Hardide PLC Trading Update (1377T)
July 16 2020 - 2:05AM
UK Regulatory
TIDMHDD
RNS Number : 1377T
Hardide PLC
16 July 2020
16 July 2020
Hardide plc
("Hardide" or "the Group" or "the Company")
Trading Update
Hardide plc (AIM: HDD), the developer and provider of advanced
surface coating technology, provides the following update on
trading for the year ending 30 September 2020.
Previously, the Company announced record revenues for its first
half to 31 March 2020 and minimal disruption to the Company's sales
pipeline and order book in the first few months of the COVID-19
lockdown. More recently, the Company has started to see the risk,
as indicated, of a slowing in the previously-robust customer
demand, and order book delays come through. This lower level of
demand is expected to remain throughout the rest of this financial
year, and it is reasonable to expect this trend to continue into
the beginning of the next financial year. The Company expects to
report revenue for the current financial year of not less than
GBP4.7 million. The Company has, as previously indicated, taken
prudent measures to manage its cost base so that adjusted EBITDA
loss is expected to be in the region of GBP0.5 million (on an IFRS
16 basis).
The Company's order book has been particularly impacted by the
delay to a large order from a major oil well operator who, due to
international travel restrictions, has rescheduled the development
of a major project to 2021 and therefore their planned order from
Hardide. This has been compounded by a marked slowing in orders
from the Company's customers elsewhere in the oil and gas sector
together with other similar, albeit smaller, order delays.
Despite the recent delay in customer demand, it has been very
encouraging to see the high number of new oil and gas applications
that are in current evaluation and test programmes. This is
indicative of new business potential in the coming months.
The work with Airbus and their Tier 1 supply chain continues to
progress well, with further orders received for A380 components.
Meanwhile, additional components for Airbus have been approved for
production and further parts are currently in their testing phase.
Work on components for the higher volume A330 and A320 aircraft is
rapidly nearing a conclusion, with Airbus finalising drawings
specifying Hardide's coating on these parts before their issue to
the supply chain. Regular orders are also being received for the
Lockheed Martin F35 Joint Strike Fighter components.
The Group's facilities in Bicester and Martinsville have
continued to operate as normal throughout the pandemic. The move to
the new premises in Bicester is on schedule and on budget, with
three reactors and all other processing equipment now fully
operational. The aerospace-approved reactor is now the only one
left in operation at Wedgwood Road. Commissioning of the new large
reactor will take place once the manufacturer's engineers are able
to travel from Europe, which we hope will be in the coming months.
Airbus' approval of the new reactors and the new site's processes
is expected to be complete by early 2021, as planned.
Management has taken actions to preserve cash and core
capability in the business, without undermining strategic and
operational progress. Because of the Board's strategy to maintain a
substantial cash buffer to cover an unexpected downturn in market
conditions, the Company has sufficient cash reserves for the medium
to long term based on the current sales projections. As at 30 June
2020, the Company had GBP3.4m of cash and cash equivalents out of
which there are future capital commitments of approximately GBP0.7m
associated with the relocation and capital investment projects.
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014.
Enquiries:
Hardide plc Tel: +44 (0) 1869
Robert Goddard, Non-Executive Chairman 353830
Philip Kirkham, CEO
Jackie Robinson, Communications Manager
IFC Advisory Tel: +44 (0) 20 3934
Graham Herring / Tim Metcalfe / Florence 6630
Chandler
finnCap - Nominated Adviser and Joint Broker Tel: +44 (0) 20 7220
Henrik Persson / Matthew Radley (corporate 0500
finance) Tel: +44 (0) 20 3328
Richard Chambers (ECM) 5656
Allenby Capital- Joint Broker
Jeremy Porter / Tony Quirke
Notes to editors:
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 oil and gas exploration and
production, valve and pump manufacturing, precision engineering and
aerospace industries.
www.hardide.com
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END
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