Hardide plc (LON:HDD) Chief Executive Officer Philip Kirkham caught up with DirectorsTalk for an exclusive interview to discuss the highlights from their preliminary results, the progress at the new facility, new developments and what we can expect to see from the coming over the coming months.
Q1: Now, Hardide have announced pre-lim results for the year ended 30th September 2020, can you take us through those highlights?
A1: Some robust results with a turnover of $4.8 million which is only 6% down on the previous year which was an all-time high revenue.
Very strong sales in the first half of the year at £3 million and that continued into the second half until the disruptions caused by the COVID pandemic began to affect us, primarily with our oil and gas customers. All of the other market sectors we have, other than oil and gas, increased in percentage terms last year, oil and gas was down 14% in total but despite the overall lower revenue, our gross margin improved by 1%, 49% and the gross profit was only slightly lower than last year at £2.3 million.
The group itself, EBITDA breakeven for the first half of the year and we were at that time looking for another record year before the impact of COVID-19 which particularly hit us in the last quarter of the financial year.
Overall, we’re pleased to report a solid set of results in very challenging global economic conditions.
Q2: Can you tell us how the relocation to the new site is progressing and what it’ll mean for the company?
A2: Well, we’ve outgrown the old site and we physically couldn’t get any more kit in there so future revenues would’ve been severely restricted.
This move was all about growth of the business. As part of the move, we’ve installed more coating capacity and modern processing equipment and the new site is double the floor space. We were very pleased to secure this fantastic new building which is only half a mile or so from the original site which meant that we were able to retain all of our skilled and very knowledgeable staff which was a very important factor for us. It’s provided us with a very modern, high tech and efficient production environment with enhanced levels of environmental controls and energy efficiency.
When we took it on, it was an empty shell so it’s enabled us to lay out the floor space to maximise efficiency and to accommodate two new coating reactors and a second larger nickel strike line as well as new cleaning equipment and other equipment that has further improved our environmental credentials.
So, the group now has a total of nine operational coating reactors with four in the US facility and that compares with six at the end of 2019. This includes one larger reactor in the UK, capable of coating components up to 1.5 metres long which is expected to bring additional applications in the power generation, aerospace, and energy sectors.
Incidentally, we’ve just launched a video fly-through of the new facility which is available on our website where people can actually see it for themselves.
Q3: The company is continually working on improving and inventing new technology with some noteworthy developments made last year, can you tell us a bit more about that?
A3: The new patent for both steam and gas turbine blades is now in its international patenting phase and together with the new larger reactor, this has given us the opportunity to blades for trials with EDF. We’ve also got another European turbine manufacturer who has also recommended our coating to one of their clients for an upcoming turbine refurbishment programme.
One of the exciting things recently has been the ability for us to coat very complex 3D fine metal mesh, it’s used in many industries for filtration purposes, and this has resulted in large orders from a major oil and gas production company for their wells. The uses of this technology we’ve developed also goes far wider into many areas of industrial filtration and we’ve got trials underway there with other customers.
We’ve also got a number of developments in the renewable and green energy sector where we’re already supplying a European company involved in the solar cell production process and that business is expected to grow significantly.
The other very interesting development at the moment is with a well-known blue chip US corporation but I’m afraid I can’t really say much more about that at the moment as it’s all very top secret.
Q4: Looking forward, what can we expect to see from Hardide in the next year?
A4: In the short term, we remain cautious in our outlook due to the uncertainty that COVID has brought and the impact on our customers visibility of their own businesses is quite difficult at the moment. The positive news recently about the vaccines that have been developed can only be good news for the global economy.
We’re confident that as the world economy recover, the volume demand will return and we’ll continue our previous upward trajectory that we’ve been on for the past few years.
Our other markets remain resilient and we’ve got strong sustainable strategy and business model and our high operational gearing means that our financial performance will benefit significantly as revenues recover.
We’re excited by emerging possibilities in the renewable and clean energy sectors and see these forming an increasing part of our overall revenue in the future.
