
Customers include leading companies operating in the energy sectors, valve and
pump manufacturing, industrial gas turbine, precision engineering and
aerospace industries.
Performance Overview
I am pleased to report Hardide delivered a record performance in the first
half of 2026.
Revenues increased by 71% to £4.8m on the prior period (H1 2025: £2.8m),
driven by numerous new work wins, including from a major new North American
customer in the energy sector.
Gross margins improved to 65% (H1 2025: 54%), reflecting higher capacity
utilisation across the Group's US and UK facilities and continued operational
efficiencies.
We continued to invest selectively in the team to support growth in North
America and the UK, whilst maintaining focused cost discipline, driving a
significant increase in EBITDA to £1.6m (H1 2025: £0.4m), enabling the Group
to deliver operating profit of £1.3m and positive operating margin expansion
to 26.8% (H1 2025: break-even).
Basic earnings per share were 1.6 pence, compared with a loss of 0.1 pence in
H1 2025, reflecting the significant improvement in profitability.
The business generated net cash of £0.7m in the period, despite £0.6m of
additional investment in working capital to support growth, increasing gross
cash balance to £1.5m at 31 March 2026 (30 September 2025: £0.8m).
Commercial and operational review
The Group's revenues analysed by end use market were as follows:
£m H1 2026 (£m) H1 2025 (£m) % change H1 2026 % total H1 2025 % total
Energy 3.1 1.2 144% 64% 44%
Industrial 0.9 0.6 66% 19% 20%
Aerospace 0.8 1.0 (17%) 17% 36%
Total 4.8 2.8 +71% 100% 100%
The principal driver of revenue growth was additional orders secured in the
energy sector, particularly from the major new customer in North America.
Underlying production revenues increased by 25% in the first half,
demonstrating continued growth across the core business, excluding the
contribution from the new North American customer and prior period aerospace
development revenues.
The strong growth in the energy sector was driven by increased demand across
the customer portfolio, alongside the new orders from the major new customer.
Industrial revenues increased in absolute terms and remained broadly stable as
a proportion of Group revenues, with demand from major customers recovering
from softer demand in the earlier part of the prior year.
Aerospace revenues were lower, reflecting the non-repeat of significant
development revenues recognised in the prior period in relation to the cargo
door coating contract, alongside a later transition of this work into
production during the current financial year due to external delays.
Operations
Hardide's operational teams both in the UK and USA responded very well to the
increased activity arising from new business won in the period. Not only were
significant increases in output delivered, but efficiency improvements were
also realised, including improved reactor loadings and process gas usage.
Planning and design work has been completed to enable the infrastructure at
our Martinsville, USA plant to be upgraded, which will enable further
operational capacity to be added to support growing demand and maintain
efficiency gains. As previously announced, the project is expected to complete
later this year at a capital cost of £0.7m.
Technical and Engineering
The focus of work for the technical and engineering teams in the period was on
developing solutions demanded by customers and potential customers, including
thinner coatings for certain applications. In addition, support was given to
the operations teams to achieve improved reactor loadings. Work is ongoing to
seek to reduce cycle times and improve relative outputs from investments in
new capacity.
Operational Capacity
The upgrade to infrastructure at Martinsville, together with the improvements
we are making to operational efficiency, should enable us to increase our
operational capacity to around £20m of revenue per annum without significant
further investment. Capacity could be further increased by adding coating
reactors to our two operational sites. Each coating reactor has a capital cost
of circa £1.3m. We are working on and testing design improvements intended to
realise significant improvements in the output of future coating reactors,
with the aim of improving the ratio of annual revenue to capital cost for each
new reactor from 1-2 times to 3-4 times. This should enhance Hardide's
incremental returns on capital over time as the business grows.
Business development
Growth focus remains in two primary areas. Firstly coating as a service,
working with customers on existing and new applications in traditional
markets. Traction here remains very strong with the production launch of the
aerospace cargo door project with at least one additional Hardide coated part
number to be added to the project scope in the second half of the financial
year. Work with our North American energy sector customer has increased during
the first half with order cover extended as previously announced. One
additional part number has also been awarded to Hardide with initial
production volumes due to commence in the second half. The overall volume of
the new part number is significantly less than existing business but it
demonstrates growing confidence in our capabilities and strengthens our
platform of base business from which to further build. Testing of Hardide
continues with our Middle East customers, we anticipate a 3 - 6 months delay
based on recent global events but remain positive these opportunities will
mature into full production in the fullness of time. In the US, development
projects with two additional energy sector customers have matured into low
volume repeat production again further strengthening our base load. Finally,
we have secured our first development orders in our Additional Services value
stream for our electroless nickel plating offering.
The second area of focus is our solutions business, where we work with
customers to develop unique chemical vapour deposition ("CVD") coating
solutions for their engineering problems. In this sector we continue to deploy
our market pull digital marketing strategy. Over the past six months, we have
seen a significant increase in engagement through these activities with the
commercial and engineering teams working with customers on technical and
commercial qualification. We remain market agnostic, with new opportunities
being developed in Industrial and Semi-Conductor sectors with customer testing
and evaluation ongoing on a significant number of projects.
Financial review
Income statement
The Group's income statement for the period can be summarised as follows:
£m H1 2026 H1 2025 Change
Revenue 4.8 2.8 +2.0
Gross margin 3.1 1.5 +1.6
Gross margin % 65% 54% +11 ppts
Overheads (1.5) (1.1) (0.4)
EBITDA 1.6 0.4 +1.2
Depreciation (0.3) (0.4) +0.1
Operating Profit / (Loss) 1.3 - +1.3
Operating margin % 26.8% - +26.8 ppts
Financing costs (0.1) (0.1) -
Profit / (loss) before & after tax 1.2 (0.1) +1.3
Basic earnings / (loss) per share (p) 1.6 (0.1) +1.7
Return on capital invested (%)* 45.2% - +45.2 ppts
* Defined as annualised operating profit divided by average capital invested
for the period.
A commentary on the Group's financial results can be found in the Performance
Overview section above.
Due to cumulative prior years' tax losses amounting to some £15m, Hardide
does not expect to incur a corporation tax charge in the current financial
year.
Return on capital invested has now risen to a level well above the group's
estimated weighted average cost of capital, with improvements in profitability
far exceeding the growth in the capital base.
Cash flow
The Group's cash flow statement for the period is summarised below:
£m H1 2026 H1 2025 Change
EBITDA 1.6 0.4 1.2
Change in working capital (0.6) 0.1 (0.7)
Capital expenditure (0.1) (0.1) -
Debt & lease repayments (0.2) (0.1) (0.1)
Net cash flow 0.7 0.3 0.4
Net cash generated in the period was £0.7m enabling the group's cash balance
to increase from £0.8m at 30 September 2025 to £1.5m at 31 March 2026. This
compared with a net cash inflow in the first half of the prior financial year
of £0.3m.
The improved cash flow performance in the current period was driven by
significantly higher EBITDA, which was partly offset by investment in working
capital to support revenue growth.
Balance sheet
The evolution of the Group's balance sheet since the last financial year end
is summarised in the table below:
£m 31 March 2026 30 September 2025 Change
Property, plant & equipment 3.5 3.5 -
Right of use assets 1.3 1.4 (0.1)
Working capital 1.1 0.6 +0.5
Capital invested 5.9 5.5 +0.4
Cash 1.5 0.8 +0.7
Loans (0.4) (0.5) +0.1
Lease liabilities (1.8) (1.9) +0.1
Shareholders' funds 5.2 3.9 +1.3
The Group's capital invested and shareholders' funds increased as the group
generated both profit and cash and invested further in working capital to
support growth.
Financing
The interim financial statements have been prepared on a going concern basis,
with no material uncertainties to this assessment identified from the Board's
review of the Group's latest financial plans and sensitivity analyses. This
Group's strong trading performance, improving profitability and sustained cash
generation, alongside its modest working capital requirements, mean it is well
placed with existing resources to support its growth plans.
Proposed capital reduction, and capital allocation priorities
In the coming weeks, Hardide intends to formally announce its plans to seek
shareholder and Court approval for a proposed capital reduction, under which
approximately £20.9m of the Company's capital reserves would be converted
into revenue reserves. This will eliminate the current deficit in Hardide
plc's revenue reserves, caused by historical trading losses, and restore
distributable reserves at the parent company level.
The capital reduction will therefore provide the Board with future flexibility
to use distributable reserves as appropriate, for example to satisfy the
exercise of executive share options through market-based share purchases
without the need to issue new shares, thereby avoiding dilution of existing
shareholders for this purpose.
Notwithstanding the above, the Board currently expects that profit and cash
generated from trading will be used primarily to support the future growth of
the business, and the Directors do not intend to recommend the payment of
dividends for the time being.
Current Trading
Recent trading and order intake have continued to be strong, supported by the
additional £1.8m sales order received from our large energy sector customer,
for delivery during this financial year.
The Board continues to monitor events in the Middle East closely. As announced
in April, Hardide has experienced increases in the cost of tungsten gas, the
principal raw material used in its coating process, reflecting higher demand
from the defence sector alongside constraints in supply from China. As
previously disclosed, energy costs remain modest at approximately 3% of Group
revenues, with around 50% fixed through to the end of 2026.
Hardide has now secured supplies of tungsten gas at known costs, covering the
Group's anticipated needs for the remainder of the financial year. The total
additional input costs over the second half of the financial year are now
expected to be managed within the £0.7m previously estimated in April. This
is being mitigated through a combination of selling price surcharges and
internal operational efficiencies.
Outlook
The group continues to trade strongly and, supported by recent order intake
and actions taken to mitigate input cost pressures, the Board expects Hardide
to deliver full year performance in line with its recently upgraded
expectations.
Hardide also remains on track to deliver its initial strategic milestone of
doubling revenues, significantly faster than originally expected, from the
original base line level set in 2024.
Beyond that, the Board believes that Hardide is well positioned to drive
further significant profitable growth from the ongoing commercialisation of
its unique surface treatment technology.
Matt Hamblin
Chief Executive
21 May 2026
Income Statement
£ 000 Year to
6 months to 6 months to 30 September 2025
31 March 2026 31 March 2025 (audited)
(unaudited) (unaudited)
Revenue 2 4,789 2,801 6,030
Cost of Sales (1,667) (1,302) (2,574)
Gross profit 3,122 1,499 3,456
Administrative expenses (1,481) (1,109) (2,435)
EBITDA 1,641 390 1,021
Depreciation (358) (385) (761)
Operating profit 2 1,283 5 260
Finance income 4 3 6
Finance costs (61) (73) (141)
Profit / (loss) on ordinary activities before tax 1,226 (65) 125
Tax - - 53
Profit / (loss) on ordinary activities after tax 1,226 (65) 178
Basic earnings per share 3 1.6p (0.1)p 0.2p
Diluted earnings per share 3 1.5p (0.1)p 0.2p
Consolidated Statement of Changes in Equity
£ 000 Year to
6 months to 6 months to 30 September 2025
31 March 2026 31 March 2025 (audited)
(unaudited) (unaudited)
Total equity at start of period 3,879 3,659 3,659
Profit / (loss) for the period 1,226 (65) 178
Issue of new shares - 20 20
Share options 27 17 25
Exchange differences on translation of foreign operation 33 19 (3)
Total equity at end of period 5,165 3,650 3,879
Consolidated Statement of Financial Position
£ 000
31 March 2026 31 March 2025 30 September 2025
(unaudited) (unaudited) (audited)
Assets
Non-current assets
Property, plant & equipment 3,458 3,762 3,516
Right of Use Assets 1,285 1,422 1,369
Total non-current assets 4,743 5,184 4,885
Current assets
Inventories 298 186 173
Trade and other receivables 1,878 627 1,405
Other current financial assets 302 312 324
Cash and cash equivalents 1,493 992 827
Total current assets 3,971 2,117 2,729
Total assets 2 8,714 7,301 7,614
Liabilities
Current liabilities
Trade and other payables 1,237 959 1,235
Financial liabilities - loans 133 198 168
Financial liabilities - deferred income 16 17 15
Financial liabilities - leases 230 199 231
Total current liabilities 1,616 1,373 1,649
Net current assets 2,355 744 1,080
Non-current liabilities
Financial liabilities - loans 252 391 309
Financial liabilities - deferred income 27 43 34
Financial liabilities - leases 1,604 1,794 1,693
Provision for dilapidations 50 50 50
Total non-current liabilities 1,933 2,278 2,086
Total liabilities 2 3,549 3,651 3,735
Net assets 5,165 3,650 3,879
Equity attributable to equity holders of the parent
Share capital 3,153 3,153 3,153
Share premium 19,193 19,193 19,193
Capital reserve 1,707 1,707 1,707
Retained earnings (18,575) (20,079) (19,828)
Translation reserve (313) (324) (346)
Total equity 5,165 3,650 3,879
Consolidated Statement of Cash Flows
£ 000 Year to
6 months to 6 months to 30 September 2025
31 March 2026 31 March 2025 (audited)
(unaudited) (unaudited)
Cash flows from operating activities
Operating profit 1,283 5 260
Depreciation - owned assets 246 273 538
Depreciation - right of use assets 112 112 223
Share option charge 27 17 25
(Increase) / decrease in inventories (125) (19) (6)
Decrease / (increase) in receivables (516) 383 (355)
(Decrease) / increase in payables (50) (213) 63
Cash generated from operations 977 558 748
Finance income 4 3 6
Finance costs (61) (73) (141)
Tax received 65 49 50
Net cash generated from operating activities 985 537 663
Cash flows from investing activities
Purchase of intangibles, property, plant, equipment (146) (8) (69)
Net cash used in investing activities (146) (8) (69)
Cash flows from financing activities
Net proceeds from issue of ordinary share capital - - 20
Loans repaid (94) (141) (236)
Repayment of leases (114) (117) (233)
Net cash (used in) / generated from financing activities (208) (258) (449)
Effect of exchange rate fluctuations 35 21 (18)
Net increase in cash and cash equivalents 666 292 127
Cash and cash equivalents at the beginning of the period 827 700 700
Cash and cash equivalents at the end of the period 1,493 992 827
Notes
1. Basis of preparation of financial information
While the financial information included in these interim financial results
for the half year ended 31 March 2026 has been prepared in accordance with the
recognition and measurement principles of international accounting standards
in conformity with the requirements of Companies Act 2006, this announcement
does not contain sufficient information to comply with IFRSs.
These condensed consolidated financial statements should be read in
conjunction with the consolidated financial statements for the year ended 30
September 2025, which were prepared in accordance with UK adopted
international accounting standards and with the requirements of the Companies
Act 2006 as applicable to companies reporting under these standards.
The financial information set out above does not constitute the Company's
statutory accounts as defined by section 434 of the UK Companies Act 2006. A
copy of the statutory accounts for Hardide plc for the year ended 30 September
2025 has been delivered to the Registrar of Companies. The auditors have
reported on those accounts; their report was unqualified. Their reports for
the year ended 30 September 2025 did not contain statements under section 498
(2) or (3) of the Companies Act 2006.
The consolidated financial information presents the results of the Company and
its subsidiaries ("the Group") as if they formed a single entity. Intercompany
transactions and balances between Group companies are therefore eliminated in
full. Subsidiaries are fully consolidated from the date on which control is
transferred to the Group and cease to be consolidated from the date on which
control is transferred out of the Group.
2. Segmental information
Under IFRS8, operating segments are defined as a component of the entity (a)
that engages in business activities from which it may earn revenues and incur
expenses (b) whose operating results are regularly reviewed and (c) for which
discrete financial information is available. The Group management is organised
into UK and USA operation and Corporate central functions, and this factor
identifies the Group's reportable segments.
6 months ended UK operation £000 US operation Corporate Total
31 March 2026 £000 £000 £000
2,382 2,407 - 4,789
External revenue
Reportable segment operating profit / (loss) 693 1,303 (713) 1,283
Segment assets 5,075 2,766 873 8,714
Segment liabilities 2,137 1,215 197 3,549
6 months ended UK operation £000 US operation Corporate Total
31 March 2025 £000 £000 £000
2,801
2,313 488 -
External revenue
Reportable segment operating profit / (loss) 519 (40) (474) 5
Segment assets 5,588 1,549 164 7,301
Segment liabilities 2,292 1,165 194 3,651
12 months ended UK operation £000 US operation Corporate Total
30 September 2025 £000 £000 £000
4,581 1,449 - 6,030
External revenue
Reportable segment operating profit / (loss) 592 338 (670) 260
Segment assets 5,461 1,978 175 7,614
Segment liabilities 2,399 1,148 188 3,735
The Group currently has a single business product, so no secondary analysis is
presented. Revenue from external customers is attributed according to their
country of domicile. Turnover by geographical destination is as follows:
External sales UK Europe N America Rest of World Total
£000 £000 £000 £000 £000
6 months to 31 March 2026 1,142 385 2,635 627 4,789
6 months to 31 March 2025 1,019 712 455 615 2,801
12 months to 30 September 2025 2,309 1,048 1,681 992 6,030
3. Earnings per share
31 March 2026 31 March 2025 30 September 2025
£000
£000 £000
Profit / (loss) on ordinary activities after tax 1,226 (65) 178
Earnings per ordinary share:
Weighted average number of ordinary shares in issue 78,812,749 78,642,936 78,737,808
Dilutive effect of potential ordinary shares 7,145,410 - 4,950,362
Basic earnings per share 1.6p (0.1)p 0.2p
Fully diluted earnings per share 1.5p (0.1)p 0.2p
As net losses were recorded in the equivalent prior period, the potentially
dilutive share options are anti-dilutive for the purposes of the loss per
share calculation and their effect is therefore not considered.
4. Going concern
The interim financial statements have been prepared on a going concern basis
after assessing the principal risks and considering the impact of various
downside scenarios to the Group's base case financial plans, including latest
sales expectations and profit forecasts. The Board continues to monitor energy
costs and broader cost pressures and is mindful of the wider macroeconomic
backdrop.
5. Debt maturity
Loans
31 March 31 March 30 September 2025
2026 2025
£000
£000
£000
Total loans 385 589 477
Maturity analysis:
Within 1 year 133 198 168
1 to 2 years 85 134 103
2 to 3 years 80 87 85
3 to 4 years 38 82 54
4 to 5 years 41 39 39
5+ years 8 49 28
Right of use lease liabilities
31 March 31 March 30 September 2025
2026 2025
£000
£000
£000
Total lease liabilities 1,834 1,993 1,924
Maturity analysis:
Within 1 year 230 199 231
1 to 2 years 204 196 207
2 to 3 years 218 201 205
3 to 4 years 227 213 218
4 to 5 years 237 226 229
5+ years 718 958 834
6. Risk Review
The Board believes that the review of business risks set out on pages 18 to 22
of Hardide's 2025 Annual Report remains relevant to the second half of the
current financial year, except that supply chain risks, including volatility
of input costs, have now become relatively more significant as described in
the section above on second half trading.
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