Hardide plc (LON:HDD), the developer and provider of advanced surface coating technology, has provided an update on trading for the financial year ending 30 September 2020.
The Group expects (subject to audit and year-end adjustments) to report revenues of £4.7 million and an EBITDA loss of c.£0.5 million. This is in line with the Trading Update issued on 16 July 2020. Cash at bank is expected to be c.£2.7 million and there are capital commitments of c.£0.5 million remaining to fully complete the investment in the UK site relocation.
Production has continued uninterrupted at both the UK and US sites throughout the COVID-19 pandemic, with significant emphasis being placed on health and safety measures to protect staff and contractors.
The relocation of the business to the new site at Longlands Road, Bicester is now complete, on schedule and at projected cost. After delays due to travel restrictions, the large reactor has now been installed and commissioned, which completes the installation of all new equipment at the facility. This reactor, together with the new large pre-treatment line, increases considerably the size range of components that can be coated. One Airbus-approved reactor is still operational at the Wedgwood Road site and this will remain in place until the Longlands Road site is fully approved by Airbus. In addition to the developments in the UK, a fourth reactor has been installed at the Martinsville, Virginia facility making a total of nine reactors in the Group.
The extensive process of Airbus’ qualification for the new site is progressing well and on schedule to be completed in early 2021. Orders are now starting to be received for the Airbus components that have been approved previously and shortly further parts are due to be approved by Airbus.
The Group previously reported the impact on its current year revenue from a delay in receiving a major oil and gas project order caused by the COVID-19 pandemic. Hardide is pleased to report that this order has now been received and will give a positive start to the first quarter of the new financial year. Generally, there has been a reduction in demand from oil and gas customers in this current second half as the global economy has slowed. However, it is pleasing that demand from customers in flow control and precision engineering has not been significantly affected.
Multiple test programmes for new applications are progressing strongly with customers in various sectors and therefore present encouraging prospects for new business in the 2020-21 financial year. Looking beyond the disruption of the present COVID-19 pandemic, the Board of Hardide believes there are strong grounds for expecting a return to increasing demand and remain positive about the longer-term growth of the Company.
The Group expects to report its preliminary results for the year to 30 September 2020 on or around 7 December 2020.