The information contained within
this announcement is deemed by Hardide to constitute inside
information pursuant to Article 7 of EU Regulation 596/2014 as it
forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 as amended.
8 February 2024
Hardide plc
("Hardide", the "Group" or the "Company")
Unaudited preliminary FY23
annual results and FY24 trading update
Hardide plc (AIM: 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."
Further announcements will be made
as appropriate.
Enquiries:
|
|
Hardide plc
Andrew Magson, Non-Executive
Chair
Jackie Heddle, Communications
Manager
|
Tel: +44
(0) 1869 353 830
|
IFC
Advisory
Graham Herring
Tim Metcalfe
Florence Chandler
|
Tel: +44
(0) 20 3934 6630
|
Cavendish Capital Markets Ltd - Nominated Adviser and Joint
Broker
Henrik Persson/ Abigail
Kelly
|
Tel: +44
(0) 2072 200 500
|
Allenby Capital - Joint Broker
Tony Quirke / Joscelin Pinnington -
Sales and Corporate Broking
Jeremy Porter/ Dan Dearden-Williams
- Corporate Finance
|
Tel: +44
(0) 20 3328 5656
|
Notes to editors:
www.hardide.com
Hardide develops, manufactures and
applies advanced technology tungsten carbide/tungsten metal matrix
coatings to a wide range of engineering components. Its patented
technology is unique in combining in one material, a mix of
toughness and resistance to abrasion, erosion and corrosion;
together with the ability to coat accurately interior surfaces and
complex geometries. The material is proven to offer dramatic
improvements in component life, particularly when applied to
components that operate in very aggressive environments. This
results in cost savings through reduced downtime and increased
operational efficiency. Customers include leading companies
operating in the energy sectors, valve and pump manufacturing,
industrial gas turbine, precision engineering and aerospace
industries.
CHAIR'S
STATEMENT
Overview
I am pleased to report another year
of good progress for Hardide, with revenues moving ahead by 10% to
£5.5m and the delivery of a close to EBITDA break-even profit
performance.
The Board is focused on driving an
acceleration in revenue growth, as adoption of Hardide's unique
coating technology gains further traction across a diverse range of
end use market applications.
Current Trading and
Financing
Hardide has experienced a
slower than expected start to the current
financial year with a number of major OEM customers
de-stocking. This de-stocking effect has
more than offset the positive ongoing growth in aerospace demand.
The cost base has been re-aligned in mitigation, and selling prices
were increased in January 2024. Group revenues in the four months
to 31 January 2024 were £1.3m compared with £1.9m in the equivalent
prior year period.
The Board expects that this will
have the effect that revenues for the full year to September 2024
will be broadly in line with those of the year to September 2023,
with the benefits of a disciplined approach to costs coming through
such that we anticipate being EBITDA positive for the
year.
In recent weeks the Group's cash
balances have fluctuated in a range between £0.2m and £0.5m, with
the impact of a particularly weak January sales month still to flow
through to the cash position, which is expected to erode our
remaining cash headroom. This, together with a review of our
short-term revenue expectations and associated sensitivities, has
led us to conclude that £1m of additional funding
is required before early March. We are therefore in discussions
with existing shareholders and other investors to raise new equity.
We are also actively seeking further debt finance. We have taken
external specialist advice and will continue to do so with a view
to ensuring that all measures are taken to raise the requisite
capital and/or preserve shareholder value.
These preliminary financial
statements have been prepared on the basis that the Group remains a
going concern, however there is material uncertainty relating to
the level of new funds raised, and the timing and extent of the
expected recovery in sales as OEM ordering patterns normalise and
Hardide wins anticipated new work.
Strategy
The Board is executing a two-stage
strategy:
1. Focus on becoming
profitable and cash generative as soon as possible. This will be
driven mainly by increased sales to existing and new customers,
utilising proven coating technology and existing production
capacity, thereby benefiting from Hardide's strong operational
gearing.
We made good progress in FY23 in
growing revenues and recovering input cost inflation, whilst
keeping tight control of costs to deliver a close to EBITDA
break-even profit performance.
2. Identifying and
taking opportunities to drive significant value for shareholders
and other stakeholders over the medium to longer term through
further development and commercialisation of the Group's unique,
high performance coatings technology, including co-operation with
other coatings companies.
We entered into commercial
agreements with two global coatings companies during the last year
enabling all parties involved to benefit from the ability to offer
Hardide's coatings to a broader international customer
base.
Business Development
The Board is focused on the
realisation of numerous business development opportunities
available in the short to medium term across various end market
sectors. In addition, our research and development activities (much
of which are supported by grant funding) are intended to
significantly enhance Hardide's coatings technology and its
applications, and much of our focus here is on green energy and in
assisting hydrogen generation and storage. Further details of these
opportunities are given in the Chief Executive's Report.
People and Board
On behalf of the Board I'd like to
put on record our thanks to all our loyal and committed employees
for their hard work and achievements, not least driving the
continued growth of the business to record levels in FY23 in line
with our strategic objectives against a challenging market
backdrop.
We are pleased to welcome Steve Paul
as Interim Chief Executive Officer, effective from 12 February. He
will succeed Phil Kirkham who announced his intention to step down
last November. Steve, formerly of Praxair Surface Technologies,
will bring a wealth of experience in general management, commercial
development and performance improvement. We look forward to working
with Steve and to his contribution both to the business and the
Board.
The Board would like to thank Phil
once again for the immense contribution he has made to the
development of Hardide over the last decade, including
significantly broadening the customer base and leading the
establishment of our two modern and well invested production
facilities, all of which provide us with an excellent platform for
future growth.
We also welcomed Matt Hamblin to the
Board in November. Matt is the ex-CEO of Keronite, a coatings
company with many similarities to Hardide, where he led its growth
into profitability and then its successful sale to a large global
organisation last year. Matt's insights have already been highly
valuable as we evolve and refine our growth strategy. These Board
changes provide the opportunity to evolve the leadership and
culture of the business to become more sales focused and
commercially driven, and better aligned with the Board's
determination to drive an acceleration in revenue
growth.
Outlook
Whilst the global economic situation
remains uncertain and this has impacted trading and our financial
position in the first part of the new financial year, Hardide is
still a relatively early life cycle business benefiting from unique
and potentially disruptive technology. This technology is steadily
gaining market acceptance and market share, enabling the underlying
business to continue to grow.
There are numerous business
development opportunities being pursued, detailed in the Chief
Executive Officer's Report. We are focused on bringing these to
fruition, with sales to the aerospace sector in particular growing
significantly in the current financial year.
The Board is taking all steps
necessary and possible to raise the requisite financing required
such that the Company can deliver on its potential to generate
significant value for shareholders and all stakeholders over the
medium to longer term.
Andrew Magson
Non-Executive Chair
7 February 2024
CHIEF EXECUTIVE OFFICER'S
REPORT
Overview
Hardide generated record revenues
for the year of £5.5m, an increase of 10% from FY22. Revenue growth
was led by a 21% increase from the energy sector, particularly from
oil and gas customers. However, this increase was tempered by the
absence during the year of any repeat orders for the coating of gas
turbine blades and vanes. Volume aerospace orders for Airbus
components commenced in the final quarter of the year with a 100%
increase in sales from this sector for the year to become 7% of
total revenues. Price increases were implemented across the
customer base during the year to recover cost inflation,
particularly raw materials, energy and people costs.
The combination of price increases,
revenue growth and cost reductions led to a significant improvement
in gross margins, which rose by ten percentage points to 47.5% from
37.5% in the prior year. This enabled us to deliver a close to
break-even EBITDA performance, compared with the prior year
equivalent of a £0.9m EBITDA loss.
Operational Overview
Customers and
Markets
The mix of revenue from our main
market segments during the year was:
· Energy: 63% (including oil & gas and power
generation)
· Industrial: 30%
· Aerospace: 7%
Energy
Sales to energy customers increased
by 21% to £3.4m during FY23, including a 48% increase in sales to
oil & gas customers assisted by sales of coated mesh sand
screens. This was offset by a reduction of £0.5m in power
generation sales compared to FY22, as previously expected orders
for the coating of gas turbine blades were delayed due to
engineering modifications of the turbine.
Further progress has been made in
diversifying the oil & gas customer base with sales spread
across a broadening number of customers and with not one dominating
this segment's revenue. Towards the end of FY23, the Group started
to experience some softening in demand from oil and gas customers,
and this has impacted more significantly in the first few months of
FY24. We believe this reflects reassessment of inventory levels by
customers as global supply chains normalise post the COVID
pandemic; a reduction in the number of active US land drilling
rigs, primarily due to removal of local tax reliefs; and the full
cessation of supplies to Russia to comply with US and international
sanctions.
The large oil service companies
continue to talk about the industry being at the start of a
long-term 'up cycle' for oil and gas exploration and production.
With the oil price climbing recently on the back of OPEC+
production cuts and international events, the medium-term future
looks positive for supplying to this sector.
Alternative Energy
It is a strategic objective for the
Group to increase the proportion of revenue generated from the
alternative energy sector. Promising progress with development
projects is being made, particularly in hydrogen
applications.
Following the initial testing of
several Hardide coating variants at Cranfield University for a
process for the manufacture of 'green' hydrogen, the Group was
successful in being awarded an Innovate UK grant to progress
further this work. This project commenced in November 2023 and is
to be completed within 17 months. The initial test results and
further details are confidential to maintain potential
patentability of the application.
In another hydrogen application, an
independent laboratory is currently testing the permeability of the
Hardide coating to provide quantitative data on how good a barrier
the coating is in preventing hydrogen from diffusing into metal
components and causing cracks. Subject to positive results,
this would open up a large range of opportunities for Hardide
coatings in hydrogen storage and distribution
applications.
Power Generation
The expected production orders for
the coating of gas turbine compressor blades from Ansaldo Energia
in Italy were not received in the financial year as engineering
modifications are in progress on the turbine itself. In parallel,
the first two turbines containing Hardide coated blades are in the
final stages of commissioning and the performance data of these
blades is being gathered. This data will undoubtedly be a factor in
proving the benefit of the Hardide coating and in gaining future
business. Testing is also underway with this customer on new
applications/materials for a different turbine.
The work with EDF Energy on use of
the coating on steam turbine blades to prevent water droplet
erosion has not progressed during the year due to other priorities
within the EDF engineering team. It is hoped that this work will be
restarted during the coming 12 months. Extensive technical work and
testing has been done by another global steam and gas turbine
manufacturer with positive results. Discussions are now underway
regarding potential applications.
Currently, the Group is working on
developments and trials with other global steam and gas power
generation turbine manufacturers, both in the UK and
overseas.
Industrial
Revenues decreased in this sector by
15% from FY22. This was due to 22% lower sales to our major
industrial pump customer in North America where inventory levels
are continuing to be re-aligned, following high demand during and
immediately after the COVID pandemic period. However, there was an
increase in revenue from the airport X-ray scanner manufacturer as
their production increased. In addition, developments and trials
are still underway with the large US-based EV manufacturer on
components used in the vehicle battery production process. Trials
and testing are also ongoing on new battery technology and fuel
cell applications with a major organisation in the Far
East.
Aerospace
Aerospace sales doubled during FY23
to 7% of total Group revenue, with regular volume demand commencing
in the last quarter of the year from Gardner Aerospace to coat
components for the Airbus A320/A321 aircraft. This level of demand
is based on Airbus' current production rate of c.50 A320/A321 being
produced per month. Airbus' plan is to gradually increase this rate
to 65 aircraft per month by end 2024 and to 75 by 2026 indicating
that demand on the Group will also increase. Additionally, orders
were received from other Tier 1 companies for the lower volume
A330, A380 and A400M applications. Airbus and their Tier 1
suppliers continue to gain confidence in the Group to provide a
quality coating together with excellent levels of service, and as a
result there are further parts currently in development and
testing.
Orders continue to be received for
the coating of BAE Eurofighter Typhoon components. In addition, an
increase in demand for parts for Lockheed Martin's F35 Lightning II
fighter was seen in FY23. Technical trials are now underway with a
major civil and military helicopter manufacturer in the US.
We continue to work with several other OEMs and maintenance, repair
and overhaul ("MRO") companies for applications including landing
gear, door mechanisms and peripheral engine components.
During the year the Group received
full supplier approval from Leonardo Helicopters ("Leonardo") to
coat flying parts. Production orders are for components used in
helicopter gearbox transmission systems and are part of an existing
engine upgrade. The Hardide coating will reduce 'in-service' costs
and extend component life. Leonardo is one of the UK's leading
aerospace companies and one of the biggest suppliers of defence and
security equipment to the UK Ministry of Defence. This approval is
expected to open other opportunities within the wider Leonardo
Group and the broader helicopter market.
Technical discussions on replacing
chrome plating on components are also underway with another major
aircraft manufacturer based in the US.
Hardide coatings are being used
increasingly as a substitute for hard chrome plating ("HCP") and
thermal spray coatings. The EU and UK Reach regulations currently
have an end date of April 2024 for the use of the toxic hexavalent
chromium chemicals used in the production of HCP. As this date
rapidly approaches many companies are turning to Hardide coatings
as a replacement. Thermal spray coatings are less corrosion
resistant and more prone to cracking under deformation than are
Hardide coatings.
Health & Safety
I am pleased to report that there
were zero lost time incidents across the Group during the year.
Regular audits and inspections are performed by external bodies at
both sites and continuous improvements are being made following
these.
Accreditations and Research &
Development
Hardide's UK site is accredited to
Nadcap Gold Merit status, the highest accreditation available for
commitment to continual improvement in aerospace quality. Both the
UK and the US sites are accredited to aerospace quality standard
AS9100 RevD and to ISO9001. The UK site is certified to
environmental standard ISO14001, while the US site complies with
all local, state and federal environmental standards.
Fundamental experimental work on the
development of a new coating variant with additional properties
that would open new markets for Hardide has been completed.
Preliminary assessment has shown this coating could be patentable.
Further development work will be necessary to scale-up and
characterise the coating and the Group is continuing to look to
secure grant funding for this.
Intellectual Property
Our most recent patent covers the
enhanced Hardide coating with improved mechanical properties and
its new applications, including turbine blades and vanes. This had
been previously granted in the UK and this year we received new
grants of the patent in the USA, China, India and South
Korea. Registration of the equivalent patent is progressing
in other leading industrial countries.
Business Development
We are focused on realising a number
of shorter-term business development opportunities to grow revenues
to a level where the business becomes cash positive and fully
profitable for the first time.
Hardide is a well invested business
with operational capacity for sales of around £10-11 million a
year, approximately double FY23's revenues. With this spare
capacity available and high operational gearing such that a high
proportion of incremental revenues convert into profit and cash, we
estimate that Hardide will become fully cash generative at revenues
of c.£6.2m and fully profitable / earnings per share positive at
revenues of c.£7.5m.
The principal shorter-term business
development opportunities being progressed are:
· Additional Airbus parts
· High
volume consumable components for thermal spray equipment
· Steam
and gas turbine blades and vanes
· Couplers for land-based oil production pumps
Technical and commercial
collaboration is well underway with various international coating
companies who have complementary ranges of coatings with the aim
enhancing the range of materials and components to which our
coating be applied, as well as approaching the market with joint
solutions for difficult industrial applications.
Current Financial Year Trading
Having managed the business to a
broadly EBITDA and stable cash flow position in FY23, trading in
the first four months of the current financial year has been
impacted by some of our major customers de-stocking. So far, this
has more than offset the continuing strong growth in our aerospace
business that began in the final quarter of FY23. Group revenues in
the four months to 31 January 2024 were £1.3m compared with £1.9m
in the equivalent prior year period. We have taken action to reduce
costs and improve cash flows accordingly. In addition, selling
prices were increased by an average of 5% in January
2024.
After discussing anticipated forward
order schedules with major customers and updating our forecasts,
including building in the impact of the recent cost reductions and
selling price increases, and assuming the requisite capital is
raised in time, the Board now believes that revenues for the year
to September 2024 will be broadly in line with the previous
financial year. In view of the reduced cost base this should enable
the Group to deliver a positive EBITDA performance for the
year.
Philip Kirkham
CEO
7 February 2024
FINANCIAL REVIEW
Income Statement
Hardide grew during FY23 to report
record revenues of £5.5m (FY22 £5.0m), an increase of 10% year on
year.
We were successful in recovering
significant input cost inflation (in particular process gas, energy
and people costs) into selling prices during the year. This,
combined with strong cost controls and increased capacity
utilisation which allowed better recovery of factory fixed costs,
led to a 10 percentage point uplift in gross profit margins to
47.5% (FY22: 37.5%).
Overheads of £2.9m were well
controlled and were held to similar levels as in the prior year,
despite the growth in the business and cost inflationary
pressures.
Overall, this enabled Hardide to
significantly reduce its EBITDA loss from £0.9m in the prior year
to just £0.1m in FY24.
Total depreciation charges of £0.9m
were some £0.3m lower than in the prior financial year, mainly
because Hardide is a well invested business with spare capacity
with depreciation comfortably exceeding capital investment during
the year. This position is expected to continue for the foreseeable
future. In addition, we reviewed the useful lives of some of our
reactors. In view of these reactors' prior utilisation levels and
their current condition we concluded that a 15 year expected life
was now more appropriate than the previously assessed 10
years.
As a result of all the above,
Hardide more than halved its operating loss from £2.1m in FY22 to
£1.0m in FY23.
EBITDA is a key financial
performance indicator used by management to assess the operational
performance of the Group. This may be reconciled to the Income
Statement as follows:
|
2023
£m
|
2022
£m
|
Operating loss
|
(1.0)
|
(2.1)
|
Depreciation, amortisation and
impairment of owned assets
|
0.7
|
0.9
|
Depreciation and amortisation of
right of use assets
|
0.2
|
0.3
|
EBITDA
|
(0.1)
|
(0.9)
|
Net finance costs of £0.2m were
slightly higher than in the prior year, mainly reflecting the new
extended lease on the Martinsville facility in the USA.
Therefore, the loss before tax for
the year of £1.2m also broadly halved compared with prior year
levels of £2.3m, as did the loss per share of 1.9p (FY22:
3.9p).
Cash Flow
Hardide's cash flow for the year can
be summarised as follows:
£m
|
Year to 30 Sept 2023
|
Year to 30 Sept 2022
|
|
|
|
EBITDA
|
(0.1)
|
(0.9)
|
Reduction in working
capital
|
0.4
|
-
|
Other operating cash
items
|
(0.1)
|
-
|
Operating cash flow
|
0.2
|
(0.9)
|
|
|
|
Capital expenditure
|
(0.1)
|
(0.3)
|
|
|
|
Business cash flow before financing
|
0.1
|
(1.2)
|
|
|
|
Proceeds from sale and
leaseback
|
0.5
|
-
|
Net loan and lease
repayments
|
(0.6)
|
(0.2)
|
Equity finance
|
|
0.5
|
|
|
|
Net
cash flow for the year
|
-
|
(0.9)
|
Hardide's overall cash performance
for the year was break-even, representing a significant improvement
from the £0.9m cash outflow in the prior financial year. This
reflected the close to EBITDA break-even trading performance,
together with strong control of both working capital and capital
spend.
Therefore, we began and ended the
financial year with net cash resources of £0.7m.
Much work was done during the year
to improve working capital efficiency, including consignment
stocking arrangements and strong credit control.
The one-off cash benefit arising
from the Martinsville lease transaction of £0.5m was largely used
to repay existing financing and lease obligations.
Balance Sheet, Capital Structure and Net
Debt
The main changes in the Group
balance sheet over the year were:
· a
reduction in the net book value of property, plant and equipment by
£0.8m to £4.6m, as depreciation exceeded capital expenditure;
and
· a
reduction in current assets by £0.5m to £2.1m due to improved
working capital efficiency as described above.
Therefore, total assets decreased by
£1.3m to £8.4m.
Total equity / shareholders' funds
decreased over the year from £5.5m to £4.3m, largely reflecting the
loss after tax for the year.
Hardide's net debt (including lease
liabilities) was largely unchanged year on year at £2.3m. This
comprised cash of £0.7m (2022: £0.7m), loans of £0.7m (2022: £1.0m)
and lease liabilities of £2.3m (2022: £2.0m). As described above,
the new lease on the Martinsville facility helped refinance some
existing financial obligations that were repaid when
due.
Recent trading and financial position
The challenging trading conditions
in the first four months of the financial year referred to in the
Chair's and Chief Executive's statements have led to a significant
reduction in the level of cash available to the company compared
with the £0.7m reported at the last financial year end. Costs have
been reduced accordingly.
Funding and going concern
As described in the Chair's
statement, we are actively seeking to raise an additional £1m in
the short term from a combination of equity and debt finance to
provide necessary working capital and to support investment to grow
the business. Whilst we are actively in discussions with
shareholders, other investors and potential lenders, at this time
there can be no certainty that adequate funds will be received, on
which terms, or their timing.
Simon Hallam
Finance Director
7 February 2024
CONSOLIDATED INCOME STATEMENT
for the year ended 30 September
2023
|
|
Unaudited
12 months to 30 September
2023
£000
|
Audited
12 months
to 30 September 2022
£000
|
|
|
|
|
Revenue
|
|
5,499
|
5,015
|
Cost of sales
|
|
(2,886)
|
(3,135)
|
|
|
|
|
Gross profit
|
|
2,613
|
1,880
|
|
|
|
|
Administrative expenses
|
|
(2,871)
|
(2,821)
|
Other operating income
|
|
159
|
-
|
Other operating costs
|
|
(932)
|
(1,208)
|
|
|
(1,031)
|
(2,149)
|
|
|
|
|
Finance income
|
|
3
|
4
|
Finance costs
Finance costs on right of use
assets
|
|
(59)
(106)
|
(49)
(80)
|
|
|
|
|
(Loss) on ordinary activities before
taxation
|
|
(1,193)
|
(2,274)
|
|
|
|
|
Taxation
|
|
75
|
86
|
|
|
|
|
(Loss) on ordinary activities after taxation
|
|
(1,118)
|
(2,188)
|
|
|
|
|
(Loss) per share: Basic
|
|
(1.9)p
|
(3.9)p
|
(Loss) per share: Diluted
|
|
(1.9)p
|
(3.9)p
|
CONSOLIDATED STATEMENT OF FINANCIAL
POSITION
at 30 September 2023
|
|
Unaudited
As at 30 September
2023
£000
|
Audited
As at 30
September 2022
£000
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
Non-current assets
|
|
|
|
Goodwill
|
|
-
|
69
|
Intangible assets
|
|
9
|
19
|
Property, plant &
equipment
Right of use assets
|
|
4,640
1,697
|
5,402
1,660
|
Total non-current assets
|
|
6,346
|
7,150
|
|
|
|
|
Current assets
|
|
|
|
Inventories
|
|
236
|
487
|
Trade and other
receivables
|
|
742
|
955
|
Other current financial
assets
|
|
335
|
450
|
Cash and cash equivalents
|
|
740
|
693
|
Total current assets
|
|
2,053
|
2,585
|
|
|
|
|
Total assets
|
|
8,399
|
9,735
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
Trade and other payables
|
|
919
|
1,077
|
Loans
Deferred income
|
|
253
17
|
238
19
|
Right of use lease
liability
|
|
182
|
201
|
Total current liabilities
|
|
1,371
|
1,535
|
|
|
|
|
Net
current assets
|
|
682
|
1,050
|
|
|
|
|
Non-current liabilities
|
|
|
|
Loans
Deferred income
|
|
505
72
|
780
98
|
Right of use lease
liability
|
|
2,106
|
1,742
|
Provision for
dilapidations
|
|
50
|
50
|
Total non-current liabilities
|
|
2,736
|
2,670
|
|
|
|
|
Total liabilities
|
|
4,107
|
4,205
|
|
|
|
|
Net
assets
|
|
4,292
|
5,530
|
|
|
|
|
Equity attributable to equity holders of the
parent
|
|
|
|
Share capital
|
|
4,063
|
4,063
|
Share premium
|
|
19,242
|
19,242
|
Retained earnings
|
|
(19,318)
|
(18,200)
|
Share-based payments
reserve
|
|
577
|
553
|
Translation reserve
|
|
(272)
|
(128)
|
Total equity
|
|
4,292
|
5,530
|
CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 30 September
2023
|
Unaudited
12 months to 30 September
2023
£000
|
Audited
12 months
to 30 September 2022
£000
|
Cash flows from operating activities
|
|
|
Operating (loss)
|
(1,031)
|
(2,149)
|
Gain on sale and
leaseback
|
(159)
|
-
|
Impairment of goodwill
|
69
|
-
|
Depreciation and amortisation on
owned assets
Depreciation on right of use
assets
|
677
186
|
890
318
|
Share option charge /
(credit)
|
24
|
(9)
|
Decrease in inventories
|
251
|
17
|
Decrease / (increase) in
receivables
|
243
|
(372)
|
(Decrease) / increase in
payables
|
(93)
|
372
|
(Decrease) in provisions
|
-
|
(34)
|
Cash generated from / (used in) operations
|
167
|
(967)
|
|
|
|
Finance income
|
3
|
4
|
Finance costs
|
(59)
|
(49)
|
Right of use asset
interest
Tax received
|
(106)
161
|
(80)
78
|
Net
cash generated from / (used in) operating
activities
|
166
|
(1,014)
|
|
|
|
Cash flows from investing activities
|
|
|
Proceeds from sales of property,
plant and equipment
|
-
|
7
|
Purchase of intangibles
|
(2)
|
(1)
|
Purchase of property, plant and
equipment
|
(108)
|
(298)
|
Net
cash used in investing activities
|
(110)
|
(292)
|
|
|
|
Cash flows from financing activities
|
|
|
Net proceeds from issue of ordinary
share capital
|
-
|
509
|
Proceeds from sale and
leaseback
|
477
|
-
|
New loans raised
|
-
|
325
|
Loans repaid
Repayment of leases
|
(286)
(289)
|
(261)
(251)
|
Net
cash (used in) / generated from financing
activities
|
(98)
|
322
|
|
|
|
Effect of exchange rate
fluctuations
|
89
|
134
|
|
|
|
Net
increase / (decrease) in cash and cash
equivalents
|
47
|
(850)
|
|
|
|
Cash and cash equivalents at the beginning of the
year
|
693
|
1,543
|
|
|
|
Cash and cash equivalents at the end of the
year
|
740
|
693
|
CONSOLIDATED STATEMENT OF CHANGES IN
EQUITY
for the year ended 30 September
2023
|
Share
Capital
£000
|
Share
Premium
£000
|
Share-based Payments
£000
|
Translation Reserve
£000
|
Retained
Earnings
£000
|
Total
Equity
£000
|
|
|
|
|
|
|
|
At 1 October 2021
|
3,942
|
18,854
|
562
|
(432)
|
(16,012)
|
6,914
|
Issue of new shares
|
121
|
388
|
-
|
-
|
-
|
509
|
Share options
|
-
|
-
|
(9)
|
-
|
-
|
(9)
|
Exchange translation
|
-
|
-
|
-
|
304
|
-
|
304
|
Loss for the year
|
-
|
-
|
-
|
-
|
(2,188)
|
(2,188)
|
At 30 September 2022
|
4,063
|
19,242
|
553
|
(128)
|
(18,200)
|
5,530
|
|
|
|
|
|
|
|
At 1 October 2022
|
3,942
|
19,242
|
553
|
(128)
|
(18,200)
|
5,530
|
Issue of new shares
|
-
|
-
|
-
|
-
|
-
|
-
|
Share options
|
-
|
-
|
24
|
-
|
-
|
24
|
Exchange translation
|
-
|
-
|
-
|
(144)
|
-
|
(144)
|
Loss for the year
|
-
|
-
|
-
|
-
|
(1,118)
|
(1,118)
|
At 30 September 2023
|
4,063
|
19,242
|
577
|
(272)
|
(19,318)
|
4,292
|
(unaudited)
|
|
Notes
1. Basis of preparation of
financial information
While the financial
information included in this preliminary unaudited annual financial
results announcement has been prepared in accordance with the
recognition and measurement principles of international accounting standards in conformity with the
requirements of Companies Act 2006, this
announcement does not contain sufficient information to comply with
IFRSs.
The financial information set out
herein does not constitute the Company's statutory accounts and is
unaudited. Statutory accounts for Hardide plc for the year
ended 30 September 2022 have been delivered to the Registrar of
Companies and those for the year ended 30 September 2023 will be
delivered following the Company's annual general meeting.
The auditors' report in respect of the year ended
30 September 2022 was unqualified and did not contain statements
under s498 (2) or (3) of the Companies Act 2006. The auditors have
not yet reported on the financial statements for the year ended 30
September 2023 and therefore the financial information included in
this announcement is unaudited.
Funding and going concern
As described in the Chair's
Statement, we are actively seeking to raise an additional £1m in
the short term from a combination of equity and secured debt
finance to provide necessary working capital and to support
investment to grow the business. Whilst we are actively in
discussions with shareholders, other investors and potential
lenders, at this time there can be no certainty that adequate funds
will be received, on which terms, or their timing.
2.
Segmental information
Under IFRS8, operating segments are
defined as a component of the entity (a) that engages in business
activities from which it may earn revenues and incur expenses (b)
whose operating results are regularly reviewed and (c) for which
discrete financial information is available. The Group management
is organised into UK and USA operation and Corporate central
functions, and this factor identifies the Group's reportable
segments.
Year ended
30 September 2023
|
UK
operation
£000
|
US
operation
£000
|
Corporate
£000
|
Total
£000
|
|
2023
|
2022
|
2023
|
2022
|
2023
|
2022
|
2023
|
2022
|
|
|
|
|
|
|
|
|
|
External revenue
|
3,154
|
3,076
|
2,345
|
1,939
|
-
|
-
|
5,499
|
5,015
|
Operating profit / (loss)
|
(776)
|
(1,545)
|
759
|
201
|
(1,014)
|
(805)
|
(1,031)
|
(2,149)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment assets
|
6,196
|
6,855
|
2,054
|
2,323
|
149
|
557
|
8,399
|
9,735
|
Expenditure for non-current
assets
|
22
|
221
|
23
|
81
|
-
|
-
|
45
|
302
|
Segment liabilities
|
2,594
|
2,962
|
1,225
|
893
|
288
|
350
|
4,107
|
4,205
|
The Group currently has a single
business product, so no secondary analysis is presented. Revenue
from external customers is attributed according to their country of
domicile. Turnover by geographical destination is as
follows:
External sales
|
UK
£000
|
Europe
£000
|
N
America
£000
|
Rest of
World
£000
|
Total
£000
|
|
|
|
|
|
|
2023
|
1,938
|
95
|
3,396
|
70
|
5,499
|
2022
|
1,314
|
666
|
3,007
|
28
|
5,015
|
3.
Earnings Before Interest, Taxation, Depreciation and Amortisation
("EBITDA")
EBITDA is a key financial
performance indicator used by management to assess the operational
performance of the Group. This may be reconciled to the Income
Statement as follows:
|
2023
£000
|
2022
£000
|
Operating loss
|
(1,031)
|
(2,149)
|
|
|
|
Add back non-cash other operating
costs:
|
|
|
Impairment of goodwill
|
69
|
-
|
Depreciation and amortisation of
owned assets
|
677
|
890
|
Depreciation and amortisation of
right of use assets
|
186
|
318
|
EBITDA
|
(99)
|
(941)
|
4.
Earnings per share
|
2023
£000
|
2022
£000
|
(Loss) on ordinary activities after
tax
|
(1,118)
|
(2,188)
|
|
|
|
Basic earnings per ordinary
share:
|
|
|
|
|
|
Weighted average number of ordinary
shares in issue
|
58,901,959
|
56,058,053
|
Earnings per share
|
(1.9)p
|
(3.9)p
|
As net losses were recorded in 2023
and 2022, the potentially dilutive share options are anti-dilutive
for the purposes of the loss per share calculation and their effect
is therefore not considered.
5.
Post balance sheet events
As described in the Chair's
Statement and Chief Executive's reports, the first four months
trading of the current financial year ending 30 September 2024 have
been challenging. Revenues were £1.3m compared with £1.9m in the
equivalent prior year period.
Hardide is seeking to raise an
additional £1m in the short term from a combination of equity and
secured debt finance both to provide additional working capital and
to support investment to grow the business. Further details are in
the Chair's Statement and the Financial Review.
6.
Annual report and accounts and notice of
AGM
The full audited annual report and
accounts for the year ended 30 September 2023, including the basis
for preparation and other explanatory notes, will be posted to
shareholders in February 2024 upon completion of audit finalisation
procedures. These will be available as soon as possible thereafter
on the Company's website (www.hardide.com).
The announcement of the publication of the full report and accounts
will be notified. Notice of the Company's annual general meeting
will be sent to shareholders at the same time.