TIDMHDD
RNS Number : 1952I
Hardide PLC
28 May 2014
28 May 2014
Hardide plc
("Hardide" or "the Company" or "the Group")
Interim Results
Hardide plc (AIM: HDD), the provider of advanced surface coating
technology, announces its interim results for the six months ended
31 March 2014.
As stated by the Company in its Trading Update on 30 April 2014,
H1 2013 benefitted from strong sales to a major oil and gas
customer but subsequently as a result of a significant inventory
reduction exercise by this customer, results in the second half of
2013 were adversely affected. Therefore, comparison of H1 2014
results with those of H1 2013 is a less helpful indicator of
progress than comparison with H2 2013 and we have therefore
compared these latest results with both H1 and H2 2013 periods.
Overview
-- Turnover increased by 20% to GBP1.31m from H2 2013: GBP1.10m (H1 2013: GBP1.26m)
-- Gross profit increased by 27% to GBP0.88m from H2 2013: GBP0.69m (H1 2013: GBP0.86m)
-- Group operating loss of GBP0.19m against loss before
exceptional items of GBP0.29m in H2 2013 (H1 2013: loss of
GBP0.05m)
-- Major supply contract with the General Electric Company
guaranteeing a minimum turnover of c. $1.3million (GBP0.77m) over
the two years to February 2016
-- The number of customer accounts has increased by 32% from 38 to 50 since September 2013
-- Further diversification of the customer base
-- First orders were received from Italy and Germany, and from
the UK subsea ROV (remotely operated vehicle) sector
-- Aerospace test programmes with Airbus and AgustaWestland continue to progress well.
-- Cash at bank at 31 March 2014 of GBP0.94m
Commenting on the interim results, Robert Goddard, Chairman of
Hardide plc, said:
"The first half of the year progressed well with several notable
'firsts' resulting from the investment in business development and
marketing. Further diversification of the customer base is
pleasing, with the number of accounts rising by 32% and the first
orders secured from Italy and Germany, and in the UK subsea ROV
market.
"The inventory reduction by one major customer that particularly
affected the second half of last year has been completed and demand
is returning to more typical levels. We are greatly encouraged by
the progress of strategic developments, including the supply
agreement with GE and the continued technical testing by Airbus and
AgustaWestland. Our trading continues to improve and we are
confident about a healthy outlook for the year."
- Ends -
For further information:
Hardide plc
Philip Kirkham, CEO Tel: +44 (0) 1869 353 830
Jackie Robinson, Communications www.hardide.com
Manager
finnCap
Stuart Andrews / Grant Bergman Tel: +44 (0)20 7220 0500
www.finncap.com
Newgate Threadneedle Tel: +44 207 653 9850
Graham Herring / Heather Armstrong www.newgatethreadneedle.com
Notes to editors:
Hardide develops, manufactures and applies nano-structured
tungsten-carbide coatings to a wide range of engineering
components. Its patented technology is unique in combining in one
material a mix of toughness and resistance to abrasion, erosion and
corrosion; together with the ability to coat accurately interior
surfaces and complex geometries. The material is proven to offer
dramatic improvements in component life, particularly when applied
to components that operate in very aggressive environments. This
results in cost savings through reduced downtime and increased
operational efficiency. Customers include leading companies
operating in oil and gas exploration and production, valve and pump
manufacturing, nuclear, advanced engineering and aerospace
industries.
CHAIRMAN'S STATEMENT
The Board is pleased to report that the Company has made good
progress on many fronts. There has been a return to normal order
levels from the customer that undertook a substantial stock
reduction exercise during H2 2013, together with stable revenues
from other existing customers and some notable new business.
The Group is reporting H1 2014 revenue of GBP1.31m, an increase
of 20% compared with H2 2013 (GBP1.10m) and up 4% against the same
period last year (H1 2013: GBP1.26m). Group gross profit was
GBP0.88m, an increase of 27% from GBP0.69m in H2 2013 and 3% from
H1 2013 (GBP0.86m). After the deliberate increase in expenditure on
business development and technical staffing, the Group made an
operating loss of GBP0.19m. This compares with an underlying loss
(excluding impairments and provisions) of GBP0.29m in H2 2013 (H1
2013: operating loss of GBP0.05m).
Sales across our sectors of oil & gas, aerospace and
advanced engineering rose significantly from H2 2013 and also
relative to H1 2013. The number of active accounts continued its
upward trend, rising from 38 to 50 over the period. These include
orders from customers in Italy and Germany which are new
geographies for the Group, as well as the first order from the
subsea ROV (remotely operated vehicle) sector for the coating of a
critical part of the thruster system for ROVs. The customer for
this application reported "greatly improved performance" and a
"vast improvement" in wear resistance. After many years of
development, the first volume orders were received for parts for a
new type of airport 3D X-ray baggage scanning machine, and that has
now gone into production with a global manufacturer in this
sector.
Broadening the customer base remains a key strategic goal and
with the increase in business development resources in 2013, the
Company is now engaged with new companies on laboratory testing and
field trials for a wide range of pre-qualified applications. For
example, trials are underway in Germany at a major flow control
company and for plastic extrusion tooling applications. In North
America our increased resource and efforts are also having good
results. Field trials are in progress in the Middle East and the
USA on a critical component for a down-hole telemetry tool. Sales
of the coating for TSP diamonds for oil and gas industry tools
continued to rise and development work is underway on variances of
this product. An international patent was filed for the coating of
TSP diamonds.
The aerospace testing programmes with Airbus and AgustaWestland
continue to progress well. In January 2014, the Company started
developing its systems to standards that will comply with the
aerospace industry's Nadcap accreditation.
In March 2014, we entered into a major supply contract with the
General Electric Company that has a guaranteed minimum turnover of
c. $1.3million over the two years to February 2016. This has not
contributed to the H1 2014 results but will do so in H2 2014.
Trials are progressing with GE on other applications.
The Company is very pleased with an order that has been secured
post-period for a fracking tool application from a major global
oilfield services company. This is significant due to the stature
of the customer and the potential with it for this and other
applications. Also it is the first production order for a fracking
tool component. More than 500 Hardide-coated components are now
being deployed in a down-hole tool in one field in the USA and
which may lead to further sales for the Company in the future.
Looking forward, an increase in UK plant capacity is being
planned and detailed discussions and planning are underway
regarding a resumption of production in the USA.
Overall, Company performance is good, our trading continues to
improve and the Board is positive about the outlook for the full
year.
Robert Goddard
Chairman
28 May 2014
Consolidated Statement of Comprehensive Income
For the period ended 31 March 2014
GBP 000 6 months to Year to 6 months to 6 months
to
31 March 2014 30 September 30 September 31 March
2013 2013 2013
(audited) (unaudited) (unaudited)
(unaudited)
Revenue 1,311 2,359 1,095 1,264
Cost of Sales (433) (815) (406) (409)
Gross Profit 878 1,544 689 855
----------------------------- --------------- -------------- -------------- -------------
Administrative Expenses (1,011) (1,769) (925) (844)
Depreciation (59) (110) (53) (57)
Exceptional Items:
Impairment of fixed assets - (90) (90) -
Provision for onerous lease - (376) (376) -
Operating (Loss) (192) (801) (755) (46)
----------------------------- --------------- -------------- -------------- -------------
Finance Income 4 2 1 1
Finance Costs (48) (103) (46) (57)
Loss on ordinary activities
before tax (236) (902) (800) (102)
----------------------------- --------------- -------------- -------------- -------------
Tax - 54 54 -
Loss on ordinary activities
after tax (236) (848) (746) (102)
----------------------------- --------------- -------------- -------------- -------------
Consolidated Statement of Changes in Equity
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