Home » Reports » Hardman & Co » Haydale Graphene Industries Cost savings continue, revenue growth encouraging
Hardman & Co

Haydale Graphene Industries Cost savings continue, revenue growth encouraging

Haydale Graphene Industries PLC (LON:HAYD) commercial traction is improving, medium-term financial issues have now been addressed, and the refocusing and re-orientating of the business with a major cost-saving programme is progressing well. The long-term risk/reward balance remains favourable, we believe. The markets, though, await clear evidence that the new management team is delivering on its revenue objectives.

  • Strategic developments: The core operational objective remains the focus on SiC and the related cutting tools, functionalised inks and graphene composites. A global cross-site/cross-commodity sales team, each with specific product/market expertise, is now in place, with low regulated markets as key targets.
  • Financial developments: 2018/19 interims revealed a 62% gross margin and excellent progress on cost-cutting initiatives. New management’s key focus has been the reduction of central costs, e.g. marketing and travel, etc, and this is clearly visible. Management expects a reduced operating loss on a full-year basis.
  • Financial position: Haydale’s cash position was £2.7m at December 2019. Working capital management is well controlled, despite the rise in US inventory levels. Group management is assessing future debt funding options, but the group should remain in a positive cash position over the medium term.
  • Investment summary: Haydale Graphene Industries remains well positioned competitively, with a proprietary nanomaterial functionalisation plasma process. Commercial traction has now recovered, and the group has been financially de-risked. While the risk/reward balance remains favourable on a long-term basis, in our view, the market awaits clear evidence that the new management team is fully delivering on its revenue objectives.

DOWNLOAD THE FULL REPORT

Join us on our new LinkedIn page

Follow us on LinkedIn