Hardide Plc (LON:HDD) Chief Executive Officer Phillip Kirkham caught up with DirectorsTalk for an exclusive interview to discuss their interim results, continued growth in the oil & gas sector, Airbus & Leonardo projects, their US facility and expected news flow for the coming months.
Q1: First off, congratulations on a strong set of results. Phil, can you talk us through the highlights?
A1: Certainly. It’s a very positive performance in the first half of this year with revenues up 43% compared to the same period last year and a much-reduced loss at EBITDA level.
These results continue the trend we’ve seen over the past 5 half-year results, with each half showing an increase in revenue, increase in growth profit, increase in gross margin and reducing losses. In addition, we’ve got a much stronger balance sheet now following the over-subscribed fundraising that we did last October.
We are seeing an increased demand from our existing customers within the oil and gas sector but also from brand new customers and new development projects.
Volume sales have also commenced from the two major supply agreements that we mentioned last year with the first one producing revenue in the first half and the second one just starting to produce revenue in the second half. We’re also making very good progress with Airbus towards finalising all the engineering and production details we need to move forward there.
The US facility continues to perform well with the new reactor on schedule for delivery in the second half and we’re now starting to see a lot of interest from US aerospace companies.
Q2: As you mentioned, the oil and gas sector has shown strong growth for Hardide, do you see this continuing?
A2: The signs are very encouraging, and we continue to see further business in this sector, the oil and gas price rise we’ve seen recently should also stimulate production. Interestingly, our major oil and gas customers report continuing strong demand through the rest of 2018 and as I mentioned earlier, we now have new applications starting to generate revenue.
Q3: You’ve detailed development and testing work with Airbus and Leonardo Helicopters, can you tell us how these relationships are progressing?
A3: Both Airbus and Leonardo are putting in a tremendous amount of time and effort into these projects which indicates the importance of them getting Hardide on flying parts as soon as possible.
The detailed engineering work is continuing and is making really good progress and we are of course working with other aerospace OEM’s on a variety of parts which now includes aerospace companies based in the US.
Q4: If we just turn to the US facility in Virginia, it appears to be progressing well, what will this add to the group?
A4: Well, having a facility in North America has been really key to some of the developments we’re making with customers there and we see significant further opportunities in this region in many sectors. To ensure that we capitalise on these opportunities, we’re actually in the process of recruiting for an additional US-based Business Development Manager to support this.
The facility itself continues to perform very well with excellent quality and excellent on time delivery metrics. The new coating reactor, currently being manufactured, will be delivered and commissioned before the end of the financial year and will ensure that we have the capacity to take on more business there.
Q5: Finally, what news flow can investors expect to see in the remainder of the year for Hardide?
A5: I wish we could give more detail about the applications and the customers we’ve recently developed but the industry is very secretive, and we’re bound by very strict non-disclosure agreements not to divulge any information. As you can understand, this makes it very difficult for us to give regular news flow.
However, we do hope to be able to say more about the aerospace developments in the near future and we will of course continue to keep the market abreast of any changes for the forecast numbers through trading updates where necessary.
