Hardide plc (LON:HDD) Chief Executive Officer Philip Kirkham caught up with DirectorsTalk for an exclusive interview to discuss their positive start to 2022, meeting market expectations, strategic plans to grow the business into alternative energy markets and the outlook for the company.
Q1: Hardide have had a positive start in Q1 2022, demand is resurgent across all your sectors and it looks like you’re confident in meeting market expectations for full year ‘22. Phil, Can you just tell us more about how you’ve gone on?
A1: Last year, obviously, our customers were affected quite significantly by the pandemic and especially in the energy and aerospace market so last year was a pretty slow start, but it picked up considerably in the last few months of the year and we saw demand returning very strongly.
Orders received in the second half of the year were 52% higher than in the first half, with a lot of those coming towards the end of the year so a large proportion of these were for delivery in the first quarter of the new financial year, which we’re now in and that’s happening now. So, this recovery in demand really bodes well for the future and we’re now really seeing an improving trend across all the market sectors and a lot of development work has still happened during the year.
As a result of that, we received our first production order for coating of blades for power generation gas turbines from a major European manufacturer and this is a very important development. We believe this market has some great potential for us and it’s a market where we’re also working with EDF on the steam turbine side and we see the new patented coating that we launched two years ago, we see that is very important in this market and believe it will give us a really good competitive advantage.
Of course, the main event in 2020 was that we fully transitioned the premises from the old site at Wedgwood Road to the new premises and where we are now at Longland Road in Bicester. As part of that, we installed a large coating reactor and new larger processing equipment and these have actually been essential in enabling us to process this new work for turbine blades. So without this investment, these larger pieces of equipment, we wouldn’t have able to coat these parts or develop this market at all.
Q2: What can you tell us about the company’s strategic plans to grow the business in the alternative energy markets?
A2: Well, obviously we’re very aware of the global transition away from fossil fuels to alternative energy and we see this as a big opportunity. We’re already well embedded with a company in the solar cell industry, that produces raw materials that go into solar cells, and that that company is expanding its production capability significantly over the next two years, as they see an increase in demand. So, we will grow our business with them, on the back of their increased production.
More recently, we’ve got some products in nuclear power plants, we’ve been directly involved with an electric vehicle manufacturer on the battery side of that process, who’s got a development going on at the moment with our coating components in the battery. We’re also looking at geothermal opportunities and also some opportunities within the wind sector where we believe that the advantages of our coating can give the operators a significant benefit in maintenance and cost areas.
Q3: How do you view the outlook for Hardide?
A3: We’ve had a very positive start to the new financial year, in FY22, our first quarter is looking extremely strong, and the indications we’ve got from our customer base is that should continue.
We’ve got Airbus hopefully coming on stream very shortly once all the commercial negotiations are completed between Airbus and their tier-one supplier, which will then allow us to sign a supply contract with the tier-one supplier directly. We’ve got other Airbus components that are outside that agreement that are starting to come to us as well.
We’ve got more power generation turbine business that we expect to get over the next year and our traditional business for a major pump manufacturer in the United States. They are going very, very strongly and have been to the past year and they’re telling us that all those indications are that that should continue throughout this year as well, they’ve got very high demand.
So, all the markets we see are coming back, we’re getting good high volume business from them and we’re expecting FY22 to be a very positive year for us.