Hardide PLC (LON:HDD), the developer and provider of advanced surface coating technology, today announced its results for the six-month period ended 31 March 2020.
Highlights
Financial
· Record revenue for a half-year – up by 29% to £3.02m (H1 2019: £2.35m)
· Gross profit of £1.66m – up by 58% (H1 2019: £1.05m)
· Increased gross margin of 55% (H1 2019: 45%) as a result of a stronger product mix
· EBITDA of £0.03m* (after IFRS 16 and relocation costs the like-for-like H1 2019 would have been a loss of £0.37m)
· Over-subscribed fundraising of £2.50m (before expenses) to fund additional equipment, enhance new UK site and strengthen the balance sheet
· Cash at bank at 31 March 2020 of £4.88m (£5.35m at 31 March 2019)
· Sole material borrowing is the maiden asset finance agreement with Hitachi Capital over £0.40m against a new coating reactor
* Application of IFRS 16 has led to operating lease charges previously recognised within operating profit to now be partially recognised in interest costs, leading to an increase in EBITDA of approximately £0.14m. For reference, before IFRS 16 adjustments, EBITDA would have been a loss of £0.11m in H1 2020, compared with a loss of £0.44m in H1 2019.
Operational
· Relocation to the new UK site is on track for completion by end-September 2020; aerospace work will continue to be processed at the Wedgwood Road site until the new facility is fully approved by Airbus
· Encouraging progress continues to be made with Airbus and a supply agreement has been reached with one of their major Tier 1 suppliers
· Two projects grant-funded by the National Aerospace Technology Exploitation Programme (NATEP) were completed successfully
· International filing of UK patent for turbine blades has commenced
Post-period
· First production order received for Airbus A380 wing compression pads
· Honoured with a Queen’s Award for Enterprise in recognition of the outstanding growth in international sales
· No significant reduction in demand seen so far as a result of COVID-19. Encouraging dialogue is being maintained with customers regarding projected demand
· Both UK and US sites continue to coat product as normal and are following government safety directives
· Discretionary spending is under regular review and actions are being taken to maximise future cash balances
· New Finance Director, Simon Hallam, appointed on 20 April 2020
Commenting on the interim results, Robert Goddard, Chairman of Hardide plc, said:
“The Group is pleased to report another record for sales revenue for a half year. The phased relocation of our UK business to a larger, modern and high-spec facility is on time and budget. Meanwhile, our UK and US sites are operating effectively and continue to coat product during the COVID-19 pandemic.
“So far, trading in H2 2020 has started well and has not, to date, been significantly disrupted by the effects of COVID-19. There are grounds for cautious optimism, but in the current context, the Board must be mindful of the potential for order book disruption in the second half. The Group has a robust cash position and measures are being put in place to preserve cash, which positions us well in these uncertain times.
“The safety and well-being of our staff remain the Group’s main priority. The Board continues to observe and implement government safety directives that apply to its businesses in the UK and the US. These are unprecedented times and the Board wishes to thank our employees for their commitment, flexibility and resolve during this challenging period.”
