Hardide Plc (LON:HDD) Chief Executive Officer Philip Kirkham caught up with DirectorsTalk for an exclusive interview to discuss trading for the first six months of its current financial year to 30th September 2018.
Q1: We’ve seen that you’ve released a positive trading update today, is current trading performing to your expectations?
A1: Yes, we’re very pleased with how the year has started and how it is still going. We’ve seen a continuation in the improvement in recovery and demand we saw in the second half of the last financial year from existing customers, but we’ve also been gaining some new business as well.
As we mentioned in the note, sales in the first half of this current financial are over 40% higher than the same period last year and nearly 25% higher than the second half of last year, both well ahead of general market trends.
We’ve seen demand increasing from oil and gas but also from our flow control and precision engineering sectors, with all of these sectors showing good increases compared with the first and second halves of last year.
Q2: As you said, demand has increased for customers in the oil and gas sector, could you say a bit more about that?
A2: Oil and gas price recovery is evident in the market and sort of general market activity increases, are resulting an increasing demand from our oil and gas sector customers plus we have gained some new major applications during this time. The oil service companies seem to be cautiously optimistic about future activity levels and all the projections are that demand for oil is continuing to grow.
We did announce, previously, two new international framework supply agreements, one with a major international oil and gas operator and one with a provider of completion technology. Both of these are moving forward steadily, we’ve one now in full production and the other at the final stages of technical development before production commence.
So, yes, oil and gas is going very strongly for us at the moment.
Q3: Now, you’ve invested further in the facilities in the US and in the UK, can you talk us through that investment?
A3: Certainly. We finalised the fundraising from October 2017 in February this year with the final £820,000 being received after we received the initial HMRC EIS clearance.
We said at the time of the fundraising that part of these funds were to be used to purchase at least one additional coating reactor for the US facility, this is now being made, we expect this to be installed in August this year in Martinsville. We’re also at the final stages of getting the US site approved to the aerospace standard AS-9100 and we expect that this will be completed early Summer.
Of course, we’re continuing to invest in operational enhancements in Bicester, in the UK, and a lot of this work has now been completed during the first half of this year.
