On 27 October, Hardide Plc (LON:HDD) announced an oversubscribed fundraising of £2.54m, in two tranches, at 1.7p per share to fund additional capacity in anticipation of future demand, creating a solid platform for growth. The group also provided a trading update within the announcement highlighting that FY 2018E has started positively, with Hardide signing a framework supply agreement with a major international O&G (Oil & Gas) operator and is in the process of finalising a second with a different O&G customer, suggesting a positive outlook ahead. We make changes to estimates to reflect the placing, the anticipated increase in capex and more positive margin assumptions. The result is an increase to Adj EBITDA in FY2019E and FY 2020E together with higher cash balances.
- The oversubscribed £2.54m fundraising, £1.7m initially and a further £0.8m subject to receipt of EIS and VCT eligibility from HMRC, comprises a placing and a subscription by certain Directors. Proceeds will be primarily used to fund further coating reactor capacity in the US, to upgrade one coating reactor in the UK and the US facility to an aerospace standard and will strengthen the balance sheet creating a solid platform for future growth.
- Hardide’s current management has a positive history of anticipating and managing the need for greater capacity to support future growth and enable further development work. Since its previous placing in September 2016, Hardide’s share price has increased by 135%
