Hardide plc (LON:HDD) Chief Executive Officer Philip Kirkham caught up with DirectorsTalk for an exclusive interview to discuss a robust set of results, strong pipeline, a more diverse customer base, current capacity and what investors can expect over the coming months.
Q1: Congratulations on a robust set of interim results. Hardide has come back strongly from the pandemic with revenue 50% higher than H1 last year, can you talk us through the Group’s first half performance?
A1: We’re very pleased to have announced a very strong set of results for the first half, we’re seeing our revenue increasing as the industry recovers from the pandemic.
Our oil and gas revenues were up by 26% during the period and overall energy revenues was up by 49%, and that includes the power generation sector sales for the turbine blades we announced previously. Our industrial sector sales was up by 62% with strong growth from our North American pump customer.
There were two significant events in this first half of this year, firstly we received the first order to coat a set of turbine blades for an Ansaldo gas turbine engine and in the last few weeks, we received a second order for a second set of these blades with further orders expected later in 2022. Secondly, also in the first half, we started to get orders for coating the Airbus A320 components which has long been awaited and earlier in the second half of the year, after the period-end, we started to get orders for the A330 and A380 aircraft components as well.
So, two very significant events in the first half.
Q2: You refer to a strong pipeline for H2, can you elaborate on that for us?
A2: As I’ve just said the Airbus work has only just started so that’ll grow in the second half of the year and also, we expect further orders for the coating of the Ansaldo turbine blades.
We’re also seeing now significant increase in activity from the oil and gas markets with some new very interesting high volume applications which are currently in development and testing, within oil and gas but also in electric vehicle battery production.
In addition, our solar cell customer in Europe, they’re expanding their production facility due to increased demand so we will see a greater demand for coating components for them over the next period as well.
Also, we’ve got some early-stage developments in the hydrogen energy sector, nuclear fusion applications and also a very interesting one in the decarbonisation of natural gas.
So, we’ve got a lot of activity happening in the second half of this year.
Q3: The Group is having success in achieving a more diverse customer base, what further progress do you plan to make in this area?
A3: I think I’ve answered some of that by the previous comments that the power generation sector will expand, not just with Ansaldo but with other customers in that sector as well. In alternative energy, we see that as a priority and we’ve got some really good expectations there. Of course, aerospace, primarily with Airbus but also with others will be starting to grow now sand expand that diversification of the customer base. Our dependency on oil and gas customers has decreased and will decrease further over the years to come as we expand into other areas.
Q4: You mentioned the orders for Ansaldo, it seems to be taking up capacity in your large reactor. How do you intend to address this?
A4: Yes, it certainly is, it is taking up a large amount of capacity and the blades that we’re doing will only fit into the large coating reactor and we only have one of those which we installed in the new site in 2020 when we moved over here.
We’re currently looking at the projections for large components over the next two years and to decide if we need to put another large reactor in. There is a 12-month lead time in ordering and getting a new reactor installed and working so we have to looking at two years ahead of where we think we’re going to be in two years to actually make the decision.
Q5: What can investors expect from Hardide in the rest of the year?
A5: I think very simply, continued growth in revenue, a number of new applications coming on stream and IO think, importantly a very strong trajectory now towards achieving profitability in the business.