Hardide PLC TRADING UPDATE AND THE IMPACT OF COVID-19 (1276I)
March 31 2020 - 2:00AM
UK Regulatory
TIDMHDD
RNS Number : 1276I
Hardide PLC
31 March 2020
31 March 2020
Hardide plc
("Hardide" or "the Group" or "the Company")
TRADING UPDATE AND THE IMPACT OF COVID-19
Hardide plc (AIM: HDD), the developer and provider of advanced
surface coating technology, provides the following update on
trading and the foreseeable impact of COVID-19.
Revenue in the six months to 31 March 2020 has been more than 25
per cent ahead of the same period last year. The Group's facilities
in Bicester, Oxfordshire, UK and Martinsville, Virginia, USA are
continuing to coat product as normal at present. Demand has been
strong from customers in the oil and gas, flow control and
precision engineering sectors throughout the first half of this
financial year and the Board has not yet seen any significant
reduction going into the second half.
Notwithstanding this, the Board is mindful that order intake in
the second half of this financial year might well be affected as
customers, especially those from the oil and gas sector, could
defer investment decisions or increasing governmental restrictions
may have an impact on customer production levels. The Board will
continue to monitor the situation and keep an open dialogue with
customers over the coming weeks.
The aircraft industry in general is being seriously affected by
the current situation but this is not having an effect on the
developments and discussions underway between the Company and
Airbus and their Tier 1 suppliers on converting components away
from hard chrome plating to our Hardide-A coating. Engineering work
is currently being done by Airbus to allow for our coating on a
range of components and a supply agreement with a major Tier 1
supplier is almost complete. The programme of work agreed with
Airbus to gain approval for the new site in Bicester continues.
Other development work with Leonardo Helicopters and other
aerospace companies, both in the UK and the US, is also continuing;
so far without disruption.
The internal fit-out of the new Bicester facility has been
completed and the transition to the new site currently remains on
plan for completion during September 2020, although the current
situation with COVID-19 may cause some delay.
The Group has a robust cash position following the fundraise in
January 2020 and is pleased to have entered recently into its first
asset finance agreement with Hitachi Capital (guaranteed by the
British Business Bank) over a sum of GBP0.4m secured against a new
coating reactor at its facility in Bicester. Nonetheless, the
Group's management is reviewing discretionary spending and
implementing cost savings where appropriate.
The Board continues to observe all new government restrictions
and will adhere to all those that apply to its businesses both in
the UK and the US. A core customer informs us that it meets the US
Department of Homeland Security's criteria for an Essential
Critical Infrastructure Company and, as a key part of its supply
chain, the Group has been asked to ensure the facilities in the UK
and USA stay open for production, unless mandated by law to
close.
The Board also wishes to provide further details with regard to
existing incentivisation arrangements for directors and senior
employees, ahead of the detailed remuneration report to be provided
in its next annual report. The Company has a long-term policy of
granting share options with appropriate performance and tenure
conditions as a core component of the Company's executive
remuneration. The Company does not however have a formal long-term
incentive plan or share option schemes. The Company most recently
granted options to senior employees (including directors) in
December 2019 which had a grant and an exercise price of 62 pence
per share. Performance conditions attaching to the vesting of these
options relate to share price appreciation in each of the two years
to September 2022 (25% of the options to an increase of 21% from
grant price for a 30 day consecutive period before 30 September
2021, and 25% to an increase of 33% on same basis before 30
September 2022), and 50% to achieving sales growth and gross profit
margin targets over the years ended 30 September 2021 and 2022
respectively. The share options can vest in part should only
certain performance targets be met and are subject to ongoing
employment at the relevant vesting date. They expire if not
exercised before 2029.
The Company's annual report and accounts for the year ended 30
September 2019 is available on the Company's website at
www.hardide.com. This report includes disclosures with regard to
the Company's remuneration policies. This was posted to
shareholders, together with the notice of the AGM held on 17
February 2020, on 24 January2020.
Enquiries:
Hardide plc Tel: +44 (0) 1869
Robert Goddard, Non-Executive Chairman 353830
Philip Kirkham, CEO
Jackie Robinson, Communications Manager
IFC Advisory Tel: +44 (0) 20 3934
Graham Herring /Tim Metcalfe/ Florence 6630
Chandler
finnCap - Nominated Adviser and Joint Broker Tel: +44 (0) 20 7220
Henrik Persson / Matthew Radley 0500
Allenby Capital- Joint Broker Tel: +44 (0) 20 3328
Jeremy Porter/James Hornigold 5656
Notes to editors:
Hardide develops, manufactures and applies advanced technology
tungsten carbide/tungsten metal matrix coatings to a wide range of
engineering components. Its patented technology is unique in
combining, in one material, a mix of toughness and resistance to
abrasion, erosion and corrosion; together with the ability to coat
accurately interior surfaces and complex geometries. The material
is proven to offer dramatic improvements in component life,
particularly when applied to components that operate in very
aggressive environments. This results in cost savings through
reduced downtime and increased operational efficiency. Customers
include leading companies operating in oil and gas exploration and
production, valve and pump manufacturing, precision engineering and
aerospace industries.
www.hardide.com
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contact rns@lseg.com or visit www.rns.com.
END
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