Listen to our latest Investing Matters Podcast episode 'Uncovering opportunities with investment trusts' with The AIC's Richard Stone here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
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.
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.
Totally agree.....looking strong after lots of graft winning the contracts.
Monday it is then for the much awaited Trading update. I guess Philip Kirkham has a lot to prepare!
Take your positions.
IWWTBOOTOTW.
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.
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.
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!
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.
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!
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.
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?
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."