AIM-quoted advanced surface coatings provider Hardide (LON: HDD) is growing its revenues and efficiency improvements mean that breakeven level has been reduced. There is plenty of spare capacity available as demand from existing and new product areas increases.
Oil and gas remains an important sector for Hardide and that is where the growth come from in the first half. It offset delays in turbine blade coating work and reduced income from industrials.
Aerospace will be increasingly important for Hardide as it gains approvals to supply more coated parts to more of Airbus’ aeroplanes. There are other new markets, such as electric vehicle battery and solar components.
In the six months to March 2023, revenues were 9% higher at £2.9m. There was a £100,000 property gain, which helped the pre-tax loss fall from £800,000 to £600,000. Net debt was £300,000 at the end of March 2023.
There will be £500,000 of cost savings and efficiency improvements achieved by the end of the financial year. That means that breakeven revenues should be between £7.5m and £8m.
Capacity utilisation is at around 60%. A full year loss of £1.3m, down from z£3.2m, is expected with a further decline to £500,000 next year. Winning business in new sectors could speed up the journey to profitability.
The share price was unchanged at 13.5p. The operational gearing means that when the business passes breakeven the profit should grow rapidly.
