Hardide plc (LON:HDD), the developer and provider of advanced surface coating technology, announces its preliminary annual results for the year ended 30 September 2023, which remain subject to audit sign off.
FY23 Financial Highlights
| FY23 | FY22 | Change | |
| Revenue (£m) | 5.5 | 5.0 | +10% |
| Gross margin % | 47.5% | 37.5% | +10 ppts |
| EBITDA (£m) | (0.1) | (0.9) | +£0.8m |
| Loss before tax (£m) | (1.2) | (2.3) | +£1.1m |
| Business cash flow before financing (£m) | 0.1 | (1.2) | +£1.3m |
| Cash balance at 30 September (£m) | 0.7 | 0.7 | – |
· Revenue increased by 10% to a record £5.5m due to strong oil & gas sector demand, new aerospace work increasing in Q4 and successful recovery of cost inflation in selling prices
· Gross margins increased by 10 percentage points year on year to 47.5% benefiting from better capacity utilisation and operational gearing
· Close to EBITDA break-even performance delivered (FY22: £0.9m loss) reflecting higher revenues at better margins together with good overhead control
· Business cash flow positive performance due to improved EBITDA, strong working capital control and low capital expenditure requirements as the business is well invested
FY23 Business and Commercial Highlights
· Significant ongoing growth in aerospace business
· Developing new industrial / engineering customers following recent trials
· Strong core oil & gas business with ongoing development potential
· Early success and promising future for coating turbine blades in the power generation sector
· Strategic potential in green energy, hydrogen production and hydrogen storage applications
· Patentable technical developments ongoing to enhance Hardide coatings and broaden their end use applications, supported by grant funding
· Strong cost, cash flow and inflation management disciplines demonstrated, with an EBITDA and cash flow benefit of c.£0.7m realised during FY23
· Commercial relationships developing with global coatings companies to broaden market reach
FY24 developments
· A slower than expected start to the year with a number of OEM customers de-stocking. This has more than offset ongoing growth in aerospace demand. The cost base has been re-aligned in mitigation
· The Board now anticipates FY24 revenue to be broadly in line with FY23 and, given cost mitigations, to be EBITDA positive with trading expected to gather momentum as the year progresses
· A new interim CEO, Steve Paul, formerly of Praxair Surface Technologies, joins Hardide on 12 February
· Cash headroom has been depleted by slower trading year to date, and additional equity and debt funding is being sought from existing shareholders and other investors to satisfy short term cash constraints by early March and to support Hardide’s growth strategy
Andrew Magson, Non-Executive Chair of Hardide plc, commented:
“We are pleased with the progress made in FY23, particularly the significant improvements to the EBITDA and cash flow performance of the business. This was driven by further growth, effective management of input cost inflation, and strong management of costs and working capital.
Trading conditions so far in the current financial year have been unexpectedly challenging and we have taken all reasonable internal measures to mitigate the impact without damaging the core of our business. Having managed the business to cash break-even in FY23, we regret now being in the position of asking investors for their support. The funding we are seeking will enable us to execute our strategy of accelerating revenue growth, bolstered and underpinned by the appointment of Steve Paul as Interim CEO today, and to unlock the significant value potential provided by our unique coatings technology.”
