Hardide has a novel tungsten carbide coating technology which improves the toughness and resistance to abrasion and corrosion of engineered components. End users operate in the aerospace, energy and manufacturing sectors.
The company has struggled to get the revenue line moving due to the slow pace at which new products and techniques are adopted in aerospace. The lengthy recession in the Oil & Gas sector has not helped either. However last year saw an increase of 42% in sales to £4.6m, helped by the rebound in Oil & Gas with high-volume orders being won.
Testing continues with Airbus components which is taking time, but once approved the programmes should continue for years.
Success is all about scale and utilisation rates. Adding more reactor vessels at its facilities and filling them on the back of an expanded order book is key. £3.6m has just been raised at 1.5p to fund a move to a larger site in the UK and the investment of £2m in more reactors. These have a one year lead time, which implies Hardide has sight of an upswing in orders.
There will also be a 1-for-40 share consolidation which will move the share price out of penny stock territory. Look out for news on orders, especially from Airbus.
Market cap: £26m
Share price: 1.6p
Current recommendation: Speculative buy
(Above data as at 22 February 2019.)