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I appreciated the update. Over the last 12 months Hardide has commercialised a lower temperature product (350C vs 500C) and with the new larger furnace have the flexibility to coat larger items. This is good news and presumably supports the statement, "Multiple test programmes for new applications are progressing strongly with customers in various sectors and therefore present encouraging prospects for new business in the 2020-21 financial year". It would be great hear when the company starts converting these new accounts - at a time when there is so much bad news great to hear of continued successes. The major oil and gas order in Q1 next year and a new Airbus order shortly a welcome sign.
All seems pretty good. Major O & G contract back on. All new reactors commissioned. All test programs preceding as planned. New orders expected.
The revenue has dropped back to year end '18 but we've got 11 months going forward this year. With the O & G order back on and re-reading the latest new items We should be heading for a record year.
Multiple test programmes for new applications are progressing strongly with customers in various sectors and therefore present encouraging prospects for new business in the 2020-21 financial year. Looking beyond the disruption of the present COVID-19 pandemic, the Board of Hardide believes there are strong grounds for expecting a return to increasing demand and remain positive about the longer-term growth of the Company.
The Group expects to report its preliminary results for the year to 30 September 2020 on or around 7 December 2020.
Hardide PLC Pre-close Trading Update
September 23 2020 - 07:00AM
UK Regulatory (RNS & others)
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RNS Number : 7760Z
23 September 2020
The information communicated in this announcement is inside information for the purposes of Article 7 of Regulation 596/2014.
23 September 2020
("Hardide" or "the Group" or "the Company")
Pre-close Trading Update
Hardide plc (AIM: HDD), the developer and provider of advanced surface coating technology, is pleased to provide an update on trading for the financial year ending 30 September 2020.
The Group expects (subject to audit and year-end adjustments) to report revenues of GBP4.7 million and an EBITDA loss of c.GBP0.5 million. This is in line with the Trading Update issued on 16 July 2020. Cash at bank is expected to be c.GBP2.7 million and there are capital commitments of c.GBP0.5 million remaining to fully complete the investment in the UK site relocation.
Production has continued uninterrupted at both the UK and US sites throughout the COVID-19 pandemic, with significant emphasis being placed on health and safety measures to protect staff and contractors.
The relocation of the business to the new site at Longlands Road, Bicester is now complete, on schedule and at projected cost. After delays due to travel restrictions, the large reactor has now been installed and commissioned, which completes the installation of all new equipment at the facility. This reactor, together with the new large pre-treatment line, increases considerably the size range of components that can be coated. One Airbus-approved reactor is still operational at the Wedgwood Road site and this will remain in place until the Longlands Road site is fully approved by Airbus. In addition to the developments in the UK, a fourth reactor has been installed at the Martinsville, Virginia facility making a total of nine reactors in the Group.
The extensive process of Airbus' qualification for the new site is progressing well and on schedule to be completed in early 2021. Orders are now starting to be received for the Airbus components that have been approved previously and shortly further parts are due to be approved by Airbus.
The Group previously reported the impact on its current year revenue from a delay in receiving a major oil and gas project order caused by the COVID-19 pandemic. Hardide is pleased to report that this order has now been received and will give a positive start to the first quarter of the new financial year. Generally, there has been a reduction in demand from oil and gas customers in this current second half as the global economy has slowed. However, it is pleasing that demand from customers in flow control and precision engineering has not been significantly affected.
Multiple test programmes for new applications are progressing strongly with customers in various sectors and therefore present encouraging prospects for n
I have to say - I do not feel like gamboling.
You're quite right re Leonardo . But how could HDD have moved this on? Sure it's frustrating but regarding selling at any price one doesn't have to. I sold a few at 75p in August last year and recycled the proceeds to a buy at 29p recently. You can sell at any price or buy at any price. We are basically gamboling with no bookies profit to worry about just our own sell/buy decisions that to live with! Got it wrong many times!
New releases waiting for space on the Leonardo test rig for the past 3 years not really that inspiring! Various shareholders have run out of patience and selling at any price. Thank goodness Hardide's balance sheet was strong going into this pandemic. I just think the company needs to be doing more to demonstrate progress through these difficult times and keeping shareholders more regularly updated.
Lot of info in the July trading update and also the news items on the website. Worth a look.
It would be good to hear of new customer conversions and production applications. Despite challenges there should be nothing to stop testing and approval of new customers and product applications.
Just noticed there’s three trades above at 26. Just to let you know, the last one showing is mine and it’s a buy! (No,not the £8.06! ????) G
Apologies for the double post - the earlier comment didn’t appear for 6 hours.
My attitude remains the same really - I’m hopeful. It seems like a great product and I’m hoping that after 15 years or so they’ve finally worked out how to make a profit from it.
My view is about the same. In the end, they still haven’t made a profit (maybe once?) in how long? 15, 20 years?
I'm pleased your rather negative view of HDD has changed to a more positive one. I do wish to say though that the info I supplied is publicly and freely available on the RNS and news sections of the website. Perhaps an occasional visit? In fact the BoD is very good at communication - far better than many.
This financial year will be losses but by calendar year end I'm certain things will be clearer. By half year March we will be breaking even and by year end into profit. We've completed so many successful test programs for this not to happen.
My breakeven is 36p and it looks as if two or three other start-up companies ( start-up from a financial perspective) I hold are about to move into profit/stroke growth with hopefully good SP rises. I will maybe sell a few and take a profit there and top-up here because of the massive potential of a truly unique product with a long and formidable barrier of entry for any competitor. As a bonus I think any major problems that the company has had since I've been here is from the several O & G recessions. The BoD has always weathered those storms and gets the big decisions right.
I can’t remember exactly when I first invested - sometime around 2007 - and I’m currently about £5000 down. It seems like a great company and product and I wish them all the best, but in the end I’m in it for the money and they just never seem to get it going. Maybe the next two years are going to be the time it finally builds momentum - but then I have a nagging feeling I’ll be listening to another explanation of why it still hasn’t quite happened.
I agree if the new site is only at 50% capacity then that’s significant - that does make the move sound like a bigger deal than I had previously thought.
I do hope they get away from oil and gas - it seems like such an unreliable customer. If the oil price drops below a certain level great swathes of it shut down.
Hi RobR, I first invested in November 2006 @10.9p which incidentally following the share reorganization is £43.60 a pop!
After all this time I feel a part of the company hence the "we". HDD made a deliberate decision to equip the new Bicester site with brand new equipment throughout and that has produced a site far more efficient than the old one . Importantly it is only half occupied Capacity can be doubled in 12 months or so. This could be seen as an important statement of intent - but hardly a sticking plaster! Martinsville also has capacity to almost double production in a similar amount of time.
Current overall capacity is sufficient to cover costs and generate profits. Double the capacity and profits will be greatly multiplied because of the high margins. Because we have a patented and truly unique process that is proven in the field I can only see growth because we have no comparable competitors.
There is only one drawback. It takes time to expand. A new reactor has a lead time of some 10 to 12 months and costs around 1 Mill with associated equipment. However with production revenue at 1 Mill per year it only take some 2 years to recover both the startup costs and the 2 year running costs and then it's profits. The reactors last for years. In spite of this lead time restriction the BoD has anticipated demand and orders in such a way that we've never yet been stifled by production capacity. This is perhaps an advantage of long term testing as well as providing barriers of entry. In my book this shows sound business judgement. My guess is that because we can now double capacity relatively easily a new site may be the next option, perhaps overseas. The Far East/Asia is an option.
You do seem a little negative and as you've followed HDD for 9 years I'm not sure why this is so. There must be a reason - are you invested?
I suppose ultimately where I’m going with this, is that it feels like they need outside investment. Or maybe it will only ever be a small company? It’s hard to tell what the long term plan is.
Hi - I’m aware of recent developments (I’ve been following the company for over 10 years) and my understanding based on various comments on here and other interviews was that should things go to plan there’ll still be a capacity issue in the near future - the recent expansion feels more like a sticking plaster (quite possibly I’m completely wrong here) although obviously it’s a small company so there are limits to what they can do.
I conclude that the last 9 years of testing has been to increase demand in other areas and *therefore* diversify. I’m not aware of a plan to move away from oil and gas, although that’s my hope. So if there is a capacity issue again shortly I’m hoping oil and gas is the loser. It seems like oil and gas isn’t where the big opportunities lie.
When you say ‘we’, does that indicate that you work for the company?
Hi Robr, I think you should read the first three news stories on the companies website to give you a recent flavour of what is going on at the moment.
You might then consider why we have been testing with Airbus, and a host of other aerospace companies , over the last 9 (repeat 9) years or so, and also consider why we are testing with EDF over the last 2 to 3 years. Why are we doing that? You may conclude it is to diversify away from O & G.
Finally consider that a year ago we virtually had 5 production reactors and 1 R & D and testing reactor. We now have upgraded the old Bicester reactors and acquired 3 more. One of these is new larger development to accommodate longer Turbine blades and aircraft landing gear. In effect we have doubled our production capacity in the last year.
What more do you suggest we actually do. Feel free to raise any queries you may have but do spend some time on the website and explore it because it is a mine of information.
...and another round of buying.
Fewer orders in the short term isn't great, but my point was really about long term direction. They seemed to be barrelling along trying to create extra demand without a strategy to meet the demand should it arrive ("a good problem to have"). Maybe the pandemic will demonstrate that they should be shifting away from the oil and gas sector - reliance on fossil fuels has really got to stop in the next decade or two anyway.
We had a record 1st half and could have had a record full year. But as the July update says, revenue is expected to be below last years because sales are down owing to the slowing O & G market coupled with an important customer project delay. This is in spite of a greatly increased production capacity during the 2nd half. It's just a good old fashioned lack of orders.
It's to late now to overcome this but I don't think the O & G will recover quickly and we are still testing on the Turbine blade project. Will we complete the testing in the new financial year? Somehow I doubt it when you see how long it has been already. Sods law says that the new larger blades processed in the new larger reactor will have new larger tests!!!
So for know we will have to look to the aviation market for growth. As we are a new development the general aviation slowdown will not have to much effect and there are small signs of recovery anyway. Because we are a cost effective solution we should still see increased sales at some point. It's just a case of which point!
I've stopped wondering about the logic employed when people buy and sell this share.
One thing I'm hanging on to is that I think the pandemic might have helped Hardide. It looked like they were going to struggle to meet demand, but this has given them a little bit of breathing room. The after-effect of this is going to rumble on for some time, particularly if it returns with a vengance in winter.
I've just re-read some of the news items on the website. It seems pretty clear that we are potentially on a cusp of new orders as the recent test programs that finished in July all involved the end users and were considered successful.
Could be that September sees new orders and applications hence perhaps the Friday rise?
Me and my big mouth - Bid currently at 26! Something coming on down the turnpike? Finger on the pulse RobR.