Hardide Plc (LON:HDD) Chief Executive Officer Phil Kirkham caught up with DirectorsTalk for an exclusive interview to discuss their final results for the year ended 30th September 2017.
Q1: Now, this morning we saw your results published, can you talk us through the highlights?
A1: Certainly. I think it shows real solid growth within the business, it’s a record revenue year of £3.24 million which is 51% higher than the last financial year and it shows really a good trajectory. Our second half, H2, was 14% increase in sales on the first half of the year and if you look at the last 4 half-years, we’ve shown steady growth, half-on-half in both sales and gross profit. During the year, we’ve benefited from a recovery in the oil and gas markets, our oil and gas sales in this year were 92% higher than the previous year.
So, overall, it’s a really good trajectory, really solid growth, really good figures and we’re very well positioned for the future.
Q2: You recently had an over-subscribed fundraising of £2.54 million, can you tell us how the money is being used?
A2: We’ve got a projected expansion of our business in the year to date which indicates that we’ll need more capacity in 2018, North America already accounts for about half of the total group sales. So, we have actually ordered 1 new coating reactor for the Martinsville, Virginia facility which takes the number of coating reactors from 2 to 3 and that’s due to be commissioned in August 2018. We’ve also got, or we will have, the money in the bank to fund an additional reactor, over and above the one we’ve just ordered, when the time is right, when we see the increase in demand which we expect to be in 2019.
In addition to that, we also want to get the US facility up to aerospace standards and get the AS9100 approval for the site, similar to what we have in the UK so that’s one of the main areas we’re spending the money on. In addition to that, we’ve got a number of process improvements in the UK and the US that we want to put into place as well as some more significant laboratory equipment.
Of course, having a strong balance sheet, having cash on the balance sheet, is very important for our customers to see.
We need to just mention that part of the fundraising has not yet been received because it’s subject to further EIS/VCT clearance from the HMRC, which we are currently waiting for, which will bring in another £800,000 to make the £2.5 million in total once that’s all received.
Q3: Hardide reported its gained full Airbus Approved Supplier status and achieved Nadcap accreditation, how will this add to Hardide’s operation?
A3: We’re always very pleased to have gained the significant accreditations and approvals this year, both the Airbus Approved Supplier status and the Nadcap accreditation, both for the Bicester site, these have really put a really good platform for securing future aerospace business.
Of course, at the moment, we’re still in discussions with Airbus and others, there’s tests going on, live testing on wing components for the Airbus A320, A330 and the A380 family of aircraft and also on landing gear parts as well as other fixed and rotary wing aircraft components.
Unfortunately, progress is slow due to the nature of the business, the aerospace industry, but also the critical nature of the components that we’re being asked to coat.
So, that in addition to getting on the plan to bring the US facility up to the aerospace standard during 2018 is really where we’re going forward.
Q4: Going forward then, what are the main focus areas, let’s say over the next few months?
A4: Well, we’re continuing to work on our aerospace business with Airbus, Leonardo and many other primes and tier 1 subcontractors to the industry and getting this US site to AS9100 approval.
We’ve also recently signed supply agreements with some major oil and gas customers which we believe will become significant business for us in the forthcoming months and years.
Q5: How is trading going and what’s the outlook for the next financial year for Hardide?
A5: We’re building on the achievements that we’ve achieved in 2017 and we plan to grow the business further and plan to diversify both in North America and in Europe. We see a very positive future during 2018 and beyond.
