TIDMHAYD
RNS Number : 4096B
Haydale Graphene Industries PLC
30 January 2020
For immediate release 30th January 2020
Haydale Graphene Industries plc
('Haydale' or the 'Group')
Trading update and Notice of results
Haydale (AIM: HAYD), the global advanced materials group,
announces the following update on trading for the six months ended
31 December 2019 ("H1-2020") as well as the prospects of the Group
for the remainder of the current financial year ending 30 June 2020
("FY-2020"). The Board also announces the anticipated date of
announcement of the Company's unaudited interim results for H1-2020
will be 27 February 2020.
Key Highlights
During H1-2020 the Company has:
-- launched a graphene-enhanced prepreg material for
lightning-strike protection, utilising functionalised nanomaterials
to improve electrical conductivity. The material was developed in
collaboration with Airbus UK, BAE Systems, GE Aviation and Element
Materials Technology Warwick Ltd, within the NATEP-supported
GraCELs 2 project;
-- resolved teething issues to commission US blanks line;
sufficient early strong demand supports a 7 day double shift
pattern from early 2020;
-- taken the decision to close its Taiwan facility and relocate
manufacturing and R&D capacities within the Group;
-- raised a further GBP450,000 via a subscription from two of our larger shareholders;
-- reduced operating costs by circa GBP900,000/22% over the
comparable six months to December 2019.
Asia Pacific Region
As previously announced, the Board has been reviewing the
Group's footprint in the APAC region, and has now decided to close
the Group's loss-making manufacturing facility in Taiwan and move
capacity to its APAC Knowledge Centre in Bangkok, Thailand and
Ammanford, UK.
The relocation of the Group's Taiwan operations will lead to a
revenue shortfall of approximately GBP410,000 for H2-2020 but will
have a positive effect on Group EBITDA and reduce the Group's cash
burn through H2-2020 and into FY-2021.
US Operation
The Group's US business unit, HCT, experienced a softer start to
the financial year than anticipated. Sales of SiC whiskers and
blends in H1-2020 were disappointing. The business also experienced
some initial teething issues with the new blanks production which
delayed commissioning until November 2019. Since then, strong
initial demand has given the Directors confidence to move to a
double shift pattern from February 2020.
As a result, HCT's sales for H1-2020 are materially lower than
H1-2019. While the Directors are now encouraged by the demand for
HCT's blanks, the on-going slowdown in the aerospace industry means
that business in H2-2020 will not recover sufficiently in H2-2020
to make up H1-2020's shortfall.
UK Operation
The UK has made meaningful strides towards commercialising its
proprietary technology and to delivering on some of the previously
announced collaborations.
Excluding grant income, the UK operations have shown a small
rise in sales on a like-for-like basis however, due to the longer
than anticipated lead times, it has fallen short of Directors'
expectations for H1-2020. The Directors expect the year-on-year
progress to continue in H2-2020 but the Board does not expect the
UK operations to recoup this shortfall in H1-2020 by the end of
June 2020.
Financial Outlook
Overall, the Directors are disappointed that the Group's sales
for FY-2020 are now expected to be below the market's expectation
for the full year, as a result of the weak first half. However, the
Board remains confident that the annualised revenue position at the
year-end will demonstrate the significant progress being made by
the Group.
Cost control remains a focus for the Directors and the Group has
reduced costs by GBP900,000/22% over the comparable 6 months to
December 2019.
The Group cash position was GBP2.7m at 31 December 2019.
Summary
Keith Broadbent, CEO of Haydale, said: "Whilst the decision to
close Haydale Taiwan, the later than expected commissioning of the
blanks line and the slowdown in the aerospace sector in the US has
affected our short-term revenues, the Directors remain committed to
delivering the commercial priorities that we have set the Group.
The new global sales team is already delivering positive results
with a strong pipeline of profitable opportunities being actively
pursued. This progress, together with the significant opportunities
and levels of international interest that we have received for our
proprietary technology, gives us confidence in the longer-term
prospects of the Group."
For further information:
Haydale Graphene Industries plc
Keith Broadbent, CEO Tel: +44 (0) 1269 842 946
Gemma Smith, Head of Marketing www.haydale.com
Arden Partners plc (Nominated
Adviser & Broker)
Ruari McGirr / Paul Shackleton Tel: +44 (0) 20 7614 5900
/ Ben Cryer
Notes to Editors
Haydale is a global technologies and materials group that
facilitates the integration of graphene and other nanomaterials
into the next generation of commercial technologies and industrial
materials. With expertise in graphene, silicon carbide and other
nanomaterials, Haydale is able to deliver improvements in
electrical, thermal and mechanical properties, as well as
toughness. Haydale has granted patents for its technologies in
Europe, USA, Australia, Japan and China and operates from six sites
in the UK, USA and the Far East.
For more information please visit: www.haydale.com
Twitter: @haydalegraphene
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END
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