Hardide Plc Q&A with CEO Philip Kirkham: Interim Results (LON:HDD)

Hardide Plc

Hardide Plc (LON:HDD) Chief Executive Officer Philip Kirkham caught up with DirectorsTalk for an exclusive interview to discuss their interim results

 

Q1: Now Phil, Hardide’s half year results just released, they show a significant improved performance compared with last year. Can you give us some more details around this and why?

A1: Our half year sales, for the first half of this year, we’re 59% higher than they were in the same period last year and 27% higher than they were in the second half of 2016. We’ve definitely seen a recovery in demand from our traditional oil and gas customers, particularly in the directional drilling sector but also on production parts as well so that’s largely driven the increase in sales in the first half compared to previous.

 

Q2: The Airbus supplier approval was obviously a major event in the first half, can you tell us what’s happened since this was received and how close are to getting production orders from Airbus?

A2: The Airbus supplier approval was the most significant event really that happened in the first half and that now means that Hardide are fully approved to coat and supply flying parts that can actually go onto aircraft.

So, we’ve now got a number of discussions ongoing with various aircraft programmes, particularly the A320, the A330, A380 and the military transport aircraft, the A400M, of those obviously the single A320 family, which comprises of the A319, A320 and A321, is particularly interesting to us because of the high aircraft production rates of about 60 aircrafts a month. The typical parts that we are being considered for in discussions about are used in the wing structure, for components on the flaps, boilers, speed brakes etc. as well as a number of parts on the landing gear structure.

We’re also talking to a much higher number of component suppliers including in North America, particularly now that we have a coatings facility based in North America, and maintenance repair and overall organisations have shown considerable interest. So, these component suppliers are making components that actually go on to the Airbus aircraft but they have their own design authority to approve the coatings used on there. So, the fact that we’re now approved on the Airbus aircraft itself, it’s making it a lot easier for these component manufacturers to do some business with us.

So, we’re currently working our way, with Airbus, through their procurement system, as you can expect with a large organisation like that, it’s difficult and it’s slow, a little more patience is needed there. Hardide worked very hard for 9 years to get to the position we are at the moment so it’ll take a little bit more time before we actually start getting into production orders but I’m sure that’ll come in the not too distant future. We’ve also, on the aerospace market, been approved further components on the British aerospace typhoon fighter jet and we’re receiving further orders from there.

Just as a general comment, we are working through the Nadcap accreditation, which is the global approval run by the aircraft primes all around the world, all the aircraft manufacturers as the major quality accreditation. We’re working our way through that and we anticipate getting approval for that certainly by the end of this financial year, not before.

 

Q3: The oil and gas market is still significant to Hardide, can you tell us what current developments are happening there?

A3: It is an amazing market for us and we still have some really good new opportunities particularly in North America and that’s, as I mentioned earlier, because we have a coating facility there that’s helping that considerably. We’ve got a number of interesting developments particularly on the on-shore drilling side and if you look at the Baker Hughes rig count, the on-shore drilling, drilling on production rigs, is 116% higher than in was in 2016 so that’s indicative of the increase in activity in that market. We’ve got new parts that have been field tested and are now in production and we’re now in negotiations for potential volume orders for those components as well as in Europe, we’ve been approved for new sub-sea flow control components from a major oil fuel service company and we have only just started getting production orders in the second half of this year. So, yes, oil and gas still very important but still lots of opportunities for us in oil and gas as well.

 

Hardide Plc (LON:HDD) is a United Kingdom-based company, which is a provider of tungsten carbide coatings for critical metal components in abrasive, erosive, corrosive and chemically aggressive environments. The Company’s segments include UK operation, US operation and Corporate.

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