# Haydale Graphene Industries Cost savings evident, revenue growth to come

- Link: https://www.directorstalkinterviews.com/haydale-graphene-industries-cost-savings-evident-revenue-growth-to-come/412796345
- Published: 2019-10-28T07:53:49+00:00
- Author: Amilia Stone

The re-focusing and re-orientating of the business with a major cost-saving programme
are progressing well. Commercial developments are also progressing well, and medium-
term financial issues have now been addressed. The long-term risk/reward balance
remains favourable. The markets, though, await clear evidence that the new management
team is delivering on its revenue objectives.

 * **Strategic developments:** A global cross-site/cross-commodity sales team (eachwith
   specific product/market expertise) is now in place, with low regulatedmarkets
   as key targets. This should enhance top-line growth. Furthermore, Haydale Graphene
   Industries has just received a $0.7m order for ceramic blanks from a large UScutting
   tool manufacturer, providing additional growth and a commitment in principle 
   from a Japanese cutting tool manufacturer with a value of $0.6m.
 * **Financial developments:** 2018/19 results revealed a 55% gross margin andexcellent
   progress on cost-cutting initiatives. New management’s key focus has been the
   reduction of central costs, e.g. marketing and travel, etc. This has already 
   led to a reduction in its annualised SG&A costs of more than £1.6m, with more
   expected in the coming years.
 * **Financial position:** Net cash was £3.4m at the 2018/19 year-end. The group
   hadan order book at 10/09/19 of £3.55m, to be delivered over the coming years.
   Capital expenditure will be lower in 2019/20, and working capital management 
   is well controlled. The group should remain in a positive cash position over 
   the medium term.
 * **Investment summary:** Haydale Graphene Industries remains well positioned competitively,
   with aproprietary and recently-enhanced nanomaterial functionalisation plasma
   process. Commercial traction is good, with a healthy order book, and the group
   has been financially de-risked. While the risk/reward balance remains favourable
   on a long-term basis, the market awaits clear evidence that the new management
   team is delivering on its revenue objectives.

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