Hardide revenue c.50% higher than last year with a strong pipeline for H2

Hardide plc (LON: HDD), the developer and provider of advanced surface coating technology, announces its results for the six-month period ended 31 March 2022.



·         Revenue of £2.7m, c.50% higher than same period last year (H1 2021: £1.8m) with a strong pipeline for H2
·         Gross profit of £1.1m (H1 2021: £0.7m)
·         Gross margin of 41% (H1 2021: 37%)
·         EBITDA loss of £0.2m, including a £0.2m US Employee Retention Credit (H1 2021 loss: £0.9m)
·         Gross cash at 31 March 2022 of £0.9m (30 September 2021: £1.5m). Asset finance and Government backed CBILS loans of £1.2m (30 September 2021: £0.9m)


·         Two major orders received from Ansaldo Energia S.p.A (“Ansaldo”) for coating compressor blades for power generation gas turbines with further orders expected in H2 and on an ongoing basis
·         Growing demand from the oil and gas sector as global consumption and production increases
·         Regular orders commenced for coating Airbus A320 wing components, with orders for Airbus A330 and A380 components to start in H2
·         Leonardo Helicopters finalising approval documentation with orders expected in H2
·         Continued development trials with the US-based manufacturer of EVs 

Post period

·         US Employee Retention Credit cash received of $233k (c. £177k)
·         Orders for Airbus A330 and A380 components now received

Commenting on the interim results, Robert Goddard, Chairman of Hardide plc, said:

“I am very pleased to report on a very positive first half with improvement across our key markets. Revenue increased by approximately 50% in the first half compared with both H1 and H2 2021, especially from energy, industrial and power generation customers.

“The Board is extremely pleased with the first, and recently received second order, for coating compressor blades for Ansaldo’s gas turbines and looks forward to a long-term relationship with the customer. Regular orders started to materialise in H1 for the Airbus A320 series aircraft and orders for Airbus A330 and A380 components have been received in H2. In the alternative energy sector, we also have a number of developments underway.

“Looking ahead, the Board has increased confidence in the Group’s revenue prospects for H2 and into the next financial year underpinned by a very healthy pipeline of identified customer projects. We continue to monitor our working capital resources carefully but have line of sight to profitability and cash generation.

“With the Company now being on this firmer footing for the future, I have the confidence to step aside as Chairman, as announced separately today.”



Market conditions and the number of new applications have improved considerably across all sectors, resulting in H1 revenues being approximately 50% higher than in each of H1 2021 and H2 2021.

This improving trend is expected to continue in H2 2022, with a continued recovery anticipated across our markets together with further orders from Ansaldo. We now have visibility of work that could, subject to typical commercial concerns and the timing of delivery, take our performance to the top of or beyond previous market expectations for the financial year. It is pleasing, given the conditions in our target markets over recent years, that our capacity to deliver further growth from the processing of large components is now subject to addressing our own capacity constraints.

The improvements in the Group’s operating environment are pleasing together with improving market conditions. Looking forward, these show a clear trajectory towards profitability and cash generation.  In the meanwhile, the Board continue to monitor the Group’s working capital resources very closely and is mindful that the Group’s cash resources are below the level that the Board has historically stated that it would like to maintain as a strategic buffer. The recovery across the Group’s target markets has not been even, and certain higher-margin sectors (particularly energy), whilst improving, remain behind previous expectations. This is compounded by the Group’s upfront product development and raw material working capital requirements, inflationary pressures on input costs and investment requirements across the business to support continued growth.  

Financial Results  

The Group is reporting first half revenue of £2.7m, an increase of c. 50% compared with the same period last year (H1 2021: £1.8m) for reasons further explained below. Gross profit of £1.1m (H1 2021: £0.7m) increased in line with higher revenue, with margins improved at 41% (H1 2021: 37%). The Group is focused on sustaining and improving margins for the full financial year, but is experiencing already the impact of increasing costs of energy, process gas and other chemicals.

Overheads of £1.3m (H1 2021: £1.5m) are also being well-controlled leading to a considerably reduced EBITDA loss of £0.2m (H1 2021: £0.9m loss).

The gross cash balance at 31 March 2022 was £0.9m (30 September 2021: £1.5m), with total asset finance and CBILS loans of £1.2m (30 September 2021: £0.9m). Gross cash balance has risen to £1.1m as at 30 April 2022 following the receipt of a $0.23m (£0.17m) cash refund in respect of the US Employee Retention Credit scheme and £0.15m of a £0.25m debt overdue at the period end. The balance is due to be received in May.

In January 2022, the US business secured $0.44m (£0.33m) of asset financing on very attractive terms against one of its coating reactors. The Group will continue to explore other financing opportunities for supporting the Group’s requirements for capital investment and working capital.

Operational Overview

In H1 2022, market segmentation of revenue was:

Energy (including oil & gas and power generation): 54%
Industrial: 43%
Aerospace: 3%

Compared with the same period last year, Energy sales increased by 49% (oil & gas by 26%) and Industrial sales by 62%. Aerospace sales showed a slight decrease due to the phasing of orders.


As the world recovers from the COVID-19 pandemic, global demand for energy is rising. The disruption of supplies of oil & gas from Russia, as a result of western sanctions following the invasion of Ukraine, is adding to the increase in oil and gas production globally. This is evident by demand increasing from our oil & gas customers as well as new, potentially high-volume applications currently under test in this sector.

The most significant development in the period was the first order from Ansaldo in Italy for the coating of sets of compressor blades for one of their new, high efficiency advanced gas turbines used in electricity generation. These turbines cut CO2 emissions and operational costs. The size of some of these blades is such that it would not have been possible to take on this business without the new large coating reactor and pre-treatment line which were installed when the Company relocated to its new site in 2020. A second order for a further set of blades was received in March 2022 for coating and delivery during H2. Further orders for blade sets are projected to be received throughout 2022 and beyond. Testing and development work continues with three other companies in this sector.

Capacity utilisation of the large coating reactor will be high as a result of these orders. Future demand of these and of other developments currently underway for large components will be monitored closely to ensure coating capacity is available to take on additional business in the future. The Board is mindful that additional large reactor capacity would be required to facilitate further developments and to continue to deliver further revenue growth.

Revenue from a European solar energy customer is expected to grow during H2 and into 2023 as they embark on an expansion of their production capacity to cope with increasing demand for silicon wafers used in solar cells.

The Group continues to advance its strategy to develop new applications in alternative energy. Development trials are still underway with the US-based manufacturer of EVs for the use of the Hardide-T coating on components used in the manufacture of lithium-ion (Li-ion) rechargeable batteries. In addition to progressing developments in the solar and EV sectors, we started the early stage testing of the coating in three hydrogen production applications. Hardide coatings, due to their non-porous structure, are believed to be an excellent barrier preventing hydrogen under high pressure from penetrating the underlying metal substrate, as hydrogen permeating into metals can cause severe embrittlement and component failure. Tests are underway with a major European company in the hydrogen production and distribution sector, as well as other projects ongoing with an innovative US cleantech company working on technology to decarbonise natural gas and a leading UK university investigating hydrogen production by electrolysis.


Demand from our major North American industrial pump customer was more than double that seen in H1 2021 and 25% higher than in H2 2021, with high levels of orders continuing into H2. Sales to the airport security scanner manufacturer dipped during the pandemic as their customers cut back on expenditure. This demand is now starting to return to previous levels.


Regular orders from a European Tier 1 supplier to Airbus are now being received to coat wing components for the Airbus A320 range. Orders from a UK-based Tier 1 for the coating of wing components for the Airbus A330 have started in H2 2022, as have orders for parts for the Airbus A380 as maintenance activity on the fleet increases and the existing hard chromed plated parts are replaced by Hardide-coated ones. Production levels for the A320 and A330 are increasing as airline activity resumes its previous growth.

Despite Airbus and their European Tier 1 supplier having still not finalised their own contractual arrangements, this is not preventing orders being placed by them. This agreement will cover only certain components for Airbus. Orders from other Tier 1 suppliers are subject to separate arrangements and are currently being received.

As mentioned previously, Leonardo Helicopters successfully completed their testing of Hardide-coated components as part of a modified gearbox transmission system. Currently, they are in the process of finalising the approval documentation so that production orders can commence.

Summary and Outlook

The Board is much encouraged by the improving demand from our traditional markets and the first, and recently received second order, for coating compressor blades for Ansaldo’s power generation gas turbines. The Company looks forward to a long-term relationship with this first customer in a new sector for Hardide in which we see considerable commercial opportunities. Regular orders have started to materialise for the Airbus A320 series of aircraft with further orders for Airbus A330 and A380 parts already received in H2. A number of developments are also underway in the Alternative Energy sector.

The Board believes that the Group’s progress in diversifying the customer base, product differentiation, increased awareness and strong customer relationships, position it well for medium- and long-term growth.

Looking ahead, the Board remains confident that the growth in revenue will continue in H2 2022 and is set to improve yet further as we go into 2023.

Robert Goddard


10 May 2022

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