Hardide loss deepens on mounting costs

(Sharecast News) - Hardide on Monday reported a double digit increase in profits, though its loss widened due to increased investment and the costs of its new facility.
The surface coating technology developer booked a loss before tax of £1.2m for the six months ended 30 September, compared with £0.9m of red ink in the same period last year, as its gross margin dropped from 52% to 48%.

This decline in margin was due to the costs associated with the AIM traded company's upcoming move to a new building in Bicester, where operations are slated to commence in autumn next year, as well as increased investment in marketing, capacity and production equipment.

Hardide said its change of location would "enhance efficiency and open up new business opportunities", while also ensuring that the company operates from a modern facility.

Meanwhile, revenue was 10% higher at £5.0m as sales grew across all sectors, with 18% growth in North American demand meaning the region accounted for 65% of total turnover.

Revenue growth was expected to continue in the second half of the year, while Hardide added that gross profit margins are likely to remain at around the same level as the comparable period 12 months prior.

Chairman Robert Goddard said: "We are looking forward to the relocation of the UK business to the new site in 2020 and the increase in capacity and new opportunities that it will bring. We have made a very positive start to the new financial year and the board is confident of continued growth.

"This is a strategic priority and we are prepared to invest in additional R&D and marketing to achieve this and to position the company strongly for the future."

Hardide shares were up by 1.64% at 62.00p at 1557 GMT.