Hardide deliver a second year of record sales

Hardide (LON:HDD), the developer and provider of advanced surface coating technology, has announced its preliminary results for the year ended 30 September 2019.

Commenting on the results, Robert Goddard, Chairman of Hardide, said: “Overall, this is a strong set of results. We are pleased to announce that Hardide has delivered a second year of record sales with a 10% increase to £5.1m. Sales grew across all sectors and an 18% rise in demand from North America means the region now accounts for 65% of Group sales. We are very pleased that the Martinsville facility (excluding overhead marketing costs) has achieved a positive EBITDA for the year for the first time since opening. Demand continues to be particularly buoyant in North America from the flow control, and oil and gas sectors. Of particular note is the selection of the Hardide-A coating by Airbus for a number of components on a range of aircraft.

“We are looking forward to the relocation of the UK business to the new site in 2020 and the increase in capacity and new opportunities that it will bring. We have made a very positive start to the new financial year and the Board is confident of continued growth.This is a strategic priority and we are prepared to invest in additional R&D and marketing to achieve this and to position the company strongly for the future.”

Highlights

Financial

· Record revenues, up 10% to £5.1m (FY2018: £4.6m)

· Gross profit of £2.4m (FY2018: £2.4m) reflecting shifting sales mix / customer diversification

· Gross margin of 48% (FY2018: 52%); gross margin of 51% in H2

· EBITDA loss before exceptional items of £0.6m, including £0.1m costs relating to moving site (FY2018: loss before exceptional items of £0.3m)

Trading

· Broadening of customer and sector bases continuing

· Over half of the sales were from customers gained in the last four years

· Sales to oil and gas sector down 9% overall but H2 considerably stronger at 22% up on H1

· 87% increase in sales to the flow control sector

· 40% increase in sales to the precision engineering sector

· 14-fold increase in sales of coated industrial diamonds

· Revenue from North American customers increased to 65% of total Group sales – Martinsville facility delivered maiden positive EBITDA contribution (excluding overhead marketing costs)

Strategic

· Hardide-A coating selected as the replacement for hard chrome plating on various Airbus aircraft components

· Three additional coating reactors currently on order – two for the UK (including larger capacity reactor) and one for the US

· On track for the relocation of the UK operation to a new facility by September 2020 – decision taken to increase investment in “future proof” equipment

Technology

· Innovate UK grant-funded project completed resulting in the launch of two new low-temperature Hardide coating variants

· Awarded grant funding towards two National Aerospace Technology Exploitation Programme (NATEP) projects

Post-period

· New patent granted by the UK Intellectual Property Office covering a water droplet erosion resistant coating for turbine blades and other components

· Hardide-A coating selected for use on components for the new Lockheed Martin F-35 Lightning II Joint Strike Fighter

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