Haydale (LON:HAYD), the global advanced materials group, announced this morning the following update on trading for the full year ended 30 June 2017 and on the prospects for the Group.
Trading update
The Board has said that total income for the financial year ended 30 June 2017 is expected to be in line with current market expectations, which represents a doubling when compared with the prior financial year. The Board’s decision to increase investment in a number of key areas during the year will result in the Group reporting a marginally higher loss before tax for the full year than originally expected, although the final reported LBT is expected to reduce due to the inclusion of negative goodwill associated with Haydale’s acquisition of Advanced Composite Materials Inc. in November 2016.
The areas to have benefited from higher investment during the year include the set-up, fit out and recruitment of quality technical and sales staff at Haydale Technologies (Thailand) (‘HTT’) in Thailand plus the recruitment of executive management at the Group’s USA operation. Haydale continues to invest in mixing, dispersion and processing methods for thermoset and thermoplastic resins and polymers.
Cash as at 30 June 2017 stood at approximately GBP2.0 million (31 December 2016: GBP1.1 million). At the year end, the Group’s order book, being product sales orders and consulting contracts to be fulfilled over the next 3.5 years, stood at approximately GBP5.4 million, which is at record levels for Haydale and provides good visibility on the Group’s future income.
Strategic Business Units
To streamline the business and to ensure that the Group is best positioned to realise its potential as a commercial entity having evolved from being R&D focused, the Group’s operations have been restructured into two Strategic Business Units (‘SBU’). The first unit focuses on Resins, Polymers, and Composites which will concentrate on marketing and selling the newly developed graphene infused carbon fibre pre-impregnated materials (‘pre-preg’). The second unit, Advanced Materials, principally hosts the Group’s silicon carbide (‘SiC’) products and the newly developed graphene inks and pastes for the self-monitoring blood glucose device market. Each SBU has its own managing director with full profit and loss responsibility and a principal focus on driving product delivery and sales. Supporting each managing director will be dedicated sales teams with technical support.
Silicon Carbide
Since Haydale Technologies Inc. (‘HTI’) acquired ACM in November last year, the Board has been delighted with the progress the Group has made in growing the SiC opportunity. As announced in March 2017, HTI signed an agreement to supply SiC micro-fibre to a new global tooling manufacturer with a potential sales value of over US$2.6 million over its initial four-year term. In addition, other new sales opportunities for SiC micro-fibre include the cook and homeware markets in the Far East, where we are in final trials with a major cookware supplier for improved scratch resistant coatings incorporating Haydale’s functionalised graphene and SiC which are showing encouraging results. Due to the increased demand for HTI’s SiC micro-fibre, HTI commenced a production run at its facility in Greer, South Carolina, in late May 2017 to replenish its inventory.
Huntsman Corporation Agreement update
As previously reported in December 2016 and February 2017, the customer sampling process with Huntsman Corporation (‘Huntsman’) for graphene infused Araldite(R) epoxy resin has taken longer than either party originally anticipated. Haydale’s investment into research for this exclusive collaboration continues and the Board is encouraged by its progress which, in addition to improving the Group’s industry and product know-how, enables Haydale to target new customers already using Huntsman’s epoxy resins while Huntsman continues its evaluations.
Everpower
Following the investment in Haydale by Everpower earlier this year, both parties have met and agreed that Haydale’s products will be supplied to China for testing and sale. These include the full range of the Group’s SiC products and functional inks and pastes from Thailand and Taiwan. Data sheets, training and promotional literature has been supplied to Everpower. Additionally, a number of large projects for strategically focused products in the automotive and wind energy sectors are now under evaluation with Everpower for next stage contractual discussions.
Post Period End
As announced on 13 July 2017, the Board is delighted to welcome David Banks as our Non-Executive Chairman. In addition to David’s appointment, the Group is also pleased to announce the appointment of Keith Broadbent as Managing Director of the Resins, Polymers and Composites SBU. Keith joined Haydale on 17 July 2017 with a track record of implementing increased efficiency and significant bottom line improvement in manufacturing and field installation environments. Keith’s experience includes having worked as operations director at Princess Yachts International and at Sunseeker where he was part of the senior management team.
To further strengthen our management team Roger Smith, a current Haydale non-executive director, has agreed to take on a part-time executive role assisting with the implementation of Haydale’s strategy and supporting business development within each of the Group’s SBUs.
