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Crazy MCap and almost back to my buy in price. This is a s reaming add-on for so many bigger suitors as the cash starts to flow from years of R&D losses....a peach to be picked. 25-30p would be a cheap buy out price before a sensible rebate precludes it.
Why on earth doesn't the hard chrome company that lost its Airbus orders to Hardide not buy Hardide, or Airbus or many others......just a matter of patience. The only way from here is up...
The growth rate was softened by the delay of an expected large project order for the coating of turbine blades. This is now expected later in this calendar year.
Agreed Adastra…. Patience. Positive update. Just some sell on news brigade shenanigans.
Onward and upwArds!
From the interims, this order could drop anytime - that will trigger the bounce.....patience.
The fact that Hardide is now receiving regular orders from Airbus for the coating of parts previously supplied by a competitor using hard chrome is significant as the switch only happened at the end of H1. The key note in the t/u is that aerospace orders have indeed picked up in Q3. This is a significant milestone. The company was also expecting a follow on wind turbine contract to drop into this financial year and that will probably be the next value trigger when it crystallizes in the near future. The company is now extremely vulnerable to a predatory bid as it clearly transitions from testing with OEMs to contracts which have taken years to come to fruition. The future looks very good indeed from here as the accumulated IP starts to put cash in the kitty. Valuable contracts with tier one players should start to flow in the coming months and Hardide has plenty of headroom to accommodate growth without the need for capex.
Regarding the size of facilities, the new site is large enough for expansion as the need to have space to ramp up was already factored in the move
From July 2021......
Commenting on the approval, Philip Kirkham, CEO of Hardide plc, said:
"This approval is very positive news and is the result of extensive testing and verification by Airbus of all the processes at the newly built Longlands Road facility. The Airbus approval is testament to our coatings' capabilities and means that we can now close the door on our old premises and concentrate all our aerospace processing at our modern and much larger, custom-fitted new site."
I should add that in terms of increasing production capacity I am well aware they can build new reactors. The issue is how many will they need, have they got the space in their existing factory and how are new potential and existing cust9mers going to react to this scenario?
TT - you mention profit, Hardide have already stated in their last results the following statement
Quote - “ We should achieve EPS positive results at approximately £7.5m-£8.0m revenue.”
Thus, with an operational capacity that can provide at least £10m sales revenue they will indeed be well into profit at full capacity.
I’m wondering whether a point will be reached when they can no longer meet the growing demand we are likely to see for their products across all sectors. What happens then?
Do they partner up with a bigger player that has the industrial and financial muscle to accelerate scaling up? Or do they just get taken out by a bigger player that has a growing market they can feed?
Whatever happens it makes for an interesting scenario.
Exactly right Adastra ,
If we run at full capacity then we should, I think, break into profit. Any new reactors will only add to that. However new premises and reactors will take time and money. I believe that HDD will be a slow grower but with a USP such as ours it has tremendous potential. One for the grandkids perhaps!
The other significant comment from the interims that accommodates the Airbus uptick is:
The Group is well invested and, in general, has sufficient operational capacity to support approximately double the current annualised revenue, depending on product mix, over the short to medium term without further major capital investment.
Hi JJLH,
Yes I too was disappointed by the 3 % aerospace revenue. We started testing some 14 years ago! Both sights have space for new reactors possible 4/5 in total depending on the size chosen. New reactors take about a year or so to deliver. I think they deliver about £1.5 Mill revenue per each.
For me the real trigger will be the hunt for new premises as I don't think the current ones can be expanded. However an announcement about purchasing new reactors will be welcome for now!
Adastra - indeed and the words ‘high volume’ sound particularly enticing.
The trading update surely landing this coming week.
I’m confident of a v bullish synopsis.
Of particular significance is a new approval received for high volume components for the Airbus A320 where the Hardide coating is replacing a competitor's coating.
Looking for retrace back to 30p as I load up on the way.
JJLH - we all make mistakes in investing no point in beating yourself up.
It has taken a long time to gain traction especially in the aerospace sector but it’s happening now and the pace is accelerating.
Don’t give up now after all these years when imo this is on the cusp of pushing on. In terms of utilising their capacity they’re at about 50/60% right now IIRC? So maybe expansion will be proposed in the next 12 months or so if growth continues apace. I think they are pretty sensible management.
I await the results with trepidation. As a long term shareholder I was attracted to the ‘science’ and the barrier to entry for the aerospace market. Had I known that testing would take longer than obtaining approval for a new drug (10 years plus) I would have bailed out years ago but I foolishly held on and the last interim results whilst encouraging were a kick in the ******* Aerospace just 3% of sales. I expect a big increase this time round but I would have hoped that by now we might have had some indication that they needed to increase capacity especially that the lead time for new equipment is in the region of 12 months. The board needs to learn how to manage expectation. I am not holding my breath.
Yes. Next week will give a good perspective on current and near future prospects. As each of the three markets that Hardide services has shown a good upswing we can expect decent traction. There should be a few nice surprises here given the positives highlighted in the interims.
Monday it is then for the much awaited Trading update. I guess Philip Kirkham has a lot to prepare!
Take your positions.
IWWTBOOTOTW.
Totally agree.....looking strong after lots of graft winning the contracts.
Trading update is imminent now. I am expecting an Uber bullish report on trading. All sectors the company is operating in should be buoyant. The company is now, after many years of hard graft, R&D etc, in a super strong position to push on. The banning of HCP next year means Hardides technology is the way to go. An added bonus is the green revolution. HDD technology should be a winner there too.
Waiting for the rerate.
This article published last week shows just how Hardide is coming of age as contracts develop. This IP takes years to secure the contracts but the barriers to entry are huge and the rewards are very lucrative and sticky.
Stock supply must be very tight here. Small buys ticking the price up.
Could be HDD employees who know from the inside what’s going on?
The rise prior to the now imminent trading update is curious. Quite a number of relatively small buy trades has lifted the price from 11 to 15p. So, who has been buying? Certainly not institutions. It’s likely to be either bottom fishing PI’s (like myself although I got in before the rise with average of 11) OR possibly insider employees within the company itself. Why not?
They would be privy to a certain amount of confidential information, at least broadly speaking, on orders and the general ‘health’ of progress in terms of activity and business.
I might speculate that the trading update will say they are at least slightly ahead of market expectations. Any such message and this will pass 20p.