Hardide Regulatory News (HDD)

8 May 2006 09:10

Hardide PLC08 May 2006 Press Release 8 May 2006 The following replaces the Interim Results announcement released today at 7.00amunder RNS number 5595C. In the Proforma Profit and Loss Account the period headings for the final twocolumns have been amended, such that they now read 'Six months ended 31st March2005' and 'Year ending 30th September 2005.' The full amended release appears below. Hardide plc ("Hardide" or "the Company" or "the Group") Interim Results Hardide plc (AIM: HDD), the provider of unique surface engineering technology,announces its Interim Results for the six months ended 31 March 2006. The results of Hardide's wholly-owned operating subsidiary, Hardide CoatingsLimited, cover the trading period for the six months to 31 March 2005 and. Highlights • Turnover up to £1,063,000• Gross profit increased to £653,000• Loss before tax of £238,000• Loss per share of 0.17p• Formal approved supplier status to BAE Systems• Houston facility scheduled to commence production on 1 October 2006• New applications being successfully trialed Commenting on the results, Jim Murray-Smith, Chief Executive of Hardide plc,said: "These results demonstrate Hardide's continued strong performance and I amconfident that this will continue in the months ahead. The production facilityin Houston will provide the Company with an ideal platform to satisfy existingstrong demand and, importantly, will allow us to service new customers andprovide new applications." For further information: Hardide plcJim Murray Smith, Chief Executive Tel: +44 (0) 1869 353 830jmurray-smith@hardide.com www.hardide.com Daniel Stewart & Co plcTom Jenkins / Chloe Ponsonby Tel: +44 (0) 20 7776 6550 chloe.ponsonby@danielstewart.co.uk Media enquiries:AbchurchChris Lane / Katherine Murphy Tel: +44 (0) 20 7398 7700chris.lane@abchurch-group.com www.abchurch-group.com Chairman's Statement The six months to 31 March 2006 have shown continuous and solid growth with theUK coatings business showing a pre-tax profit of £34,000 compared to a pre-taxloss of £273,000 in the same period last year. Your Board took the decision in November 2006 to capitalise on the interestshown in Hardide's technology by US-based companies by setting up amanufacturing facility in the world energy capital of Houston, Texas. Funds of£800,000 were raised in December 2005 to accelerate this expansion. This nextstage in the Company's international expansion will provide a platform for newcustomers and new applications. I would like to pay special thanks to Hardide's Chief Executive Officer, JimMurray-Smith, for his energy and determination in pursuit of the Company'ssuccess. I also warmly welcome Peter Davenport to the Board in his role asFinance Director. The Board is confident of the Company's continued steady progress for theremainder of the financial year and beyond as the UK and international customerbase expands. David Chestnutt Chairman 8 May 2006 Chief Executive's Report These results demonstrate commercial progress and a strong balance sheet in thesix months to 31 March 2006. In order to illustrate clearly the Company'sprogress, a proforma profit and loss account for Hardide Coatings Limited, theUK coatings business, is included. Revenue from Hardide Coatings Limited increased to £1.06 million in the sixmonths to March 2006 compared to £496,000 over the same period last year.Significant growth was achieved in each of the Company's key sectors of oil &gas, valves and pumps. The oil and gas sector remains our largest market sectoraccounting for almost 75% of Company turnover. This sector proved particularlybuoyant with sales more than doubling in both the UK and the internationalbusiness. The valve and pump sectors have also demonstrated good growth, withthe pump sector, being driven from the US, achieving a comparative increase insales of 170%. During the first six months, the UK coatings business achieved EBITDA of£150,000. Group EBITDA, including the plc and US business, totalled a loss of£136,000. Pre-tax profit for Hardide Coatings Limited was £34,000 compared to aloss of £273,000 in the same period last year. The Group made a pre-tax loss of£238,000. The Company has a healthy net cash balance of £1.0 million. Over the last six months we have continued to develop strategic relationshipswith leading multi-national companies in the oil & gas service sector. As wellas increasing the volume of business from existing applications, many customershave new applications on trial which we expect to lead to commercial orders inthe next six months. We are seeing a substantial increase in the number ofcustomers taking advantage of our unique seven day turnaround service. Inaddition, the Company completed its first commercial order for BAE Systems,since receiving formal approved supplier status, to coat components for theEurofighter Typhoon aircraft. Our 17,000 sq. ft. purpose-built manufacturing facility is under construction inthe heart of the energy community in Houston, Texas. Following a summer periodof installation and commissioning, the facility is due to open on 1 October2006. Feedback has been positive from existing and potential US customersacross all our target sectors who want to achieve shorter supply line times thanis possible from the UK. Our management team is going from strength to strength and I would like to paytribute to their success in expanding our current business and driving theCompany forward while effectively managing the set up of the Houston operation.The positive effects of management decisions and actions are clear as our growthand increase in revenue can testify. The management team was strengthened further by the appointment of Stephen Guseas Operations Manager in Bicester and Mark Telford as Technical Sales Manager tocover the Aberdeen and Scandinavian oil & gas, and valve markets. After asuccessful nine months as Financial Controller, Peter Davenport was appointed tothe Board of Hardide plc as Finance Director in March 2006. Over the next sixmonths additional appointments will be made to the management teams in the UKand US. As I outlined in our first annual report in January 2006, now that our UKfacility is fully operational we are re-establishing our research anddevelopment (R&D) activities. Over the last six months we have been focusing ona new variation of the Hardide product; a 'super-slippy' self-lubricatingwear-resistant coating. The laboratory results are promising and the R&Dprocess will continue over the next six months. This next generation ofproprietary Hardide coatings will ensure that the Company remains at theforefront of innovations in surface engineering technology. Hardide coated components are now being used routinely in hostile environmentsaround the world; from oil & gas exploration and production, power plants andchemical refineries to food manufacture, aerospace and cryogenics. The Companyhas a strong UK and international orderbook and a pipeline of majoropportunities that we are seeking to convert. The Company's revenue growth overthe next six months is anticipated to come from an increase in business fromexisting customers and new applications together with our moves to build on theaerospace sector breakthrough. Our declared commitment to our US operation isalso expected to generate new customers and revenues. Over the next six months, I believe we will deliver a steady pace of organicgrowth as we pursue our strategy with a focus on sectors and markets where wecan add greatest customer value. I am confident that our strategy and healthyfinancial position are strong foundations for building shareholder value. Jim Murray-SmithChief Executive Officer Hardide Plc Group Profit & Loss Account For the six months ended 31st March 2006 Six months ended 27th January to 27th January to 31st March 2006 4th April 2005 30th September 2005 (unaudited) (unaudited) £'000 £'000 £'000 Turnover 1,063 100 692Cost of Sales (410) (30) (283) Gross Profit 653 70 409 Administrative Expenses (789) (141) (864) Earnings before interest, tax, depreciation & (136) (71) (455)amortisation Depreciation & Amortisation (165) (17) (106) Operating Profit / (Loss) (301) (88) (561) Other Income 57 23 68 Profit / (Loss) on ordinary activities (244) (65) (493) Interest Receivable 19 4 19Interest Payable (13) (7) Profit / (Loss) on ordinary activities before (238) (61) (481)taxation Earnings / (Loss) per Share (0.17)p (0.05)p (0.37)p Hardide Plc Group Consolidated Balance Sheet 31st March 2006 4th April 2005 30th September 2005 (unaudited) (unaudited) £'000 £'000 £'000 Fixed Assets Tangible 1,050 1,032 1,100 Intangible (50) (86) (48) 1,000 946 1,052 Current Assets Stock 51 35 63 Trade Debtors 399 265 339 Other Debtors 183 66 51 Prepayments 145 59 70 Cash at bank & in hand 1,371 1,909 1,107 2,149 2,334 1,631 Creditors: Amounts falling due within one (285) (578) (312)year Net Current Assets 1,863 1,756 1,318 Creditors: Amounts falling due after one year (266) (73) (314) Net Assets 2,597 2,629 2,056 Capital & Reserves Called up Share Capital 1,341 1,275 1,275 Share Premium Reserve 1,975 1,415 1,261 Profit & Loss Account (717) (61) (480) Shareholders Funds 2,597 2,629 2,056 Hardide Plc Group Cash Flow Statement Six months ended 27th January to 27th January to 31st March 2006 4th April 2005 30th September 2005 (unaudited) (unaudited) £'000 £'000 £'000 Cash outflow from Operating Activities (364) (47) (851) Returns on investment and servicing of finance Interest element of finance lease rental payments (13) - (7) Interest Received 19 - 19 Taxation - - - Capital Expenditure and Financial Investment Payments to acquire tangible fixed assets (113) (48) (245) Acquisitions & Disposals Net cash transferred with subsidiary undertakings 454 456 Net Cash Inflow / (Outflow) before financing (471) 359 (628) Financing Issue of Shares 780 1,550 1,437 Capital element of finance lease rental payments (44) (20) New finance lease agreements 318 Increase / (Decrease) in cash 265 1,909 1,107 Reconciliation of Movement in Shareholders Funds 31st March 2006 (unaudited) £'000 Profit / (Loss) for the period (238) On issue of shares 780 Increase in Shareholders Funds 542 Opening Shareholders Funds 2,056 Closing Shareholders Funds 2,598 542 Reconciliation of Operating Loss to Net Cash Outflow from Operating Activities 31st March 2006 (unaudited) £'000 Operating Loss (244) Depreciation of Tangible Fixed Assets 163 (Increase) / Decrease in operating debtors and prepayments (267) (Increase) / Decrease in stock 12 Increase / (Decrease) in operating creditors and accruals (30) Amortisation of Goodwill 2 Cash Inflow / (Outflow) from Operating Activities (364) Proforma Profit & Loss Account Hardide Coatings Limited For the six months ended 31st March 2006 Six months ended Six months ended Year ending 31st March 2006 31st March 2005 30th September 2005 (unaudited) (unaudited) £'000 £'000 £'000 Turnover 1,063 496 1,089Cost of Sales (410) (205) (459) Gross Profit 653 291 630 Administrative Expenses (503) (512) (1,191) Earnings before interest, tax, depreciation & 150 (220) (561)amortisation Depreciation & Amortisation (165) (107) (236) Operating Profit / (Loss) (15) (327) (797) Other Income 57 46 91 Profit / (Loss) on ordinary activities 42 (281) (706) Interest Receivable 5 10 13Interest Payable (13) (2) (9) Profit / (Loss) on ordinary activities before 34 (273) (701)taxation This information is provided by RNS The company news service from the London Stock Exchange