21st May 2015 07:59
LONDON (Alliance News) - Hardide PLC saw its shares rise strongly early Thursday after it cut its losses in the first half of its financial year thanks to a strong rise in revenue, and said it had also made a strong start to the second half although it remains cautious short-term about the oil price fall.
The surface coatings company reported a pretax loss of GBP68,000 for the six months to end-March, compared with a GBP236,000 loss a year earlier, as revenue rose by over a third to GBP1.8 million from GBP1.3 million. It swung to a profit before interest, tax, depreciation and amortisation of GBP3,000, compared with a loss of GBP0.13 million a year earlier.
Hardide put the strong revenue increase down to rising demand from existing customers as well as new business wins. It still made an operating loss as it spent money on refurbishing a pre-treatment line and on business development and marketing.
At the end of March, it had announced that it won a one-year extension of its major supply contract with General Electric Co Inc to February 2017 and there remains an option to extend by a further five years. The one-year extension is worth USD0.7 million to Hardide.
Hardide said volumes were up 139% in North America in the first half thanks to the GE supply agreement, while sales also rose in the UK and Europe.
"We made a strong start to the second half. Looking ahead, and as previously reported, we are cautious in the short term about the potential impact of the fall in the oil price on demand from some customers. Nonetheless, Hardide is moving forward positively on many fronts and the Board remains confident about the longer-term prospects for the business," Chairman Robert Goddard said Thursday.
The company, which is also preparing to do work for aircraft manufacturer Airbus, is expanding its coatings capacity to meet demand. It now has a third large reactor operational in its UK plant, increasing capacity by almost half, and has scheduled the opening of a new US production facility for late 2015.
Hardide shares were up 7.5% at 1.29 pence early Thursday.
By Steve McGrath; [email protected]; @stevemcgrath1
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