Hardide Plc (LON:HDD) Chief Executive Officer Philip Kirkham caught up with DirectorsTalk for an exclusive interview to discuss the £2.54 million fundraise, the potential loan with Martinsville-Henry County Economic Development Corporation, their North American oil & gas framework agreement and their current trading
Q1: Now, you’ve just announced that Hardide has raised £2.54 million, before expenses, can you tell me why you raised these funds?
A1: Certainly. I think to start, I’d like to say that we’ve got some very supportive investors out there, we obviously did some roadshows around the market over the last week and the comments and the enthusiasm we got back from our investors was fantastic and the fundraising was actual oversubscribed so that was good news as well.
Basically, it’s all about development of the business, we’re obviously seeing a growing demand from existing oil and gas customers and we’ve got some good prospects with new customers as well. We recently signed a framework agreement with a large oil and gas operator and we’re in the final stages of negotiating a deal with another North American oil and gas company as well.
The Virginia facility that we opened in 2016 is performing really well and we project that the 2 coating reactors we have there, that we started operating in 2016, will be at capacity during 2018 so we need to plan to install more reactors there. With these taking about 10 months from order to getting them ready to work we need to order 1 now and plan to order a further reactor in about a years’ time. The second reactor we’re planning to order is going to probably be a bigger size reactor than we currently have so we can coat larger components which we’re seeing from the customers.
Q2: Can you also tell us more about the potential loan with Martinsville-Henry County Economic Development Corporation?
A2: It’s a very low interest loan of 2% over 5 years from the local community in Martinsville who have been very supportive all the way from us deciding to set up in Martinsville 2 years and supported us in many ways whilst we’ve been operating there. So, basically, they want to continue to support our growth in continued investment in capital and jobs in the locality. We haven’t actually got the loan yet, it’s in the final stages of preparation and we’re expecting the paperwork in the next few days.
Q3: You also mention a framework supply agreement signed with a major North American operator in the oil and gas sector, can you tell me anything about it?
A3: Unfortunately, very little, as our confidentiality clauses within the contract which is pretty typical for customers in the oil and gas industry, they’re very protective about what exactly they’re doing as they don’t want their competitors to know.
It’s our first framework agreement with a major oil and gas operating company and it’s a very complicated, intricate product that we’re coating for them, but it’ll obviously benefit them at the end of the day by using the Hardide technology and give them significant improvements in performance and proficiency.
We do work with many of the global oil service companies to improve performance of their tools and working directly with an operator enables them to see for themselves the actual coating technology and I’m sure they’ll be many more different applications that we’ll see in this field.
Q4: Will you be recruiting more staff to service the increase in capacity?
A4: Yes, we will, particularly in North America as we expand there and grow, we will need more business development resource to handle the growing opportunities that we see there and obviously, more production staff as we install more reactors and to handle the greater volume of components that we expect to go through the facility.
Q5: Finally, can you tell us a little more about Hardide’s current trading?
A5: Well, as was said in the note, we expect the financial year, just gone, to be in line with market expectations which would mean something like a 50% increase in turnover compared to the previous financial year. We will be announcing our preliminary results on December 11th and we are very positive about the coming year and beyond as this fundraising really shows, it’s all about the future.
