Hardide Plc (LON:HDD) Chief Executive Officer Philip Kirkham caught up with DirectorsTalk for an exclusive interview to discuss their interim results and being selected by Airbus to replace HCP on their A380 wing components.
Q1: First off, congratulations on your results released this morning, can you talk us through the highlights?
A1: We’re very pleased to report this morning that we’ve had a record sales revenue for a first H1 and that was £2.35 million which is a 9% increase over the same period last year.
An interesting, significant point is that more than half of this revenue actually came from customers that we’ve actually gained in the last 3 years which indicates our real strategic drive to diversify our customer base and our sector base. So, the result was a good result for us.
Also, interestingly, our sales in North America customer increased by 32% compared with the same period last year and demand is very strong both from new and existing customers in the UK and North America.
One little bump in the road, whilst the revenue was up, gross profit fell back compared with last year, this was really affected by a product sales mix and phasing of demand from some high volume product line. We see that as a temporary issue and that’ should start coming back and is starting to come back in H2.
Q2: You mentioned that you gained new high-value customers over the last three years, what impact have they had on the business?
A2: We’re really pleased that we’ve gained these new high-value customers and obviously, as I say, they’re playing a key role in achieving our objective of diversifying our customer base and our revenue base.
However, demand from a number of them is still heavily project-based which means we see large individual discreet orders on quite unpredictable timescales which limits our visibility as to when revenue will actually be achieved.
So, this increases our challenge of predicting forthcoming revenue from these customers but on a long term, these are very significant, established customers that will be there for a long time for us and will generate some good revenue over the medium and long term.
Q3: Now, you reported encouraging progress being made in the aerospace sector, how is this side of the business progressing?
A3: Well, we’re absolutely delighted today to announce a separate RNS that our Hardide-A coating has been selected by Airbus for replacement of hard chrome plating on the Airbus A380 compression flap pads. This is the first Hardide coating component to be selected and used on an Airbus aircraft.
It’s just important to note, I think, that earlier this year Airbus announced it would be ceasing production of the A380 in 2021 but the fact that our coated pads are going to be used as a replacement for hard chrome plating on its current fleet, and they’ve got around 235 aircraft currently flying, it means that we’ll on this programme for a considerable amount of time.
Positive progress is also being made with Airbus to replace hard chrome on other components and we’ve currently got tests ongoing for both the A330 and the A320 series of aircraft but Airbus isn’t the only customer we’re making good progress with.
We’re also making good progress with Leonardo Helicopters who have now started the process to get us approved as a supplier for flying parts and we’re currently just approved as a supplier for test component.
Also, a US customer who has also indicated selection of our coatings of certain of their components and once we get that formally approved then we’ll also be announcing that separately.
Q4: I think you’ve already indicated that the pipeline is looking good but how is the rest of the year looking for Hardide and do you remain confident for the 6 months ahead?
A4: Indications are good but demand will remain strong and we’re very confident in the medium and long term growth, especially now we’ve made the first steps with Airbus and US aerospace customers. Short term can be more challenging as we say, project-based customers, the nature of their ordering patterns makes forecasting in the short term quite exciting.