Hardide Regulatory News (HDD)

31 Jul 2006 10:48

Hardide PLC31 July 2006 Press Release 31 July 2006 Hardide plc ("Hardide" or the "Company") Trading Update Hardide plc (AIM:HDD), the provider of unique surface engineering technology,announces the following trading update. The current financial year ended 30 September 2006 is likely to produce resultsbelow current market expectations. The Company is, however, expecting to reportturnover significantly in excess of last year. The expected shortage in revenue and increase in loss are attributable to twofactors: • One of Hardide's major customers has recently been reducing inventory and this has resulted in lower than expected sales. Nonetheless, Hardide remains the specified supplier to this customer and accordingly the Company expects orders to resume previous levels once the customer's inventory has stabilised in the near future. • Hardide has experienced a longer conversion time for customers expressing intent to purchase the Company's product. This slow-down is mainly attributed to high productivity at Hardide's major customers and has subsequently led to a slow-down in field-testing. Importantly, field-testing is still yielding the historic impressive results with a majority of customers opting to use Hardide's technology, albeit taking more time to fully incorporate Hardide's coating. Progress at Hardide's new manufacturing facility in Houston, Texas, isprogressing ahead of expectations with the facility on course to be open forbusiness on 1 September 2006, a month earlier than previously estimated. TheCompany is extremely optimistic about the prospects for this facility and talksare progressing with a number of potential significant customers. Owing to anticipated high demand for its product from both new and existingcustomers, the Company has taken the opportunity to enlarge the premises inBicester, Oxford, to accommodate post finishing and streamlining facilities. Toaccommodate these new facilities, Hardide is leasing an additional space of4,000 sq. ft. Hardide's recent exhibition at the Farnborough Air Show has produced severalhigh level enquiries from large multinational corporations and has enhanced theCompany's reputation for the provision of leading surface engineeringtechnologies. Although in early stages, the Company is confident that thisinterest will lead to future orders. Commenting on the announcement, Jim Murray-Smith, Chief Executive of Hardide,said: "Although it is frustrating to miss our targets for the year ended 31September 2006, I am nonetheless encouraged by current developments at Hardide.It should be noted that any shortfall in revenues is attributable to minordelays in the field-testing of our products by certain customers and thedecision by one of our major customers to not hold inventory at historic levels.Neither of these factors will affect Hardide's profitably on an on-going basisand the Company's future still looks very promising. "I am pleased to report that the manufacturing facility in Houston isprogressing ahead of schedule and recent discussion with potential customersfurther confirms our belief that demand for our product in this region will beparticularly strong. The Company also received a good reception at theFarnborough air show and I am confident that this not only boosted our presencewithin the industry but will also ultimately lead to further orders from theaerospace sector. "I look forward to updating shareholders on progress in our preliminary resultsfor the year to 30 September 2006 in December." - Ends - For further information:Hardide plcJim Murray Smith, Chief Executive Tel: +44 (0) 1869 353 830jmurray-smith@hardide.com www.hardide.com Daniel Stewart & Company plcPaul Shackleton, Corporate Finance Tel: +44 (0) 207 776 6550 www.danielstewart.co.uk Media enquiries:AbchurchChris Lane / Laura Riascos de Castro Tel: +44 (0) 20 7398 7700chris.lane@abchurch-group.com www.abchurch-group.com This information is provided by RNS The company news service from the London Stock Exchange