Hardide sees improvements across all key markets

Surface coating technology company Hardide said in a trading update on Thursday that expected improvements across all of its key markets had come through in the closing months of its financial year.

The AIM-traded firm said that was evidenced by the value of orders received during the second half at £2.5m, which was 52% higher than in the first half, though a significant proportion of it would be recognised as revenue in the first half of the new financial year.

It said that shift meant that revenue for the second half of the year ended 30 September would be in line with that of the first half, though a “disciplined approach” to cost meant that its EBITDA loss would be in line with expectations.

Cash at year-end totalled around £1.5m.

Going into the new year, Hardide said there were “promising signs of recovery” across all its key sectors, noting that in energy, one major customer, whose demand reduced significantly in late 2020 due to the pandemic-induced downturn, was now placing orders for delivery in the first quarter of 2022.

Demand from a major UK-based oil and gas customer was also returning, and in addition, large project-based orders from a US customer for sand screens had been placed recently for first quarter delivery.

In the power generation sector, Hardide said the substantial first order for coated gas turbine blades that it recently announced was also due for delivery in the first quarter, with developments still continuing with EDF Energy on the coating of large steam turbine blades.

Looking at industrial pumps, demand from the company’s major manufacturing customer in North America was still strong, and was projected to continue in the first half of the new financial year.

In aerospace, Hardide said the sector was also showing “promising signs” of a recovery, noting that following the successful approval by Airbus of its new Bicester facility, initial orders had been received for A320 aircraft wing components.

The coating had already been approved on components for the A330, A380 and A400M aircraft, with the company awaiting the finalisation of commercial terms between Airbus and one of its tier 1 suppliers before that supplier could sign a major supply agreement with Hardide.

Leonardo Helicopters had completed its long-running transmission system test programme, which included Hardide-coated components, with the company expecting production orders there beginning in the 2022 financial year.

Other development projects were also underway with multiple aerospace customers, including landing gear and maintenance, repair and overhaul (MRO) companies.

Finally, in alternative energy and other sectors, Hardide said testing and evaluation of its coated components were also progressing with a large US-based manufacturer of electric vehicles.

Indications of the coating's performance were said to be “positive”, with more progress expected in the coming months.

The company said it was also working on other developments for applications in various sectors of alternative energy production, including solar, nuclear and gas turbines.

“Hardide has experienced significant improvements across all key markets over the course of the second half, and we are seeing increased orders as we continue to emerge out of the worst of the Covid-19 pandemic,” said chairman Robert Goddard.

“The board and management have continued to make excellent progress in developing the group's strategy, particularly to build its position in the global transition to alternative energy sources.

“The new opportunity with a large manufacturer of electric vehicles in the US is an exciting prospect for Hardide.”

Goddard said the board believed that a number of factors, including diversification of its customer base, product development, increased awareness of the benefits of its coatings and strong customer relationships, positioned Hardid well for growth.

“The board is looking forward to an improved performance in 2022.”

At 1430 BST, shares in Hardide were up 15.16% at 35.7p.