# Hardide Revenues 25% higher than previous year

- Link: https://www.directorstalkinterviews.com/hardide-revenues-25-higher-than-previous-year/412810539
- Published: 2020-03-31T07:15:24+01:00
- Author: Giles Arbor

**Hardide plc** (LON:HDD), the developer and provider of advanced surface coating
technology, today provided 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 £0.4m 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 Hardide 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.

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