30th Jan 2020 11:43
(Alliance News) - Shares in Haydale Graphene Industries PLC dropped on Thursday as it guided for sales in its current financial year to be below market expectations due to a weak first half in the US and UK.
Shares in the Ammanford-based graphene and nanomaterial manufacturer were 15% lower at 1.45 pence on Thursday in London.
During the six months to the end of December, Haydale took the decision to close its loss-making manufacturing facility in Taiwan and move to centres in Bangkok and Ammanford, the UK.
The relocation of operations is expected to cause a revenue shortfall of GBP410,000 for the second half of its year ending June 30 but have a positive effect on Haydale's earnings before interest, taxes, depreciation and amortisation.
In the US, Haydale business unit HCT reported a softer start to the year, with disappointing sales of silicon carbide whiskers and blends, as well as teething issues with the production of new blanks, leading to a delay in commissioning until November 2019.
As a result, HCT's sales for the first half will be lower year-on-year, and the ongoing slowdown in the aerospace industry means second half sales will not make up for the weaker first half.
In the UK, despite a rise in sales on a like-for-like basis, sales still fell below management expectations due to longer than expected lead times. Again, Haydale does not expect second half sales in the UK to recoup the shortfall from the first half.
"Whilst the decision to close Haydale Taiwan, the later than expected commissioning of the blanks line and the slowdown in the aerospace sector in the US has affected our short-term revenues, the directors remain committed to delivering the commercial priorities that we have set the group," said Chief Executive Keith Broadbent.
"The new global sales team is already delivering positive results with a strong pipeline of profitable opportunities being actively pursued," Broadbent added.
By Dayo Laniyan; dayolaniyan@alliancenews.com
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