Preliminary results for year ended 30 Sept 2020

RNS Number : 6692H

Hardide PLC

07 December 2020

 

 

 

7 December 2020

Hardide plc

("Hardide", the "Group" or the "Company")

Preliminary results for the year ended 30 September 2020

'Robust results in challenging conditions - In-line with market expectations'

Hardide plc (AIM: HDD), the developer and provider of advanced surface coating technology, announces its preliminary results for the year ended 30 September 2020.

Highlights

Financial

·	Revenue of £4.8m (FY2019: £5.1m)
·	Gross profit of £2.3m (FY2019: £2.4m)
·	Gross margin of 49% (FY2019: 48%)
·	Reduced EBITDA loss of £0.5m before exceptional items, including £0.2m of costs relating to site relocation (FY2019: loss before exceptional items £0.6m). The beneficial impact on EBITDA this year of applying IFRS 16 is £0.4m (after IFRS 16, like for like FY2019 EBITDA loss of £0.4m)
·	Over-subscribed fundraising of £2.5m (before expenses) to fund additional equipment, enhance new UK site at Longlands Road, Bicester and strengthen the balance sheet
·	Cash at bank at 30 September 2020 of £2.7m (FY2019: £4.8m)

Trading

·	Revenue was only 6% below FY2019 with increased revenue across all sectors other than oil & gas, which was adversely affected in H2 due to the slowdown of the global economy resulting from the COVID-19 pandemic
	· Sales to the energy sector down 14%. Parts for the delayed major oil and gas project order were received post period in October 2020
	· 9% increase in sales to the flow control sector · 19% increase in sales to the aerospace sector · 4% increase in sales to the precision engineering sector
	· 56% increase in sales of coated industrial diamonds
	· Revenue from UK and North American customers were each 49% of total Group sales (FY2019: UK 35%, North America 65%) · Revenue from Martinsville facility up 10% compared to FY2019, totaling 33% of Group sales
·	Honoured with Queen's Award for Enterprise: International Trade 2020 in recognition of the outstanding growth of international sales

 Strategic

·	Relocation of UK operations to new site completed on time and within projected cost
·	Two new coating reactors installed in UK including one large reactor, and one new reactor in the US. The Group now has nine operational reactors compared to six at the end of 2019
·	Airbus production orders being received for the A380 wing compression flap pads. Coating of components for the Lockheed Martin F-35 Lightning II Joint Strike Fighter continues
·	Long-term test programmes with our new coating for steam and gas turbine blades progressing well
·	Major environmental improvements due to the new site and production processes
·	Good progress in targeting new opportunities in low or carbon-neutral energy technology with production orders received.

Technology

·	Successfully completed two National Aerospace Technology Exploitation Programme (NATEP) grant funded projects on a new ultra-low temperature coating for aerospace metals, which is now in late stages of development before being commercially available
·	UK Intellectual Property Office granted a patent on the further-enhanced Hardide coating and its new applications, including turbine blades. National phase patenting has started in 10 leading industrial countries
·	Validation began in nine countries of a European patent application for alloyed tungsten produced by chemical vapour deposition

Commenting on the results, Robert Goddard, Chairman of Hardide, said: "Given the economic backdrop and impact of COVID-19 on the second half of the financial year, we are pleased to announce a solid set of numbers, which are just 6% below our record revenues in FY2019 and in-line with market expectations. Sales to all market sectors increased in the year, other than to oil & gas, which fell by 14% due to the COVID-19 related downturn.

"Looking forward, the Board retains a cautious outlook in the short-term as the uncertainty of COVID-19 continues to impact on our customers' visibility for their own businesses. This is set against a confidence that as the global economy recovers, volume demand will return and continue on the previous upward trajectory. The latest market forecasts show a good recovery in oil demand and production in the course of 2021, with good grounds for optimism across our other targets as we move towards the second half of our financial year.

"We continue to implement our strategy of seeking new resilient, emerging and high-volume markets. To that end, the Board is excited by the progressive shift to forms of energy that are not derived from fossil fuels and the moves towards a carbon-neutral future being taken by the major oil & gas companies and our customers. The Hardide coating is already incorporated in a solar energy application in Europe and we are making excellent progress on a fast-track test programme with a leading, blue chip, clean energy company in the USA. Looking forward, we see applications in low-carbon and renewable energy technologies forming an increasing part of our overall revenue."

Enquiries:
Hardide plc Robert Goddard, Non-Executive Chairman Philip Kirkham, CEO Jackie Robinson, Communications Manager	Tel: [phone]
IFC Advisory - Financial PR and Investor Relations Graham Herring / Tim Metcalfe / Florence Chandler	Tel: [phone]
finnCap - Nominated Adviser and Joint Broker Henrik Persson / Matthew Radley	Tel: [phone]
Allenby Capital - Joint Broker Tony Quirke / Jeremy Porter	Tel: [phone]

Notes to editors:

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 oil & gas exploration and production, valve and pump manufacturing, precision engineering and aerospace industries.

www.hardide.com

 

chairman's and ceo's report

INTRODUCTION

The Group is pleased to report full year sales of £4.8m (FY2019: £5.1m); down by just 6% on the last year. The strong first half continued into the start of H2 until the disruption in our customers' markets caused by the COVID-19 pandemic began to affect their demand. After this promising start to H2, revenues overall were adversely affected by lower sales to oil & gas customers. The Group's efforts to reduce further its dependence on industry sectors and particular customers protected it from an even more severe exposure to the downturn. Sales to all other market sectors increased in the year; as did sales for the coating of several specialist oil & gas products, including those for subsea and sand filtration.

In January 2020, the Group completed an over-subscribed fundraising of £2.5m (before expenses). This was to fund completion of the new UK site, additional equipment and strengthen the balance sheet.  At about the same time, Finance Director Peter Davenport announced his intention to leave the Group to pursue a career in education. The Board was sad to see Peter leave and thanks him for his diligence and important contribution to the growth and health of the Group over the years. Simon Hallam was appointed as Finance Director in April 2020.  Very quickly, he has familiarised himself with Hardide and is making valuable contributions. We were also sorry in August 2020 to lose Charles Irving-Swift as non-executive director and thank him also for his contributions to the Board. Tim Rice has taken over the role of senior independent director.

One of the highlights of the year has been the smooth transition of UK production to the new Longlands Road site in Bicester and the addition of a bigger reactor. This will enable the coating of larger components. During August 2020, the new 20,000 sq. ft. site became fully operational. One reactor will remain in the former premises to coat aerospace components until Airbus completes its approval process of the new site, which is expected to conclude in spring 2021.

In April 2020, the Group was proud to be honoured with a Queen's Award for Enterprise: International Trade. This was in recognition of the outstanding growth in international sales, which increased by 152% over a three year period. In the year to 30 September 2020, international sales accounted for 51% of revenues.

COVID-19

The Group's facilities in Bicester and Martinsville continued to operate as normal throughout the COVID-19 pandemic, with considerable emphasis being placed on health and safety measures to protect staff and contractors. The Group has followed official guidelines in the places where we operate and has supported remote working where possible.

The pandemic has brought considerable disruption to our key markets of oil & gas, and aerospace. We have remained close to our customers during this time. So, as the global economy and as our markets adjust to the new normal, we are confident that higher demand will return. The pandemic also paused a number of customers' R&D and test programmes; although we are beginning to see some of these being resumed.

In the UK, where it was operationally appropriate to do so, the Group utilised the Government's Coronavirus Job Retention Schemes to match our workforce to demand and protect employment. In the US, we applied successfully for funds from the US Small Business Association's 'Paycheck Protection Program'.

FINANCIAL RESULTS

The Group generated strong sales of £4.8m in the year ended 30 September 2020 (FY2019: £5.1m), despite the difficult economic conditions over the second half of the year caused by COVID-19.

Direct costs, including production salaries, decreased by 8% which was attributable to the 6% reduction in sales.

Group gross profit was £2.3m (FY2019: £2.4m). Despite the lower revenue, gross margin improved by 1% to 49% (FY2019: 48%).  

Overhead costs excluding those related to the new premises decreased by 6%. This was due to the receipt of £121k grant income from the National Aerospace Technology Exploitation Programme (NATEP), and also support from the US Small Business Association's Paycheck Protection Program amounting to US$200k. This loan is 'forgiven' and does not have to be repaid as long as certain conditions are met. The Group believes those conditions have been met and have released this amount to the P&L.

Before exceptional items, the Group's EBITDA loss was £0.5m, and included £0.2m of costs relating to relocation to the new building in Bicester (FY2019: £0.6m loss before exceptional items). The Group adopted IFRS 16 with effect from 1 October 2019 and has applied the standard using the modified retrospective approach. Comparative information has not been restated and is therefore still reported under IAS 17 'Leases' and related interpretations.The beneficial impact on EBITDA in FY2020 of applying IFRS 16 is £0.4m. After IFRS 16 adjustments, like for like EBITDA loss in FY2019 would be £0.4m.

Group EBITDA in the first half was breakeven, and a £0.5m loss in the second half reflects the impact that COVID-19 has had, particularly over the last quarter of financial year.

The Group has successfully negotiated a further six-month rent holiday for its lease payments on the Longlands Road building with effect from 28 September 2020, which will have a cash benefit of c.£90k in FY2021. It has also negotiated a 30% reduction in lease payments on the Wedgwood Road premises from January 2021, giving a cash benefit of c.£23k in FY2021. The lease on the Wedgwood Road premises terminates in October 2021.

The only borrowing is the asset finance agreement with Hitachi Capital of £0.4m against a new coating reactor.

During the year, the Group repaid US$116k of the original US$170k grant from the Virginia Tobacco Commission. As this had been fully provided for, a release of US$54k has been made to exceptional items. The Martinsville-Henry County Economic Development Corporation in Virginia has converted the outstanding value of their loan of US$182k to a grant, with the Group released from all obligations under the loan agreement, with no further repayments due. This is being amortised to the income statement in line with the remaining life of the reactor which was installed at Martinsville in December 2018, for which the loan was originally made.

A provision of US$150k created in FY2019 remains for the likely full repayment of the State of Virginia's Commonwealth Opportunity Fund grant. This is because the Company has not created the required number of jobs in Martinsville. Repayment is expected to be in January 2021.

On the balance sheet, net assets at 30 September 2020 were £8.8m (FY2019: £7.7m). This included a cash balance of £2.7m (FY2019: £4.8m). The reduction from 2019 was due mainly to the investment in new plant and equipment, and generally in the Longlands Road facility. There remains c.£0.3m committed for completion of the relocation project. Other working capital balances have reduced overall by £0.2m, with the main factors being a reduction in inventory levels and lower trade debtors caused by the lower activity levels over the final quarter.

The Board believes that its cash reserves will be sufficient for forecast requirements but will continue to monitor and explore its financing requirements, particularly should the rate of recovery in demand be faster or slower than the Board's expectations.

OPERATIONAL OVERVIEW

Customers and Markets

Revenue from aerospace customers increased by 19%, flow control by 9% and precision engineering by 4%. In flow control, sales rose to one of our longest standing and largest US customers as they used Hardide-coated parts in new applications, including pumps for medical sanitisers.

Aerospace

An increase in aerospace sales was due largely by demand for military aircraft, especially for BAE Systems' Typhoon and Lockheed Martin's F35 Joint Strike Fighter.  Intense work on approvals has continued jointly with Airbus and their Tier 1 suppliers throughout the year. We were delighted to receive our first production orders from Airbus for the A380 and Beluga transporter aircraft. Hardide-coated compression flap pads are now specified as maintenance replacements on the substantial in-service A380 fleet and regular, long-term orders are expected. The coating has been approved for specific wing components on the Airbus A320 and A321XLR aircraft and the Group is in various stages of testing and approval on parts for the A320, A321, A321XLR, A330, A400M aircraft and the Airbus 'Wing of the Future' programme. Regular production orders for coating A330/A320 components are expected to commence in H2 2021.

We had expected production orders from a large European MRO (maintenance, repair and overhaul) organisation for the Airbus A320 during the financial year. These components are subject to a performance evaluation of the Hardide coating after flying, apparently successfully, for more than 4,000 hours. The pandemic has delayed final evaluation of these parts but is expected to be finalised in the coming months. One of our strategic objectives is to develop further our sales into the global MRO market.

Regular orders for military aircraft are being received for the coating of components on the Lockheed Martin F-35 Lightning II Joint Strike Fighter (JSF) and BAE Systems' Eurofighter Typhoon. Hardide-A has been selected to replace HVOF (high velocity oxy-fuel) thermal spray coatings on the JSF components. In addition to the JSF, we are working on several other aerospace projects where HVOF coatings may be replaced by Hardide-A.

Together with Leonardo Helicopters, we developed a number of coating techniques for innovative parts used in the transmission and rotor head systems to reduce in-service costs and extend component life. Final testing of Hardide-coated parts in a transmission assembly was further delayed but is expected to get underway by Christmas.  

Multiple test programmes are in progress with OEMs (original equipment manufacturers) and Tier 1 suppliers for a range of civil and military aircraft applications. Other development work for European and North American aerospace companies continues.

Aerospace is a major strategic market for the Group and we see significant opportunities in the MRO industry, as well as with OEMs. In July 2020 we strengthened our aerospace business development team with the appointment of a highly-knowledgeable and well-connected manager who has 17 years' experience in the long-term development of global aerospace markets in the UK, EU and Asia Pacific.

The Group continues to develop digital engagement with webinars, virtual meetings, conferences and exhibitions. We provided video presentations for the 2020 Farnborough Virtual Airshow and continue to develop and roll out innovative approaches during the COVID-19 restrictions, ensuring continued communication with our existing and new customers.

Energy

The financial year started strongly, with growing demand from oil and gas customers and H1 sales up 30% from H1 2019. When the pandemic began to take hold in March 2020, demand was not affected immediately. Instead, the effects of the lockdown became evident after a few months with order book delays notified to the market in July 2020. Sales to oil & gas customers were 14% lower than FY2019. Though volume orders from some major oilfield customers were depressed in the second half, a number of oil & gas applications have proven resilient and revenues from them have grown throughout the year. Also, demand for the coating of industrial diamonds for oil & gas customers rose 56% compared to FY2019, although heavily weighted towards H1. Parts for the large, delayed oil and gas project order originally expected in H2 2019, were received early in H1 2020.

The visibility of demand from our oil & gas customers remains limited, although we are confident that as the global economy recovers, volume demand for Hardide-coated products will return in this sector and continue on its previous upward trajectory.

We are encouraged by the high number of new oil and gas applications that we have in development and in test programmes. In particular, these include the coating of mesh and wire-wrap screens for sand filtration applications. The Hardide coating is ideally suited to this highly abrasive application, which requires the complete coating of very complex layers of interwoven mesh. Also, there are multiple applications beyond the oil and gas sector for this technology that we are developing with specialist manufacturers of filters

Renewables

The Board is mindful of the wider global move towards the use of energy derived from non-fossil fuels, and the shift towards a low-carbon and renewable energy future being taken by the major oil & gas companies and users of our products. Looking beyond the downturn, we see renewable and clean energy technologies forming an increasing part of our revenue portfolio. Already, Hardide coating is being incorporated into the production process of a solar energy company in Europe where we now receive regular orders.

Also, we are making excellent progress on a fast-track test programme with a very substantial, blue-chip, clean energy company in the USA.

Power Generation and Precision Engineering

The Group is now working with six power generation companies in the UK and Europe on our long-term project to commercialise the recently-patented coating for blades and vanes used in power generation turbines. Product testing is at an advanced stage with EDF Energy who plan to provide a number of blades for coating in 2021 to field test in a power station in 2022. Meanwhile, we are at various stages of testing for both steam and gas turbines with five other power generation customers.

Demand for our coated components in high‑speed X-ray baggage screening machines has been maintained at previous levels.

Marketing Communications

Our plans to exhibit and make technical presentations at both the Singapore and Farnborough International Airshows, as well as at several other international exhibitions and conferences, were prevented by the pandemic. In response, we shifted our focus online and participated virtually wherever this was an option. We increased our digital marketing activities, and made comprehensive use of all traditional and social media channels to connect with potential customers and make new contacts.  In May 2020, we launched our redesigned and responsive website with refreshed content and enhanced functionality for technical users and investors. The site is updated regularly and we know through web analytics that it is used heavily as a resource for information on Hardide coatings' technical data. It is also a good source of leads and provides us with feedback on the information that most interests current and prospective users of Hardide coatings.

Production, Technology, Research & Development and Accreditations

The new Longlands Road site in Bicester was fully operational from August 2020. It was completed on time and within projected cost. The move has provided the Group with a modern, high tech and efficient production environment that enhances our levels of environmental and energy efficiency. Energy-efficient LED lighting has been installed throughout the building, which itself is very thermally efficient. During cold periods, process heat from the reactors is fed back into the work areas, so reducing the need for space heating.

New production and filtration equipment further improves the environmental performance of the process, which has always been environmentally superior to other hard coating technologies.  The investment in new component cleaning equipment has almost eliminated the consumption of volatile organic compounds (VOCs) used in the cleaning of incoming components. Additionally, all gaseous by-products from the production processes are comprehensively neutralised and cleaned, so ensuring clean discharges to atmosphere. Holding tanks have been installed that have eliminated any un-verified discharge of liquid by-products into the drains.

Further significant reduction of the Group's overall carbon footprint has been achieved by having a US coatings facility. Previously, all products coated for North American customers were airfreighted to the UK and back again to the customer.

Three new coating reactors were installed during the year, two in the UK and one in the US, bringing the total in the Group to nine. The UK's new larger reactor was commissioned in September 2020. This, together with the new large pre-treatment line and cleaning machine means the process size capabilities are expanded by a third and can now accommodate components up to 1.5 metres long. We have run successfully the first parts through the new reactor and expect to secure additional applications in the power generation, aerospace and oil & gas sectors based on our increased capabilities.

Completed successfully were two projects to apply the new, ultra-low temperature coating to additional metal types in the aerospace sector and for its subsequent machining. Funded by the National Aerospace Technology Exploitation Programme (NATEP), the work was carried out in collaboration with Airbus, Leonardo Helicopters and other industry partners, and further enhanced our technical credentials with these customers. This coating is now in the late stages of development before being made commercially available.

Before the COVID lockdown, our Technical Director participated in a delegation to South Korea that was sponsored by Innovate UK. This was a strategically significant and productive project - several potential customers were identified, as was a very suitable potential agent to represent Hardide. Following the visit, coated samples were supplied for four applications and these are now being tested by customers in South Korea.

The Longlands Road site has been certified to environmental standard ISO14001, and the audit for aerospace quality management system AS9100D/ISO9001 was completed, with full approval due in December 2020. The former Bicester site retains Nadcap (National Aerospace and Defense Contractors Accreditation Program) 'Merit' Status and planning is underway for Nadcap accreditation at Longlands Road site. Aerospace production will continue at Wedgwood Road until Airbus approves the new site, expected in spring 2021. Plans to progress Nadcap accreditation and Airbus approval at the US site are delayed until international travel restrictions are lifted.

Brexit - the UK Transition

Although the Group has a low level of transactions with EU countries, we have evaluated the risks across all aspects of the business. We are in dialogue with our EU based suppliers of key raw materials and see no reason at present for significant disruption. Nevertheless, we have taken precautions and built stocks of key materials in the UK in case of any border delays in early 2021. Almost all our customers' components arrive from within the UK or by airfreight from North America. There are currently very few customers' products that travel to or from the EU. All of our staff who are EU nationals have received Settled Status, ensuring no personnel difficulties. We continue to keep abreast of developments and advice from Government and industry bodies.

Intellectual Property

In October 2019, the UK Intellectual Property Office granted a patent on the further-enhanced Hardide coating and its new applications, particularly in power generation. In 2020, patenting started in 10 leading industrial countries. This is an important achievement that strengthens the Group's IP portfolio. Fundamental research continues into the development of new coating variants and applications are regularly evaluated for patentability.

STRATEGY

Hardide is a 'technology development' company in which increasing numbers of customers and applications prove the worth and robustness of the technology thereby giving rise to increasing sales, customer industries and customers, and ultimately to high, growing and more-consistent profits.

The Group's high operational gearing has been demonstrated previously by an improvement in EBITDA markedly faster than the rate of increase in sales, albeit, the upward trajectory of sales has been set back temporarily by the pandemic‑induced decrease in demand. Accordingly, high growth in shareholder value demands continued investment in business development, marketing and technological progress - not on reducing costs.

There are considerable benefits to end-users in using Hardide coatings. Such benefits include longer working life of the component and reduced maintenance costs.  In many cases it also gives the customer a significant competitive advantage. 

There exist strong barriers to entry into Hardide's markets. Foremost among these are a continuously-refreshed patent portfolio and the skills embedded among our staff. Almost as important is the fact that our coating is used often in mission-critical or safety-critical applications, or both. This means that potential customers very often have approval processes that can last many years. 

The Group is making further progress with its successful efforts to diversify and increase its number of customers and target industries, and will continue to do this. In the short-term regular demand from Airbus is about to commence and the coating of turbine blades for power generation is a realistic medium-term target that has good profit potential.  Also in prospect are exciting short- and medium-term opportunities with customers in the renewable energy sector and new applications in oil & gas.

The Company will seek out and develop further opportunities for partnering with end-users of the technology and by this means achieve further technical success and additional revenue.

The Group is aiming to generate at least sufficient cash from trading to fund further technical developments and marketing. The expectation is that in future it will be possible to fund at least the majority of new capex - dependent on the rate of increase in market demand because there may again be the need to spend capital ahead of demand growth.

The Board retains its positive view of Hardide's potential for profitable growth.  Although not profit‑maximising in the very short-term, investment in further marketing, business development, and research & development will continue.

EMPLOYEES AND STAKEHOLDERS

The Board must thank our employees for their commitment, flexibility and hard work. During this most uncertain of times they have worked tirelessly to ensure that the site relocation project was delivered seamlessly and with no interruption in supply to customers, or any reduction in product quality. Production, technical and laboratory equipment was transferred with minimal disruption, and our quality and environmental processes were established at the new site, both timely and efficiently. The Board recognises the hard work and planning that went into achieving this, and that it was further complicated by the disruptive effects of the COVID-19 pandemic on contractor availability and normal ways of working.

The Board also extends its thanks to shareholders and other stakeholders for their continued support and confidence in the future of our business.

OUTLOOK

The Board remains optimistic and positive about the longer-term growth of Hardide and is committed to the strategy of continued diversification into resilient, emerging and high-volume markets, while at the same time developing our existing high margin markets, where we have proven performance.

The short-term outlook is more difficult to predict as our customers lack visibility for their own businesses, but there are good grounds for optimism as the latest market forecasts show a good recovery in oil demand and production in 2021. The Board is confident that, as the global economy recovers and new customers and applications come on stream, demand for Hardide's products will return and continue on its previous upward trajectory. We believe that Hardide has a strong and sustainable strategy and business model; and that financial performance will benefit from our very high operational gearing as revenues recover.

Robert Goddard	Philip Kirkham
Chairman	CEO
7December 2020	7 December 2020

 

CONSOLIDATED INCOME STATEMENT

for the year ended 30 September 2020

		2020 £000	2019 £000
Revenue		4,756	5,052
Cost of sales		(2,436)	(2,635)
Gross profit		2,320	2,417
Administrative expenses		(2,861)	(3,037)
Depreciation and amortisation of owned assets Depreciation of right of use assets Exceptional items		(477) (288)	(481) -
Provisions		42	(101)
Operating (loss)		(1,264)	(1,202)
Finance income		11	15
Finance costs Finance costs on right of use assets		(12) (91)	(3) -
(Loss) on ordinary activities before taxation		(1,356)	(1,190)
Taxation		65	54
(Loss) on ordinary activities after taxation		(1,291)	(1,136)
(Loss) per share: Basic		(2.5)p	(2.5)p
(Loss) per share: Diluted		(2.5)p	(2.5)p

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

at 30 September 2020

		2020 £000	2019 £000
Assets
Non-current assets
Goodwill		69	69
Intangible assets		50	30
Property, plant & equipment Right of use assets		6,337 2,130	2,745 -
Total non-current assets		8,586	2,844
Current assets
Inventories		565	691
Trade and other receivables		486	1,003
Other current financial assets		395	277
Cash and cash equivalents		2,715	4,809
Total current assets		4,161	6,780
Total assets		12,747	9,624
Liabilities
Current liabilities
Trade and other payables		906	1,351
Financial liabilities		91	50
Provision for grant repayment Right of use lease liability Provision for onerous lease		116 193 45	260 - -
Total current liabilities		1,351	1,661
Net current assets		2,810	5,119
Non-current liabilities
Financial liabilities Right of use lease liability		407 2,046	164 -
Provision for onerous lease and dilapidations		106	101
Total non-current liabilities		2,559	265
Total liabilities		3,910	1,926
Net assets		8,837	7,698
Equity attributable to equity holders of the parent
Share capital		3,836	3,673
Share premium		18,196	15,987
Retained earnings		(13,210)	(11,964)
Share-based payments reserve		360	274
Translation reserve		(345)	(272)
Total equity		8,837	7,698

 

CONSOLIDATED STATEMENT OF CASH FLOWS

for the year ended 30 September 2020

	2020 £000	2019 £000
Cash flows from operating activities
Operating (loss)	(1,264)	(1,202)
Impairment of intangibles	13	7
Depreciation on owned assets Depreciation on right of use assets	464 288	474 -
Share option charge	86	62
Decrease / (increase) in inventories	126	(392)
Decrease / (increase) in receivables	388	(266)
(Decrease) / increase in payables	(445)	73
(Decrease) / increase in provisions	(144)	116
Cash used in operations	(488)	(1,128)
Finance income	11	16
Finance costs	(12)	(3)
Right of use asset interest Tax received	(91) 76	- -
Net used from operating activities	(504)	(1,115)
Cash flows from investing activities
Purchase of property, plant and equipment	(4,089)	(1,106)
Net cash used in investing activities	(4,089)	(1,106)
Cash flows from financing activities
Net proceeds from issue of ordinary share capital	2,372	3,578
New loans raised	402	139
Loans repaid Repayment of leases	(75) (221)	(27) -
Net cash used in financing activities	2,478	3,690
Effect of exchange rate fluctuations	21	38
Net (decrease) / increase in cash and cash equivalents	(2,094)	1,507
Cash and cash equivalents at the beginning of the year	4,809	3,302
Cash and cash equivalents at the end of the year	2,715	4,809

 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

for the year ended 30 September 2020

	Share Capital £000	Share Premium £000	Share-based  Payments £000	Translation Reserve £000	Retained Earnings £000	Total Equity £000
At 1 October 2018	3,405	12,676	308	(385)	(10,925)	5,079
Issue of new shares	268	3,311	-	-	-	3,579
Share options	-	-	(34)	-	97	63
Exchange translation	-	-	-	113	-	113
Loss for the year	-	-	-	-	(1,136)	(1,136)
At 30 September 2019	3,673	15,987	274	(272)	(11,964)	7,698
At 1 October 2019	3,673	15,987	274	(272)	(11,964)	7,698
Issue of new shares	163	2,209	-	-	-	2,372
Share options	-	-	86	-	-	86
Exchange translation	-	-	-	(73)	-	(73)
IFRS 16 adjustment	-	-	-	-	45	45
Loss for the year	-	-	-	-	(1,291)	(1,291)
At 30 September 2020	3,836	18,196	360	(345)	(13,210)	8,837

Annual report and accounts 

The full annual report and accounts for the year ended 30 September 2020, including the basis for preparation and other explanatory notes, will be posted to shareholders in mid-February 2021 and will be available immediately thereafter on the Company's website (www.hardide.com). The announcement 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.

 

END

 

 

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