Companies: HDD ��

Bicester-based Hardide, a �20 million company, is one such concern. I first noticed this intriguing minnow when it joined AIM at 10p just over a year ago. The group owns a patented surface engineering technology that it has already advanced from the ‘proof of technology’ phase to commercialisation. In essence, the technology provides and applies tungsten carbide coatings to engineering components. The unique selling point lies in the fact that the technology combines both abrasion- and corrosion-resistant properties all in one coating.

Larger clients are warming to a series of advantages the technology has over other metal coating processes, such as increased metal surface hardness, improved wear characteristics, reduced friction on moving parts and the ability to attain higher quality surfaces at lower costs. Cost savings for its customers arise on reduced downtime for
critical components, giving increased longevity and requiring less maintenance.

Early mover advantages

Chief executive Jim Murray-Smith assures me the company is an early mover in massive markets. He enthusiastically talked me through encouraging half-time figures to the end of March, revealing sales of �1.1 million and moderate losses of �238,000, closing net cash of �1 million and the terrific news that its Bicester coatings plant had scored first trading profits.

The oil and gas sector was the real driver, accounting for some 75 per cent of sales as both UK and international business doubled. The valve and pump sectors have also seen improved business.

‘In the first half, we sold out the door just as much as during the whole of last year,’ boomed Murray-Smith, ‘and I can tell you that the oil and gas sector remains buoyant.’
Key strategic ties with major oil sector multinationals such as Schlumberger are boosting the volume of business from existing applications and many customers are trialling new applications which should yield further commercial orders over coming months.

BAE is good, but Texas could be key

The approved supplier status the group has snared in the aerospace arena with BAE Systems, for which it has completed its first commercial order to coat components for the Eurofighter Typhoon, has excited many souls. As have the ongoing discussions with several leading aircraft makers, expected to lead to further orders on the back of the BAE Systems breakthrough. ‘We are one of the smallest companies in the world and yet our clients are some of the biggest names around,’ enthuses Murray-Smith.

In the US, he is busting a gut to grab a bigger slice of the oil and gas market by setting up a manufacturing facility in Houston, Texas, ‘the world energy capital’, funded by a fairly recent �800,000 placing at 12.25p.

The new 17,000 square foot manufacturing facility opens in October and will eventually have double the capacity of Bicester, ‘and remember, the US market provides us with ten times the opportunity of Europe’, he pointedly adds.

Analysts suggest losses of �300,000 on drastically improved sales of �2.7 million this year, ahead of profits of �1.3 million from revenues of �6 million by September 2007. In my view, the 15p shares should not be ignored.

Hardide	AIM	�14.67m	10.00p	0.25p
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