Member Info for Al180

I’ve been looking into the Maintenance and repair organisations (MROs) in a bit more detail. Hardide coated parts were used by MROs as far back as 2019, this was on an A320 when the application was assessed after 4000 flying hours which led to production orders for some MROs in 2021 delayed from 2020 due to Covid. By 2022 spare parts were being fitted to A320/321, A380, A330,A400M and Beluga cargo planes. This was some time before the first supply agreement for the A320 went into production mid 2023 and the contract for a cargo plane towards the end of 2025 financial year.

There seems to be a number of technical and assessment procedures that need to be completed before MROs use Hardide coated spare parts on aircraft that are not fitted with these parts as standard on the production line. The amount of MRO organisations around the world that could fit spare parts for Airbus could run into hundreds or possibly thousands according to AI so I assume adoption by the whole industry is a gradual process.

When this process first started in the early 2000s gushing RNS announcements talking of regular production orders for Airbus models were enthusiastically received by investors followed by disappointment when aerospace revenue was only a few hundred thousand, this mostly due to orders from BAE Systems for military jets. MRO companies haven't been mentioned since the supply agreement for new A320s in 2023, my thoughts are with 14,652 Airbus aircraft in operation as of November 2025 the maintenance market could become increasingly significant as adoption works its way through a worldwide system.

Re engagement with the energy sector at the start of Mat Hamblin and Steve Pauls tenure is starting to pay off , we also have a development project with a new customer in the middle east that could also lead to volume production and the potential of turbine blade orders from the power generation sector in 2026. This along with rapidly growing recurring revenue in the aerospace sector makes the current market cap look unbelievably low.

Hi Marischal, I think we talked about a year ago when I thought you might be one of the ICI guys that developed the original technology for SCE. I believe you were actually involved with another group that developed something similar which became commercial ?

With the certification from the governing bodies and approval from the OEMs both taking many years to complete, as far as I know there isn’t a better technology than Surface Transforms and nobody’s close to providing a third alternative.

Assuming you are who I think you are, could I ask your opinion on future potential competition?

I’ve been looking into some numbers for the ZR1 relating to the current OEM10 contract. Initial production after a delay began in late April. By the end of July, only 180 units had been produced. Since then “Bloggers” that track production say it’s been growing quickly estimating 200 units per month run rate at the start of October. A search indicates ZR1 Bloggers use many different pieces of available information and are usually accurate.

As ST supply front and rear brakes on the ZR1 this equates to 800 discs per month from this contract alone with five other smaller contracts also now in series production. No doubt GM would of stockpiled as many discs as they could knowing Surface transforms manufacturing problems when GMs own production was delayed and severely affected by supply chain issues so I wouldn’t expect revenue for ST to mirror the ZR1 run rate, however the number of cars being produced per month currently is more than the first seven months of the year in total. Hopefully this bodes well for H2 production rates and revenue.

Welcome to LSE Inatthedeepend.

I'm sure ST has a superior product to Brembo, they have better heat dispersion allowing them to run hotter and perform more consistently from cold than Brembo. Particularly important to the OEMs is they can get the required performance using a smaller disc. Although both companies produce ceramic brakes, Brembo use small fragments of carbon that are eventually turned into Silicon Carbide and ST start with a woven carbon matrix, Kevin Johnson compared the difference between the two to Chipboard and Plywood. There are other companies producing ceramic brakes for the racing market but they are a long way from entering the global safety critical supply chain, ST and Brembo look like being the only option open to OEMs for some time to come.

Turkey has ordered 20 Typhoon jets.

The current production rate is 20 planes annually up from 12-14 recently, there are plans to potentially increase the production rate to 30 aircraft per year.

Hardie's revenue from BAE Systems is quite small judging by historical aerospace income when they were the main contributor, but every bit helps,

hTtps://www.bbc.co.uk/news/articles/cvgk8zz7r5lo

Andrew Magson bought 185185 shares on Friday, reported after close of trading.

I think a possible reason for the weak share price reaction to beating forecasts by £0.3m and achieving approximately £1m EBITDA could be the year end cash balance. H1 saw £2.8m revenue and £300k cash generation resulting in £1m cash at the end of the first six months. H2 saw £3.2m revenue with a £200k reduction in cash, this was said in the update………..

“ The cash balance was £0.8m compared with £0.7m a year ago, despite some working capital absorption ahead of the financial year end due to strong trading in the final quarter. This included initial development work with new customers in North America and the Middle East within the energy sector.”

What is being said is that supplying large orders at the end of the 2025 financial year tied up extra cash and payment for these orders were not received before the 30th September year end. This should give a boost to cash and turnover in Q1 2026 so perhaps another reason to see a more realistic share price when the audited accounts and update are published at the end of January.

Seems a very subdued SP reaction for a company that has become profitable with recurring revenue in the aerospace sector that should be £2m PA plus at least going forward with the second Airbus agreement now in production without any further awards.

I would be surprised if this years development projects in the energy sector and new offerings in the industrial sector don’t also lead to further increased revenue in 2026, maybe we need to have the FY results in January to spell this out to the market.

I have a tendency to be optimistic so I am happy to be proved right with the £6m. Well done Hardide , that equates to £3.2m for H2. We can now show a profit for a change when the results are published in January.

The update is usually quite brief , it’s unlikely there will be much information on progress and will have to wait for results publication early next year to get the full details.

What I'm looking out for is firstly the forecast of £5.7m being achieved or exceeded then any snippets of information regarding…..

1) Current development projects with oil and gas companies that would lead to volume production in 2026 if successful.

2) Re engagement with power generation companies that could lead to turbine blade coating sales in 2026

3) If production sales for a new supplier of parts to the oil and gas industry started in 2025.

4) Why aerospace revenue was £1m in H1 when FY24 was £900k, pre production revenue in H1 could only account for a small part of this, I hope it's due to increased use from maintenance and repair organisations as it would show this part of the aerospace business is starting to deliver meaningful income.

5) Prospects of further aerospace supply agreements in 2026

6) More information on initial sales to the semiconductor industry reported in the interims.

7) How the pre coating treatment service has performed in the first few months of being available as a service.

8) How the pre-coated range has developed in new offerings and sales.

9)Developments in new potential markets such as Hydrogen production and storage, Batteries and carbon capture.

Going back to yesterday's post from me, if there was an Edit feature on LSE I would have changed it.

So yes 20,000 shares is the current “Market Size” of Hardide this should be the minimum quantity available at the bid and offer prices in a normal market. If there has been good or bad news released and everyone is trying to buy or sell you may not be able to trade your 20,000 shares as this would not be a normal market.

There is an obligation to report trades at or below quantities of 20.000 shares as they happen, trades larger than this can be reported hours or day after the event.

Market Makers generally hold minimum quantities of stock especially in small cap companies so strong buying or selling momentum is difficult for them to manage, not showing large trades in real time can help the market function. A large buy in a rising market can look like a sell when reporting is delayed and a large sell looks like a buy in a falling market.

Market makers will also trade between themselves to adjust their positions after a large buy or sell so it’s probably to their advantage that the size of the trade is not known until they have done this.

The 794604 share trade from Friday 3rd reported on Monday I suspect was a sell order placed with the Market Makers around Tuesday 30th Sept as this is when the price started to fall. A trade of this size would need the collaboration of a number of Market Makers to execute. People may have been contacted to see if they wanted to take any of this. Friday was probably when the trade could be processed after stock movement from a few different sources by this time the Share Price had already adjusted to the situation.

Every traded company has a "Market Size" this is the minimum amount of shares that the MM's have to trade at or better than the listed Bid and Offer price in a normal market. There is an obligation to report these trades as they happen, trades above market size can be reported later. This may be done to help keep an orderly market and give the market maker time to hedge their position after a big trade.

Back in the day trades between market makers were listed as MM trades but you can't see them now.

You can see the current "Market Size" on this site if you click on "Fundamentals" listed below "Market Cap"

Yes should be some time this month on 21st October last year. I feel confident of achieving the forecast £5.7m, this will demonstrate 18 months of cash generation since a bad H1 2024 resulting in about £1,2m cash in the bank.I believe the market will react well to this after a long history of yearly losses and fundraisings.

I think there is also a chance the update could show revenue of over £6m, The energy sector seems to be revitalised under new management, apart from the development projects this year production revenue for a “Tier 1 supplier of energy systems and projects” was set to begin during FY25

If the industrial sector orders normalise after destocking in the first half and new offerings in pre coated spares and pre treatment service start to add meaningful revenue this sector could improve a lot from the first half.

Aerospace should improve on H1 as the new Airbus agreement moves into production from pre production revenue. I was cautious about this sector in an earlier post as it’s not clear where all the additional turnover came from in the first half, but I doubt it was a one off.

£5m market cap now , this seems like a crazy valuation for a company with £1m cash, break even at £5m turnover and H1 at £2.8m revenue.

I can only think it's a distressed seller or somebody who hasn't been following recent progress.

You can keep up with the current "Market size" on this site if you click on "Fundamentals"

I'm not sure of the time limit on delayed trades, I have in my head that it's three working days but all this comes from a conversation I had with a Market Maker many years ago.

Freddleboy, MM's have an obligation to report trades as they happen at or below "Market Size". In Apiamer's case the market size is 200,000 shares, this is the minimum amount of shares the MM's have to trade at or below the bid and offer price in a normal market. If the trade is larger they can delay the reporting, the MM's may do this to help keep an orderly market as they don't want to be short or have too much stock

The advantage of having a pore free coating was highlighted in the aerospace magazine article linked on this forum a number of times. The superior corrosion protection Hardide gives was especially relevant in humid locations and cold countries where deicer is often used. The ability of the coating to provide an effective seal is now being assessed in new applications including Hydrogen storage and production opening up new potential revenue streams outside of its hardness and wear properties.