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Annual Report
2023
www.hardide.com
© Hardide plc 2024
Hardide plc Annual Report 2023
Hardide plc is the leading global innovator and provider
of advanced tungsten carbide coatings that significantly
increase the working life of critical metal components
operating in abrasive, erosive, corrosive and chemically
aggressive environments.
Hardide® is a family of nanostructured
and patented, low temperature CVD
(chemical vapour deposition) coatings
which provide exceptional wear and
corrosion resistance and uniquely
combine extreme toughness with
ductility. Our coatings are ‘value-adding’
to components and lower operational
costs by reducing downtime, increasing
productivity and improving performance.
They can be precision applied to
external and internal surfaces including
complex geometries, enabling a level of
engineering design flexibility not possible
with alternative technologies.
Hardide surface engineering technology
transforms the way that parts perform
under severe service conditions.
Previously, levels of friction, abrasion and
aggressive chemical attack have led to
part failure, downtime and extreme cost.
Our coatings are enabling customers in
high wear/high value industries including
energy, aerospace, flow control, power
generation and precision engineering
to optimise part life, improve product
performance and make significant
operating cost savings. The Group has
manufacturing facilities in Oxfordshire, UK
and Virginia, USA.
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Contents
Strategic Report
Highlights
Hardide Business Model
Hardide Strategy
Chair’s Statement
Chief Executive Officer's Report
Financial Review
Risk Review
Corporate Governance
Board of Directors
Report of the Directors
Corporate Governance Statement
Remuneration and Nomination Committee Report
Audit Committee Report
Environmental, Social and Governance
Financial Statements
Independent Auditor’s Report
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Cash Flows
Consolidated Statement of Changes in Equity
Notes to the Group Financial Statements
Parent Company Statement of Financial Position
Parent Company Statement of Changes in Equity
Notes to the Parent Company Accounts
Company Information
Directors and Advisers
4
6
7
10
14
18
20
24
26
29
34
36
38
41
46
47
48
49
50
67
68
69
72
4
Highlights
Highlights
Strategy
A two-step strategy:
1
Focus on becoming profitable and
cash generative as soon as possible
driven by increased sales to existing
and new customers, utilising proven
coating technology and existing
production capacity.
Investment case
2
Drive significant value for
shareholders and other stakeholders
over the medium to longer term
through further development and
commercialisation of the Group’s
unique, high performance coatings
technology, including co-operation
with other coatings companies.
1
2
3
A well invested business providing a strong platform for growth
§ Valuable, unique and patented coatings technology
§ Broad range of end use applications
§ Significant spare capacity in 2 plants (UK and USA) each only c.60% utilised
A pivotal time
§ Fresh leadership driving focus on acceleration in revenue growth, combined with
strong cost and cash control
§ Cultural evolution – from engineering led to commercially led
§ FY to Sept 23: Record revenues of £5.5m; close to EBITDA1 break-even; operating cash
positive for the first time
Significant business development and value creation potential
§ Shorter to medium term opportunities in oil & gas, aerospace, and industrial
applications
§ Medium / longer term opportunities in power generation, alternative energy,
green hydrogen production and storage, solar cell production: some potentially
transformational
§ High operational gearing and contribution margins, with significant profit and cash
drop through from additional revenues
1 EBITDA: Earnings before interest, tax, depreciation and amortisation
Highlights
5
5-year track record
Revenue (£m)
Cash flow before financing (£m)
2019
2020
2021
2022
2023
1
0
-1
-3
2019
2020
2021
2022
2023
Record revenues in FY23
-5
The business was cash flow positive for the first
time in FY23
EBITDA (£m)
2019
2020
2021
2022
2023
A close to EBITDA break-even performance in
FY23, a significant improvement on prior years
Capacity utilisation (%) and
capital expenditure
100%
50%
0%
2019
2020
2021
Capital utilisation %
2022
Capital expenditure
2023
A well invested business with spare capacity
6
4
2
0
0
-1
-2
Business and commercial highlights
§ Significant ongoing growth in commercial aerospace business
§ Developing new industrial / engineering customers following recent trials
§ Strong core oil & gas business with ongoing niche development potential
§ Early success and promising future for coating turbine blades in the power generation sector
§ Strategic potential in green energy, hydrogen production and hydrogen storage applications
§ Patentable technical developments ongoing to enhance Hardide coatings and broaden their
end use applications, supported by grant funding
§ Strong cost, cash flow and inflation management disciplines demonstrated, with an EBITDA
and cash benefit of c.£0.7m realised during FY23
§ Commercial relationships developing with global coatings companies to broaden market reach
§ More challenging trading conditions experienced in the first part of FY24
§ c.£0.75m of additional equity funding expected to be raised in February 2024 to support
Hardide's growth agenda and provide additional working capital headroom, with c.£0.25m of
further debt funding being sought
§ A new interim CEO, Steve Paul, formerly of Praxair Surface Technologies, joined on
12 February 2024
6
Hardide Business Model
Hardide Business Model
Shareholder
and
Stakeholder
Reward
Unique Patented Coating Technology
Commercialise
Existing
Enhance and Extend
into New Applications
Existing and New Customer Development
Well Above GDP Revenue Growth
Organisation/People Development
Operational Capacity Expansion
Net Margin Growth Through Operational Gearing
Significant Earnings Growth
Value Creation
Sound Environmental, Social and Governance Foundations
External and
Internally
Funded
Investment
Hardide Strategy
Hardide Strategy
7
Financial
Performance
EBITDA
break-even
Earnings per
share positive
Strong value
creation
Timeline
Organic
Partnerships
Inorganic
Short Term
Collaboration
with coatings
companies and
other strategic
partners
Medium Term
Value creation
through growth
driven by
business model
Longer Term
Potential
business
combinations,
market
consolidation,
synergy
Potential
for earnings,
enhancing
synergistic
acquisitions
8
Applications and End Uses
Applications and End Uses
§ Oil & gas directional drilling tools
§ Well stimulation tools
§ Oil & gas production components
§ Sand control systems
§ Eurofighter Typhoon canopy locking system
§ Airbus wing / flap components
§ F35 Joint Strike Fighter components
§ Helicopter transmission systems
§ Power generation steam and gas turbine blades
§ Aircraft door and control system actuators
§ Coating of industrial diamonds for wear parts
§ Undercarriage / landing gear
§ Hydrogen production and storage systems
§ General hard chrome & HVOF replacement
§ Silicon wafer production for solar cells
§ Aircraft engine blades
§ Production of EV batteries
§ Fuel cells
Energy
63% of Revenue
Aerospace
7% of Revenue
Industrial
30% of Revenue
Geographical
Areas
Served
§ North America
§ Europe
§ Severe service valves and pumps
§ Injection moulding extrusion
feeder screws and dies
§ Airport high speed X-ray screening machines
§ High volume positive displacement pumps
§ Rotors and shafts
§ Closed and open face impellers
§ Sleeve bearings
§ Hydrodynamic bearings
§ Complex 3D printed parts
Locations
9
Locations
Bicester, UK
20,000 sq. ft custom-
fitted production facility in
Oxfordshire, UK. Five coating
reactors are installed including
the reactor for the coating of
larger components up to 1.5m
in length. The site has Nadcap
Gold Merit status, and AS 9100D
and ISO 14001 accreditation.
Martinsville, USA
26,000 sq. ft. production
facility in Virginia, USA with
four standard size coating
reactors servicing customers
in the energy and industrial
sectors in North America.
The site holds ISO 9001 and
AS 9100D certification.
10
Chair's Statement
Chair's Statement
I am pleased to report another year of good progress for Hardide, with revenues moving ahead by
10% to £5.5m and the delivery of a close to EBITDA1 break-even profit performance.
The Board is focused on driving an acceleration in revenue growth, as adoption of Hardide’s unique
coating technology gains further traction across a diverse range of end use market applications.
Strategy
People and Board
The Board is executing a two-stage strategy:
1. Focus on becoming profitable and cash generative
as soon as possible. This will be driven mainly by
increased sales to existing and new customers,
utilising proven coating technology and existing
production capacity, thereby benefiting from Hardide’s
strong operational gearing.
We made good progress in FY23 in growing revenues
and recovering input cost inflation, whilst keeping
tight control of costs to deliver a close to EBITDA
break-even profit performance.
2. Identifying and taking opportunities to drive
significant value for shareholders and other
stakeholders over the medium to longer term
through further development and commercialisation
of the Group’s unique, high performance coatings
technology, including co-operation with other
coatings companies.
We entered into commercial agreements with two
global coatings companies during the last year
enabling all parties involved to benefit from the ability
to offer Hardide’s coatings to a broader international
customer base.
Business Development
The Board is focused on the realisation of numerous
business development opportunities available in the
short to medium term across various end market
sectors. In addition, our research and development
activities (much of which are supported by grant
funding) are intended to significantly enhance Hardide’s
coatings technology and its applications, and much
of our focus here is on green energy and in assisting
hydrogen generation and storage. Further details of these
opportunities are given in the Chief Executive’s Report.
On behalf of the Board I’d like to put on record our
thanks to all our loyal and committed employees for
their hard work and achievements, not least driving
the continued growth of the business to record levels
in FY23 in line with our strategic objectives against a
challenging market backdrop.
We were pleased to welcome Steve Paul as Interim Chief
Executive Officer on 12 February 2024. He will succeed
Phil Kirkham who announced his intention to step
down last November. Steve, formerly of Praxair Surface
Technologies, will bring a wealth of experience in general
management, commercial development and performance
improvement. We look forward to working with Steve
and to his contribution both to the business and the
Board.
The Board would like to thank Phil once again for the
immense contribution he has made to the development
of Hardide over the last decade, including significantly
broadening the customer base and leading the
establishment of our two modern and well invested
production facilities, all of which provide us with an
excellent platform for future growth.
We also welcomed Matt Hamblin to the Board in
November. Matt is the ex-CEO of Keronite, a coatings
company with many similarities to Hardide, where he led
its growth into profitability and then its successful sale
to a large global organisation last year. Matt’s insights
have already been highly valuable as we evolve and
refine our growth strategy.
These Board changes provide the opportunity to evolve
the leadership and culture of the business to become
more sales focused and commercially driven, and better
aligned with the Board’s determination to drive an
acceleration in revenue growth.
1 EBITDA: Earnings before interest, tax, depreciation and amortisation
Chair's Statement
11
Current Trading and Financing
Outlook
Hardide has experienced a slower than expected start to
the current financial year with a number of major OEM
customers de-stocking. This de-stocking effect has more
than offset the positive ongoing growth in aerospace
demand. The cost base has been re-aligned in mitigation,
and selling prices were increased in January 2024. Group
revenues in the four months to 31 January 2024 were
£1.3m compared with £1.9m in the equivalent prior year
period.
The Board announced in early February that it was
seeking £1m of additional funding through a combination
of equity and debt and now expects that c.£0.75m of
equity will be raised.
In light of this additional funding, the Board has prepared
the financial statements on a going concern basis, as it
expects the Group to have sufficient financial resources
to continue in operation for the foreseeable future. The
Financial Review includes a sensitivity analysis that
outlines possible future downside scenarios in which
the Group might require further funding. The Group
continues to seek a further £0.25m of debt finance to
increase headroom.
The Board’s expectation remains that revenues for the
full financial year to September 2024 will be broadly
in line with those of the year to September 2023, with
the benefits of a disciplined approach to costs coming
through such that we anticipate being EBITDA positive
for the year.
Whilst the global economic situation remains uncertain
and this has impacted trading in the first part of the
new financial year, Hardide is still a relatively early life
cycle business benefiting from unique and potentially
disruptive technology. This technology is steadily gaining
market acceptance and market share, enabling the
underlying business to continue to grow.
There are numerous business development opportunities
being pursued, detailed in the Chief Executive Officer’s
Report. We are focused on bringing these to fruition,
with sales to the aerospace sector in particular growing
significantly in the current financial year.
The Board therefore continues to believe that the
Group has the potential to generate significant value for
shareholders and all stakeholders over the medium to
longer term.
Andrew Magson
Non-Executive Chair
21 February 2024
12
13
Energy
Sales to energy customers increased by 21% to
£3.4m during FY23, including a 48% increase in
sales to oil & gas customers assisted by sales
of coated mesh sand screens.
It is a strategic objective for the Group to
increase the proportion of revenue generated
from the alternative energy sector.
Following the initial testing of several Hardide
coating variants at Cranfield University for
a process for the manufacture of ‘green’
hydrogen, the Group was successful in being
awarded an Innovate UK grant to progress
further this work.
14
Chief Executive Officer's Report
Chief Executive Officer's Report
Hardide generated record revenues for the year of £5.5m, an increase of 10% from FY22. Revenue
growth was led by a 21% increase from the energy sector, particularly from oil and gas customers.
However, this increase was tempered by the absence during the year of any repeat orders for
the coating of gas turbine blades and vanes. Volume aerospace orders for Airbus components
commenced in the final quarter of the year with a 100% increase in sales from this sector for the year
to become 7% of total revenues. Price increases were implemented across the customer base during
the year to recover cost inflation, particularly raw materials, energy and people costs.
The combination of price increases, revenue growth and cost reductions led to a significant
improvement in gross margins, which rose by ten percentage points to 47.5% from 37.5% in the prior
year. This enabled us to deliver a close to break-even EBITDA performance, compared with the prior
year equivalent of a £0.9m EBITDA loss.
Operational Overview
Customers and Markets
The mix of revenue from our main market segments
during the year was:
§ Energy: 63% (including oil & gas and power generation)
§ Industrial: 30%
§ Aerospace: 7%
Energy
Sales to energy customers increased by 21% to £3.4m
during FY23, including a 48% increase in sales to oil &
gas customers assisted by sales of coated mesh sand
screens. This was offset by a reduction of £0.5m in
power generation sales compared to FY22, as previously
expected orders for the coating of gas turbine blades
were delayed due to engineering modifications of the
turbine.
Further progress has been made in diversifying the
oil & gas customer base with sales spread across a
broadening number of customers and with not one
dominating this segment’s revenue. Towards the end of
FY23, the Group started to experience some softening
in demand from oil and gas customers, and this has
impacted the first few months of FY24. We believe this
reflects reassessment of inventory levels by customers
as global supply chains normalise post the COVID
pandemic; a reduction in the number of active US land
drilling rigs; and the full cessation of supplies to Russia
to comply with US and international sanctions.
The large oil service companies continue to talk about
the industry being at the start of a long-term ‘up cycle’
for oil and gas exploration and production. With the oil
price climbing recently on the back of OPEC+ production
cuts and international events, the medium-term future
looks positive for supplying to this sector.
Alternative Energy
It is a strategic objective for the Group to increase the
proportion of revenue generated from the alternative
energy sector. Promising progress with development
projects is being made, particularly in hydrogen
applications.
Following the initial testing of several Hardide coating
variants at Cranfield University for a process for the
manufacture of ‘green’ hydrogen, the Group was
successful in being awarded an Innovate UK grant to
progress further this work. This project commenced
in November 2023 and is to be completed within 17
months. The initial test results and further details are
confidential to maintain potential patentability of the
application.
In another hydrogen application, an independent
laboratory is currently testing the permeability of the
Hardide coating to provide quantitative data on how
good a barrier the coating is in preventing hydrogen from
diffusing into metal components and causing cracks.
Subject to positive results, this would open up a large
range of opportunities for Hardide coatings in hydrogen
storage and distribution applications.
Power Generation
The expected production orders for the coating of gas
turbine compressor blades from Ansaldo Energia in Italy
were not received in the financial year as engineering
modifications are in progress on the turbine itself. In
parallel, the first two turbines containing Hardide coated
blades are in the final stages of commissioning and the
performance data of these blades is being gathered. This
data will undoubtedly be a factor in proving the benefit
of the Hardide coating and in gaining future business.
Testing is also underway with this customer on new
applications / materials for a different turbine.
The work with EDF Energy on use of the coating on
steam turbine blades to prevent water droplet erosion
has not progressed during the year due to other priorities
within the EDF engineering team. It is hoped that this
work will be restarted during the coming 12 months.
Extensive technical work and testing has been done by
another global steam and gas turbine manufacturer with
positive results. Discussions are now underway regarding
potential applications.
Currently, the Group is working on developments and
trials with other global steam and gas power generation
turbine manufacturers, both in the UK and overseas.
Chief Executive Officer's Report
15
Industrial
Revenues decreased in this sector by 15% from FY22.
This was due to 22% lower sales to our major industrial
pump customer in North America who returned to a
usual level of demand following re-stocking after high
sales during the COVID pandemic period. However,
there was an increase in revenue from the airport X-ray
scanner manufacturer as their production increased. In
addition, developments and trials are still underway with
the large US-based EV manufacturer on components
used in the vehicle battery production process. Trials and
testing are also ongoing on new battery technology and
fuel cell applications with a major organisation in the Far
East.
Aerospace
Aerospace sales doubled during FY23 to 7% of
total Group revenue, with regular volume demand
commencing in the last quarter of the year from Gardner
Aerospace to coat components for the Airbus A320/A321
aircraft. This level of demand is based on Airbus’ current
production rate of c.50 A320/A321 being produced per
month. Airbus’ plan is to gradually increase this rate to
65 aircraft per month by end 2024 and to 75 by 2026
indicating that demand on the Group will also increase.
Additionally, orders were received from other Tier 1
companies for the lower volume A330, A380 and A400M
applications. Airbus and their Tier 1 suppliers continue to
gain confidence in the Group to provide a quality coating
together with excellent levels of service, and as a result
there are further parts currently in development and
testing.
Orders continue to be received for the coating of
BAE Eurofighter Typhoon components. In addition, an
increase in demand for parts for Lockheed Martin’s
F35 Lightning II fighter was seen in FY23. Technical
trials are now underway with a major civil and military
helicopter manufacturer in the US. We continue to work
with several other OEMs and maintenance, repair and
overhaul (MRO) companies for applications including
landing gear, door mechanisms and peripheral engine
components.
During the year the Group received full supplier approval
from Leonardo Helicopters ('Leonardo') to coat flying
parts. Production orders are for components used in
helicopter gearbox transmission systems and are part
of an existing engine upgrade. The Hardide coating
will reduce ‘in-service’ costs and extend component
life. Leonardo is one of the UK's leading aerospace
companies and one of the biggest suppliers of defence
and security equipment to the UK Ministry of Defence.
This approval is expected to open other opportunities
within the wider Leonardo Group and the broader
helicopter market.
Technical discussions on replacing chrome plating on
components are also underway with another major
aircraft manufacturer based in the US.
Hardide coatings are being used increasingly as a
substitute for hard chrome plating (HCP) and thermal
spray coatings. The EU and UK Reach regulations
currently have an end date of April 2024 for the use
of the toxic hexavalent chromium chemicals used in
the production of HCP. As this date rapidly approaches
many companies are turning to Hardide coatings as a
replacement. Thermal spray coatings are less corrosion
resistant and more prone to cracking under deformation
than are Hardide coatings.
Health & Safety
I am pleased to report that there were zero lost time
incidents across the Group during the year. Regular
audits and inspections are performed by external bodies
at both sites and continuous improvements are being
made because of these.
Accreditations and Research & Development
Hardide’s UK site is accredited to Nadcap Gold
Merit status, the highest accreditation available for
commitment to continual improvement in aerospace
quality. Both the UK and the US sites are accredited to
aerospace quality standard AS9100 RevD and to ISO9001.
The UK site is certified to environmental standard
ISO14001, while the US site complies with all local, state
and federal environmental standards.
Fundamental experimental work on the development of a
new coating variant with additional properties that would
open new markets for Hardide has been completed.
Preliminary assessment has shown this coating could be
patentable. Further development work will be necessary
to scale-up and characterise the coating and the Group
is continuing to look to secure grant funding for this.
Intellectual Property
Our most recent patent covers the enhanced Hardide
coating with improved mechanical properties and its
new applications, including turbine blades and vanes.
This had been previously granted in the UK and this year
we received new grants of the patent in the USA, China,
India and South Korea. Registration of the equivalent
patent is progressing in other leading industrial
countries.
16
Chief Executive Officer's Report
Business Development
We are focused on realising a number of shorter-term
business development opportunities to grow revenues to
a level where the business becomes cash positive and
fully profitable for the first time.
Hardide is a well invested business with operational
capacity for sales of around £10-11 million a year,
approximately double FY23’s revenues. With this spare
capacity available and high operational gearing such
that a high proportion of incremental revenues convert
into profit and cash, we estimate that Hardide will
become cash generative at revenues of c.£6.2m and fully
profitable / earnings per share positive at revenues of
c.£7.5m.
The principal shorter-term business development
opportunities being progressed are:
§ Additional Airbus parts
§ High volume consumable components for thermal
spray equipment
§ Steam and gas turbine blades and vanes
§ Couplers for land-based oil production pumps
Technical and commercial collaboration is well underway
with various international coating companies who have
complementary ranges of coatings with the aim of
enhancing the range of materials and components to
which our coating be applied, as well as approaching
the market with joint solutions for difficult industrial
applications.
Current Financial Year Trading
Having managed the business to a broadly EBITDA and
stable cash flow position in FY23, trading in the first four
months of the current financial year has been impacted
by some of our major customers de-stocking. So far, this
has more than offset the continuing strong growth in
our aerospace business that began in the final quarter of
FY23. Group revenues in the four months to 31 January
2024 were £1.3m compared with £1.9m in the equivalent
prior year period. We have taken action to reduce costs
and improve cash flows accordingly. In addition, selling
prices were increased by an average of 5% in January
2024.
After discussing anticipated forward order schedules
with major customers and updating our forecasts,
including building in the impact of the recent cost
reductions and selling price increases, the Board believes
that revenues for the year to 30 September 2024 will be
broadly in line with the previous financial year. In view of
the reduced cost base this should enable the Group to
deliver a positive EBITDA performance for the year.
Philip Kirkham
Director and CEO until 11 February 2024
21 February 2024
Industrial
There was an increase in revenue from the airport
X-ray scanner manufacturer as their production
increased.
Developments and trials are still underway with the
large US-based EV manufacturer on components
used in the vehicle battery production process.
Trials and testing are also ongoing on new battery
technology and fuel cell applications with a major
organisation in the Far East.
18
Financial Review
Financial Review
Income Statement
Hardide grew during FY23 to report record revenues of £5.5m (FY22 £5.0m), an increase of 10% year on year.
We were successful in recovering significant input cost inflation (in particular process gas, energy and people costs) into
selling prices during the year. This, combined with strong cost controls and increased capacity utilisation which allowed
better recovery of factory fixed costs, led to a 10 percentage point uplift in gross profit margins to 47.5% (FY22: 37.5%).
Overheads of £2.9m were well controlled and were held to similar levels as in the prior year, despite the growth in the
business and cost inflationary pressures.
Overall, this enabled Hardide to significantly reduce its EBITDA loss from £0.9m in the prior year to just £0.1m in FY24.
Total depreciation charges of £0.9m were some £0.3m lower than in the prior financial year, mainly because Hardide is a
well invested business with spare capacity with depreciation comfortably exceeding capital investment during the year.
This position is expected to continue for the foreseeable future. In addition, we reviewed the useful lives of some of our
reactors. In view of these reactors’ prior utilisation levels and their current condition we concluded a 15 year expected life
was now more appropriate than the previously assessed 10 years. The impact has been to reduce the depreciation charge
in the year and increase the net book value of plant and machinery by £0.2m.
As a result of all the above, Hardide more than halved its operating loss from £2.1m in FY22 to £1.0m in FY23.
EBITDA is a key financial performance indicator used by management to assess the operational performance of the Group.
This may be reconciled to the Income Statement as follows:
Operating loss
Depreciation, amortisation and impairment of owned assets
Depreciation and amortisation of right of use assets
EBITDA
2023
£m
(1.0)
0.7
0.2
(0.1)
2022
£m
(2.1)
0.9
0.3
(0.9)
Net finance costs of £0.2m were slightly higher than in the prior year, mainly reflecting the new extended lease on the
Martinsville facility in the USA.
Therefore, the loss before tax for the year of £1.2m also broadly halved compared with prior year levels of £2.3m, as did
the loss per share of 1.9p (FY22: 3.9p).
Cash Flow
Hardide’s cash flow for the year can be summarised as follows:
£m
EBITDA
Reduction in working capital
Other operating cash items
Operating cash flow
Capital expenditure
Business cash flow before financing
Proceeds from sale and leaseback
Net loan and lease repayments
Equity finance
Net cash flow for the year
Year to 30 Sept 2023
Year to 30 Sept 2022
(0.1)
0.4
(0.1)
0.2
(0.1)
0.1
0.5
(0.6)
-
(0.9)
-
-
(0.9)
(0.3)
(1.2)
-
(0.2)
0.5
(0.9)
Financial Review
19
Hardide’s overall cash performance for the year was break-even, representing a significant improvement from the £0.9m
cash outflow in the prior financial year. This reflected the close to EBITDA break-even trading performance, together with
strong control of both working capital and capital spend.
Therefore, we began and ended the financial year with net cash resources of £0.7m.
Much work was done during the year to improve working capital efficiency, including consignment stocking arrangements
and strong credit control.
The one-off cash benefit arising from the Martinsville lease transaction of £0.5m was largely used to repay existing
financing and lease obligations.
Balance Sheet, Capital Structure and Net Debt
The main changes in the Group balance sheet over the year were:
§ a reduction in the net book value of property, plant and equipment by £0.8m to £4.6m, as depreciation exceeded capital
expenditure; and
§ a reduction in current assets by £0.5m to £2.1m due to improved working capital efficiency as described above.
Therefore, total assets decreased by £1.3m to £8.4m.
Total equity / shareholders’ funds decreased over the year from £5.5m to £4.3m, largely reflecting the loss after tax for
the year.
Hardide’s net debt (including lease liabilities) was largely unchanged year on year at £2.3m. This comprised cash of £0.7m
(2022: £0.7m), loans of £0.7m (2022: £1.0m) and lease liabilities of £2.3m (2022: £2.0m). As described above, the new lease
on the Martinsville facility helped refinance some existing financial obligations that were repaid when due.
Recent Trading and Financial Position
The challenging trading conditions in the first four months of the financial year referred to in the Chair’s and Chief
Executive’s statements led to a significant reduction in the level of cash available to the Group by January 2024 compared
with the £0.7m reported at the last financial year end. Costs were reduced accordingly and further equity funding of
c.£0.75m is expected to be raised in February 2024.
Funding and Going Concern
The directors have adopted the going concern basis in preparing the financial statements in the expectation that c.£0.75m
(net of costs) of additional equity finance will be raised shortly, and after assessing the principal risks and considering the
impact of various downside scenarios to the Group’s base case financial plans, including latest sales expectations and
profit margins for the period to March 2025.
The Board is continuing to seek a further £0.25m in debt finance to increase financial headroom and resilience.
In light of the above, the Board expects the Group to have sufficient financial and other resources to continue to operate
as a going concern for the foreseeable future, but in reaching that conclusion the Board is mindful of the following key
sensitivities which, should they occur, would cast significant doubt on that conclusion:
(a) There is a material shortfall in the anticipated c.£0.75m net proceeds realised from the anticipated equity fundraise; or
(b) Substantially all of the c.£0.75m net proceeds from the anticipated equity fundraise are realised, the ongoing initiatives
to secure c.£0.25m of additional debt are not successful, and the Group does not achieve its base case sales forecast
by c.15% or more; or
(c) Substantially all of the c.£0.75m net proceeds from the anticipated equity fundraise are realised, the ongoing initiatives
to secure c.£0.25m of additional debt are successful, and the Group does not achieve its base case sales forecast by
c.20% or more.
Accordingly, the Board has concluded that it remains appropriate to prepare the financial statements on a going concern
basis, but that this is subject to material uncertainty as outlined above.
Further details are set out in Note 1 to the financial statements.
Simon Hallam
Finance Director
21 February 2024
20
Risk Review
Risk Review
A summary of the Group’s key risks and how these are managed is provided below.
Risk and analysis
Mitigation and control
Residual risk
Economic and geopolitical
Changes in economic conditions (including
those caused by geopolitical factors),
particularly in the UK, USA and Europe
and those impacting the oil & gas sector,
could significantly impact Group revenues,
profits and cash flows
Supply chains remain unpredictable and
this can cause volatility in short term
demand patterns as customers adjust
their stock holding levels accordingly
Current forecasts anticipate low levels
of economic growth in the shorter term,
with risks of modest recession in the key
markets in which we operate
Funding
To date the Group has been loss-making
and therefore remains dependent
on outside sources of finance until
we achieve our strategic objective of
becoming cash generative as soon as
possible
Should such funding not be available, the
viability of the Group would come into
question
Business development and revenue
uncertainties
There is a high level of uncertainty as
to the degree of success of business
development initiatives and the timing of
new work wins. Many potential customers
require significant testing and pre-
approval work before awarding new work
to Hardide
The Group has very limited (circa
one month) order book visibility and
has no longer term contractual sales
commitments. End customers often
buy from us via sub-contractors. All this
makes revenue forecasting in Hardide
challenging and can lead to short term
volatility in revenues
This risk is largely outside the Group’s control
High
The Board monitors closely relevant economic,
industry and customer forecasts, sets / adapts
business plans and takes action accordingly
Strong cash and cost management disciplines are
embedded in the business
High/Medium
Cash flow statements and forecasts are prepared
at least monthly, with sensitivity analyses regularly
reviewed by the Board and action taken accordingly
Strong relationships and regular communication
is maintained with key institutional and private
shareholders
Track record of shareholder support for, and belief in,
the business as it continues to develop
Much of this risk, particularly customer timing, is
beyond the Group’s control
High/Medium
Careful prioritisation and internal probability analysis is
undertaken before committing scarce Group resources
to development projects
Up front development costs mitigated / offset as far
as possible through customer and / or grant funding
Business development team focus on obtaining and
updating customer demand information (direct and
indirect) on an ongoing basis
Adequate cash buffers sought / maintained to enable
short term demand fluctuations to be managed
Risk Review
21
Risk and analysis
Risk and analysis
Customer concentration
Credit
Customer concentration is improving but
remains relatively high. Three customers
Potential losses caused by non-payment
currently account for more than 10% of
of debts owed to the Group
sales. Therefore, short term changes in
demand patterns for major customers
(particularly, de-stocking or re-stocking)
can have a material impact on short
term revenues, and the loss of a major
customer would be significant to the
Group’s performance
Mitigation and control
Mitigation and control
No history of material credit loss.
Our business development managers and CEO retain
close contact with all customers and potential
Pre-approval credit checks for new customers and
customers
credit limit checks prior to despatch of goods
Once the Hardide coating technology has been
Robust credit control disciplines, good DSO
rigorously tested and proven to provide a specific
performance
solution to meet customer needs, project business
Negotiation of credit terms including payments in
tends to be retained provided service remains strong
advance for some customers and where there is
as switching costs can be high. There can be some
history of late payment
natural loss of business (“churn”) as specific projects
come to an end
The Group has little control over short term demand
volatility
Residual risk
Residual risk
Medium/low
High/Medium
Loss of key employees
Hardide has a workforce of c.45 people
across two operating locations. The unique
nature of our coating technology and
production process, together with the
small size of the company, means know-
how in many roles is key
Loss of an operational site
Hardide has two factories, one in the
UK and one in the USA. Loss of either
would be significantly detrimental to the
Group’s performance, albeit much work
is interchangeable between sites and we
have spare capacity at both
Neither site is exposed to unusual or
specific natural resource or climate risks
(fire, flood, hurricane, drought etc)
IT and cyber security
The Group’s operations could be impacted
by IT failures or cyber security breaches
Product failure / warranty
Risk of liabilities / losses incurred from
third party claims relating to product
defect or failure
We have a loyal workforce, many of whom are long
serving
Medium
The Group culture fosters regular communication,
openness, with management team and employee
involvement
Professional internal operating disciplines, health &
safety procedures, and quality standards maintained at
both sites (ISO9001 and AS9100,). The UK site also has
ISO14001 and NADCAP accreditations
Medium
Regular fire risk inspections and tests with
recommendations implemented
Preventative maintenance regimes
Insurances held by Hardide and its landlords provide
monetary mitigation
The Group has both internal and outsourced IT
support capability. Cyber security is managed by an
external party and the Group holds the UK government
sponsored Cyber Essentials Plus certification
Medium
Disaster recovery plans in place and tested
Medium/low
Extensive testing and certification programmes,
working together with customers, largely mitigate this
risk and therefore Hardide has a strong product quality
record. Hardide does not warrant the performance of
the coating in use, only that it meets the described
technical properties
Standard trading terms seek to limit Hardide's liability
to the coating price paid for the parts supplied on
the basis that parts are supplied to customers'
specifications
Product and public liability insurance is in place
2222
Aerospace
Aerospace sales doubled during FY23 to 7% of total Group revenue,
with regular volume demand commencing in the last quarter of
the year from Gardner Aerospace to coat components for the
Airbus A320/A321 aircraft.
Orders continue to be received for the coating of BAE
Eurofighter Typhoon components. An increase in
demand for parts for Lockheed Martin’s F35
Lightning II fighter was seen in FY23.
During the year the Group received full
supplier approval from Leonardo
Helicopters to coat flying parts.
Technical discussions on replacing
chrome plating on components
are also underway with
another major aircraft
manufacturer based
in the US.
23
24
The Board of Directors
The Board of Directors
Andrew Magson
Chair
Andrew was appointed as Chair in October 2022. He is chair of the Audit Committee and a member
of the Remuneration and Nomination Committee.
Andrew has more than 15 years’ experience serving on the Boards of UK public companies in the
engineering, building and industrial manufacturing sectors. He was Executive Director, CFO and
Company Secretary of The Alumasc Group plc between 2006 and 2020 where he worked with
the Board to deliver Alumasc’s strategic transformation from a diversified industrial group into
a growing, sustainable building products business. Prior to that, Andrew was Group Financial
Controller at BPB plc, where he also worked internationally in M&A and operations at the time when
BPB grew to become a FTSE 100 company.
Andrew spent his earlier career at PwC in London where he qualified as a Chartered Accountant,
gaining significant corporate finance, audit and corporate governance experience. He holds a
Business degree from The University of Bath.
Current external appointments: Non-Executive Director and Chair of the Audit Committee at Renold
plc. Pension Trustee and Chair of the Pension Investment Committee at The Alumasc Group plc.
Stephen John Paul
Interim Chief Executive Officer
Stephen was appointed Interim CEO on 12th February 2024.
Stephen has a successful 30-year international career in various managing director, commercial
development and performance improvement roles for the leading global surface treatment
business, Praxair Surface Technologies, now part of the Linde Group. Since 2018, he has led his own
consultancy business, Sketchley GmbH, where he has advised a number of coatings companies,
including Hardide Coatings, on strategic, business development and operational improvement
projects. Prior to joining Hardide Coatings, he worked with the company for several months on
the development of sales of coated consumable parts to be supplied direct to end use customers.
Stephen holds a Master’s degree in Metallurgical Engineering from the University of Sheffield.
Current external appointments: Director of Sketchley GmbH
Simon Andrew Hallam
Finance Director
Simon was appointed Finance Director on 20th April 2020. Simon is Company Secretary.
Simon has over 20 years’ experience in senior finance roles within industrial manufacturing and
engineering companies. He joined from the Doncasters Group, a leading international engineering
company, where he was Finance Director of the UK business in the Industrial Gas Turbine Division.
Prior to that, he was with IMI plc for nine years as Finance Director of the UK business within the
Precision Engineering Division. He was Company Secretary of IMI Precision Engineering Ltd for
seven years and of Norgren Limited for five years. He started his career with KPMG where he spent
11 years. Simon holds a BA (Hons) in Accountancy and is a Chartered Accountant and Fellow of the
Institute of Chartered Accountants in England and Wales.
Current external appointments: None
Dr Yuri Nikolaevich Zhuk
Technical Director
Yuri is a co-founder and Technical Director.
Yuri started his career as a scientist and has more than 25 years of successful international
technology business experience in advanced materials. He holds an MSc (with Distinction)
in Physics and a PhD degree in Plasma Physics and Chemistry from the Lomonosov Moscow
State University, and an MBA from the Open University in the UK. Yuri managed the Company’s
CVD coating technology development from early laboratory stage to the aerospace-approved
manufacturing technology now used by blue chip customers. He has participated in several
fundraisings from the first seed capital round to the Hardide plc listing on the London Stock
Exchange AIM market. As Technical Director, Yuri is responsible for all aspects of development
of the Company’s technology. He is the author of patents and numerous scientific and technical
publications and has presented Hardide’s technology at leading international conferences. Yuri
brings in-depth knowledge of advanced coatings and surface engineering technology, proven
expertise in management of R&D and commercialisation of advanced materials, technology start-
ups, patenting and intellectual property management.
Current external appointments: In 2019, Yuri was appointed a Visiting Fellow and a Recognised
Teacher at the Cranfield University School of Aerospace, Transport and Manufacturing.
The Board of Directors
25
Philip David Kirkham
Director
Philip was appointed as a Director on 1st September 2012.
Philip was Chief Executive Officer of Hardide plc from 1st September 2012 to 11th February 2024.
Following the appointment of Stephen Paul as Interim CEO, it is the intention that Philip will retire
as a Director after a short handover period. Philip has an executive general management career
spanning more than 40 years, the last 30 years at board level in companies predominantly within
the metals and engineering sector. His career includes Manufacturing Director at DSF Refractories,
Divisional Managing Director at MS International plc, Senior Vice President Metals Division at Firth
Rixson Ltd, Executive Vice President at Rolls-Royce plc and CEO of Materials Advantage Group. Prior
to this he held senior operational roles at the British Steel Corporation and Sheffield Forgemasters.
He holds a BSc in Chemical Engineering from the University of Manchester and an MSc in Advanced
Manufacturing Management. Philip is a Chartered Engineer, European Engineer and Fellow of the
Institution of Mechanical Engineers. He brings a wealth of knowledge and experience in engineering
and manufacturing industries as well as international, general and commercial management
experience.
Current external appointments: None
Timothy Julian Rice
Non-Executive Director
Timothy was appointed Non-Executive Director on 20th March 2018. Tim is chairman of the
Remuneration and Nomination Committee, a member of the Audit Committee and is Senior
Independent Director.
Tim brings more than 30 years of experience in the aerospace and defence sectors, having held
senior executive positions with companies such as Vector Aerospace, Safran Group, Spirent and
Dowty. He is an experienced advisor to companies in the aerospace and defence sectors, involved in
strategy, business development, partnering, and organisational change. Tim holds a BSc in Mechanical
Engineering and has an MBA from Warwick University.
Current external appointments: Trustee – Insight Gloucestershire, Director – The International Centre
for Birds of Prey
Andrew Richard Boyce
Non-Executive Director
Andrew was appointed Non-Executive Director on 12th June 2012.
Andrew represents a significant family shareholding in the Group's issued share capital: the family
having been an investor in the Group since 2003. He has a deep knowledge and understanding of
the Hardide business. He has significant experience as a director on multiple boards and adds an
informed and challenging dimension to the Board. Since 1987, Andrew has been involved in the
management and growth of numerous family businesses. These encompass farming, property
and other commercial activities. After graduating in 1984 with a Diploma in Agriculture and Estate
Management from the Royal Agricultural College, Cirencester, Andrew worked in commercial property
sales and lettings, and development site appraisals and acquisitions.
Current external appointments: Director of a number of farming and property companies. Other
appointments include non-executive director of TDCM Ltd, manufacturer of electric motors for the
automotive sector, electric two-wheeler and leisure markets, where he is chair of the Remuneration
and Nominations Committee.
Matthew Roger Hamblin
Non-Executive Director
Matthew was appointed Non-Executive Director on 1st November 2023. He is a member of the
Remuneration and Nomination Committee and of the Audit Committee.
Most recently, Matt was Chief Executive Officer at Keronite, an advanced coatings and surface
treatment company, where he led its growth into profitability and its subsequent sale to the Curtiss-
Wright Corporation in November 2022. He has prior experience in a variety of sales and commercial
leadership roles. He is currently Commercial Vice President of Nyobolt, a high-performance battery
and charging technology company.
Current external appointments: Commercial Vice President, Nyobolt
26
Report of the Directors
Report of the Directors
Results
The Group loss for the period, after taxation, amounted to £1,118,000 (2022 £2,188,000 loss). The directors have declared
that no dividends will be paid in respect of the 2023 financial year (2022: Nil).
Directors
The membership of the Board during the year ended 30 September 2023 and changes to the board and the beneficial
interests of the directors and their families in the shares of Hardide plc are shown below.
Appointed
Resigned
30 September 2023
Number of ordinary
4p shares
30 September 2022
Number of ordinary
4p shares
Andrew Magson
24 October 2022
Andrew Boyce
18 June 2012
Tim Rice
20 March 2018
Philip Kirkham
1 September 2012
Yuri Zhuk
14 March 2005
Simon Hallam
21 April 2020
24,549
1
27,625
183,461
190,420
10,526
-
1
27,625
183,461
190,420
10,526
In addition to the share Andrew Boyce holds in his own name, he also represents family and associated entities totalling
7,830,335 shares. No director had, during or at the end of the year, a material interest in any contract which was
significant in relation to the Group’s business.
The Group’s key management personnel comprise the directors and senior managers who report to the CEO.
Directors’ interests in share options
The Group has share option schemes under the terms of which certain directors are able to subscribe for ordinary shares
in Hardide plc. Details of the directors’ interests in share options are shown in Note 18 to the Group accounts.
Directors’ responsibilities for the financial statements
The directors are responsible for preparing the Strategic Report, Directors’ Report, and the financial statements in
accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors
have elected to prepare Group financial statements in accordance with applicable law and UK adopted international
accounting standards and the parent Company financial statements in accordance with applicable law and United
Kingdom Accounting Standards, including Financial Reporting 101 ‘Reduced Disclosure Framework’ (United Kingdom
Generally Accepted Accounting Practice). Under company law, the directors must not approve the financial statements
unless they are satisfied that they give a true and fair view of the state of affairs of the Group and of the Company and of
the profit or loss of the Group for that period. In preparing these financial statements, the directors are required to:
§ select suitable accounting policies and then apply them consistently;
§ make judgements and accounting estimates that are reasonable and prudent;
§ prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group will
continue in business; and
§ state whether applicable UK adopted international accounting standards have been followed, subject to any material
departures disclosed and explained in the financial statements.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group’s
and Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Group and
Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are
also responsible for safeguarding the assets of the Group and Company and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
The directors are responsible for the maintenance and integrity of corporate and financial information included on the
Group’s website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements
may differ from legislation in other jurisdictions.
Report of the Directors
27
Statement of disclosure of information to auditors
Each of the persons who is a director at the date of approval of this report confirms that:
§ so far as the director is aware, there is no relevant audit information of which the Group’s auditor is unaware, and
§ the director has taken all steps that they ought to have taken in order to make themselves aware of any relevant audit
information and to establish that the auditors are aware of that information.
Going Concern
The directors have adopted the going concern basis in preparing the financial statements in the expectation that c.£0.75m
(net of costs) of additional equity finance will be raised shortly, and after assessing the principal risks and considering the
impact of various downside scenarios to the Group’s base case financial plans, including latest sales expectations and
profit margins for the period to March 2025.
The Board is continuing to seek a further £0.25m in debt finance to increase financial headroom and resilience.
In light of the above, the Board expects the Group to have sufficient financial and other resources to continue to operate
as a going concern for the foreseeable future, but in reaching that conclusion the Board is mindful of the following key
sensitivities which, should they occur, would cast significant doubt on that conclusion:
(a) There is a material shortfall in the anticipated c.£0.75m net proceeds realised from the anticipated equity fundraise; or
(b) Substantially all of the c.£0.75m net proceeds from the anticipated equity fundraise are realised, the ongoing initiatives
to secure c.£0.25m of additional debt are not successful, and the Group does not achieve its base case sales forecast
by c.15% or more; or
(c) Substantially all of the c.£0.75m net proceeds from the anticipated equity fundraise are realised, the ongoing initiatives
to secure c.£0.25m of additional debt are successful, and the Group does not achieve its base case sales forecast by
c.20% or more.
Accordingly, the Board has concluded that it remains appropriate to prepare the financial statements on a going concern
basis, but that this is subject to material uncertainty as outlined above.
Further details are set out in Note 1 to the financial statements.
Longer Term Viability
The directors have assessed the prospects of the Group, and the risks facing it, both as described more fully in the
Strategic Report. The Group’s financial planning period is three years and, in the Directors’ judgement, subject to the
uncertainties described above, in the Financial Review and in Note 1 to the financial statements, there is a reasonable
expectation that the Group will continue to be viable over that period and beyond.
Substantial shareholders
At 31 December 2023 the following shareholders had a disclosable interest in 3% or more of the nominal value of Hardide
plc’s shares:
Canaccord Genuity Wealth Management (Institutional)
Andrew Boyce & Associates
Executors of A Badenoch & Associates
Amati Global Investors
P Evershed
Unicorn Asset Management Ltd
Interactive Investor (Private Clients)
Hargreaves Lansdown
T Simpkin
Killik & Co
Shareholding
8,299,415
7,830,336
5,433,333
4,521,963
3,724,466
3,179,608
2,973,113
2,617,252
2,265,850
1,764,947
%
14.1
13.3
9.2
7.7
6.3
5.4
5.1
4.4
3.9
3.0
28
Report of the Directors
Section 172
The way in which the Board has performed their duties under section 172(1) of the Companies Act 2006 is set out below:
Likely consequences of any decision in the long term
The directors and senior managers participate in the Group’s strategic planning process. There is an annual strategic
planning meeting that looks out over three years. Progress against the strategic plan is reviewed by the Board regularly
and adapted if needed.
Act in the interests of the Group’s employees
The CEO holds monthly “Town Hall” staff briefings, incorporating a Q & A session and improvement proposals from staff.
Towards the end of the financial year, the Group carried out its first employee engagement survey, and has already
implemented several actions identified as part of this survey.
In October 2023, an incentive scheme was put in place for all employees to earn a bonus, contingent upon the Group
achieving a positive EBITDA result. Staff were provided with a briefing and training in how they can achieve this.
In addition to their salary, staff enjoy regular health checkups and healthcare insurance. Grievances may be raised in
confidence with any director. The Group’s offices and production area provide an attractive space and there is adequate
space in which to work. An indication of this may be found in a video of the new facilities on the website.
Foster the Group’s business relationships with customers, suppliers, shareholders and other providers of funding
The Group maintains regular contact with key customers, working closely with them to adapt Hardide’s technology to
meet their needs and solve problems. Likewise, the Group co-operates closely with its key suppliers.
The most critical ‘bought-in’ supplies for production are electricity and the gases used in the coating process. Together,
these account for the majority of variable production costs. Internationally, the primary process gas is deemed to be a
strategic material. Since electricity is a commodity, the Group reviews regularly its supply arrangements. It has not been
found useful to develop a relationship with any particular supplier of electricity, but the Group works frequently with its
energy broker.
The Group is grateful for the continued support from shareholders in funding the business as it develops towards
cash break-even. The CEO, Finance Director and Chair either meet with or make themselves available to meet with
shareholders at least twice a year as part of the Group’s interim and annual results presentations. Shareholders are also
able to meet the Board and ask questions at the AGM.
Close relationships are also maintained with the Group’s bankers, landlords and providers of asset finance.
Take account of the Group’s operations on the community and the environment
The investment in new plant and facilities following the move to new premises in 2020 has achieved a reduction in
emissions to very low levels and much of the new plant and equipment were optimised for environmental performance.
This also improves on the current environmental rules set by the authorities, thereby reducing the Group’s environmental
impact.
In cooperation with both customers and suppliers and their respective subcontractors, we continue to look to further
reduce our carbon footprint through a number of different measures, such as shortening the distance goods have to
travel, optimising production scheduling to make the most efficient use of process gas, etc.
Maintain a reputation for high standards of business conduct
Because of its necessarily long-term relationship with suppliers, customers and regulatory bodies, the Group must
maintain very high standards of business conduct. To do otherwise would restrict sales, especially new sales. This extends
to employees, among whom is embedded the Group’s very valuable non-patented intellectual property.
Act fairly between members of the Group
All shareholders are free to raise matters with the CEO, the Senior Independent Director (“SID”) and the Chair. The
Chair, CEO and Finance Director meet regularly with larger shareholders (usually once per year) and all shareholders are
encouraged to participate in the Annual General Meeting.
Simon Hallam
Director and Company Secretary
21 February 2024
Corporate Governance Statement
29
Corporate Governance Statement
The Board is committed to high standards of corporate governance. Hardide complies with the
Corporate Governance Code of the Quoted Companies Alliance (“QCA Code”). A detailed review
of how Hardide complies with each provision of the Code can be found on our website at
https://hardide.com/investor-relations/corporate-governance
The Board has made a number of enhancements to its
governance practices over the last 12 months to enable
compliance with the QCA Code. These are:
1. A formal annual review of the Board’s performance
has been introduced. In 2023, this review was led
by the Chair, and this included his own observations
having recently joined the Board. The outcome of this
review is summarised below. In future it is intended
a questionnaire-based approach will be followed in
2024, facilitated by the Chair
2. The Board’s Committee structure was simplified
and streamlined during the year, with the Board
retaining two Committees: the Remuneration and
Nomination Committee; and the Audit Committee.
The Intellectual Property, and Risk and Sustainability
Committees, which were formerly Board Committees,
now continue together with the Executive Committee
as management committees. Each reports to the full
Board at regular intervals during the year. In this way
the output from these Committees benefits from the
observations, input and the broader range of skills
and experience of the whole Board, rather than just
certain Board Committee members
3. The ongoing Board Committees are now comprised
solely of independent non-executive directors
4. The Audit Committee is now Chaired by a Chartered
Accountant with relevant, recent financial experience
5. Following the financial year end, a further
independent non-executive director, Matt Hamblin,
was added to the Board bringing additional specific
coatings industry experience and a skill set that is
highly aligned with Hardide’s strategy of accelerating
revenue growth. Following the planned retirement
of Philip Kirkham from the Board, the Board will
comprise a majority (4 to 3) of non-executive
directors, 3 of whom are independent
The Board is cognisant of recent changes to the QCA
Code and that the revised Code will apply to our 2025
financial year. In light of the forthcoming changes:
(a) Hardide is aware that it could improve the diversity of
its Board and will take opportunities to do so; and
(b) we are currently developing a Remuneration Policy
for the first time. This will be based on the emerging
principles outlined in the Remuneration and
Nomination Committee report later in this Annual
Report. We will consult on the proposed Policy in
advance and, once it has been published for the first
time, we intend to put it to a shareholder advisory
vote.
Attendance at meetings
The following table summarises the number of Board
and Board Committee meetings held during the financial
year ended 30 September 2023. In addition to the formal
meetings listed below, Board members and NEDs held a
number of informal ad-hoc meetings and discussions.
Board
Audit
Committee
Remuneration
& Nomination
A Magson
P D Kirkham
S A Hallam
Y N Zhuk
A R Boyce
T J Rice
11
12
12
12
12
12
3
31
31
-
-
3
7
71
-
-
7
7
1 invited to participate in the meeting, or part of the meeting, as
an attendee
Board priorities for the 2024 financial year
The Board’s agreed priorities for the current financial
year are:
1. Following the announcement on 1 November 2023
that Philip Kirkham, CEO, is to step down from his
position by the end of April 2024, to oversee the
successful recruitment of a new CEO and a smooth
handover process
2. To obtain further financing facilities to provide
additional shorter term headroom
3. To achieve key business targets for the year, with
enhanced KPI tracking, monitoring, action planning
and better, more open internal communication
4. To better incentivise delivery of key financial metrics
through the introduction of whole company incentive
plans, with full communication and training on this
5. NEDs to support the Executive team by using their
contacts and market knowledge to identify and
promote new business opportunities
30
Corporate Governance Statement
Matters reserved by the Board and delegated authority
levels
Composition, Culture and Effectiveness of
the Board
There is a formal schedule of matters reserved for
a Board decision. This includes the appointment of
directors, any raising of funds, the setting of high-level
targets, approval of budgets, strategy, capital and revenue
expenditure above certain limits, license agreements
and incentive schemes. Authority levels for expenditure
are delegated to individual executives or management
committees according to a schedule agreed by the Board
from time to time.
Formulation of strategy
Each year the whole Board considers and develops the
Corporate Strategy set out in the previous year. The
formulation or re-formulation of Corporate Strategy is
led by the Chair but set and agreed by the whole Board.
The creation of budgets and Business Strategy is set
within the framework of the Corporate Strategy and
prepared by the executive directors and other senior
management. This Business Strategy is then challenged
by the Board, adjusted if necessary, finally approved and
then monitored by it. Adjustments agreed necessary are
formalised in writing shortly after the review.
A summary of Hardide’s Strategy can be found elsewhere
in this Annual Report.
Business Reviews
At its regular monthly meetings, the Board reviews
both the financial and non-financial performance of
the Group. Financial information for the Group and its
subsidiaries includes detailed profit & loss accounts,
cash flow statements and balance sheets; together with
analyses of movements in cash, trade debtors, trade
creditors and fixed assets. Close attention is also paid
to the development of sales by sector and by customer;
as well as progress with initiatives to develop major new
applications, sectors and customers. Directors may call
for further analysis of a particular matter.
Non-financial information is reviewed at least monthly
by the Board. It includes a balanced scorecard
containing KPIs from across the business, indicators
such as in health, safety & environmental performance,
business development, website and e-marketing,
plant performance, delivery performance, research &
development and sales activity. Progress on strategic
projects is also reviewed monthly.
The Board has a formal policy designed to ensure Board
leadership of health & safety matters and to institute a
board-level review of progress against objectives and
KPIs. An important feature of this is normally a joint
presentation made at least yearly by the CEO and VP of
Operations.
Independence of directors
Each of the directors, except Mr Hamblin who was
appointed on 1 November 2023 and Mr Paul who was
appointed on 12 February 2024, directly owns ordinary
shares in Hardide plc. Mr Boyce represents a large
percentage of shares by virtue of his directorship of
companies that own Hardide shares. Mr Kirkham, Mr
Hallam and Dr Zhuk have options over ordinary shares of
Hardide plc; all as declared in the Annual Report and on
the Regulatory News Service (RNS) at the time of grant.
As in previous years, the main criteria for independence
of Non-Executive Directors were:
i Based on the observed conduct of the director at
and outside Board and Committee meetings, has that
director acted clearly and consistently in the best
interests of the Group?
ii Has there been any matter affecting the Group that
might have given rise or might give rise in the future
to any conflict of interest?
iii Is the director’s direct or indirect holding of shares or
other financial instruments of the Group substantial
enough to cause an external observer to believe the
director in question might possibly have a potential
conflict of interest? In this case, ‘substantial’ has
been taken to mean 10% or more of the total issued
share capital
iv Has the director served on the Board for a period of
more than 9 years?
Mr Boyce is not considered independent based on the
third and fourth of these tests. However, Mr Boyce’s
ongoing input to the Board is considered important to
its overall effectiveness given the perspective he brings
from his substantial external Board and governance
experience, and also his alignment with Hardide
shareholders’ interests through his representation of
family shareholdings in the Group.
Number of directors
In the past financial year, a total of six directors served
and three of these were non-executive. Tim Rice is the
senior independent director (‘SID’). In addition, and in
compliance with the Code, Tim Rice is the chair of the
Remuneration & Nomination Committee. The chair of the
Audit Committee is Andrew Magson. The Board is aware
that the Chair of the Board should not ideally also chair
the Audit Committee, but given the size and financial
position of the Group considers this to be appropriate at
least for the time being, but keeps this position under
review.
Matt Hamblin joined the Board as a further independent
Non-Executive Director on 1 November 2023. Steve Paul
joined the Board as Interim Chief Executive Officer on
12 February 2024. Philip Kirkham, former CEO, will step
down from the Board following a short handover period.
Corporate Governance Statement
31
Roles of CEO, Senior Independent Director and Chair
Board performance review
Presently, Hardide is a small company and so most
directors have a range of tasks and responsibilities.
CEO:
All members of the senior management team, including
the other two executive directors report to the CEO.
The CEO develops, gains Board approval for, and
implements the Business Strategy. Also, he designs and
implements the sales and marketing plans. By virtue of
his experience as a professional engineer, he provides
strong support for operations and engineering. Also, he
has the principal responsibility for the Group’s financial
performance. He maintains a strong relationship with the
Chair and is jointly responsible with him for shareholder
communication and, by way of staff briefings, ensures
awareness among all staff of the Group’s performance
and challenges; including increasing their awareness of
the Group’s environmental and social responsibilities.
These briefings are held on a frequent basis throughout
the year.
Ensuring compliance with the quality management
systems, adequate staff training, the health & safety
of employees and the environmental performance are
direct accountabilities of the CEO.
Senior Independent Director (‘SID’):
The SID is charged with:
i Being a conduit for the concerns of directors,
shareholders and other stakeholders who prefer
to discuss matters that they have been unable to
resolve through other channels;
ii being available to meet principal shareholders;
iii being a sounding board for the Chair; and
iv along with other non-executive directors and having
taken soundings among other suitable parties,
conducting reviews of the performance of the Chair.
Chair:
The role of the Group’s Chair is to:
i Ensure effective communication with shareholders;
ii be available for private meetings or calls with
principal shareholders;
iii set the overall rules for corporate governance and
ensure compliance with these;
iv lead the development of Corporate Strategy;
v ensure effective and open communication among
directors; particularly at Board meetings;
vi chair the Audit Committee;
vii together with the CEO, direct and lead recruitment
and induction programmes for new directors and
senior recruits; and
viii ensure the appropriate content, format and
presentation of information for the Board.
The Chair led a review of the performance of the Board
during the year. This was done through a series of
interviews and informal discussions with each director
and with key Board advisers and larger shareholders.
The conclusion of this review was that the Board had
performed satisfactorily during the year. The following
principal areas for development were identified:
1. To increase Board level experience and skills in the
areas of sales, business development and marketing,
particularly in the context of the coatings and surface
treatment industries, consistent with the Board’s
strategy of accelerating revenue growth
2. To gain further clarity on, and to better quantify and
prioritise those business development opportunities
with a greater probability of success in the short to
medium term, consistent with the Board’s strategy of
accelerating revenue growth
3. The need to increase Board diversity
4. The need for further work on succession planning,
whilst recognising the limitations on what is
practicable in smaller companies such as Hardide
Range of skills and experience
A review is undertaken annually of the range of skills and
experience among the directors in light of the evolving
priorities needed to promote and achieve success for
Hardide over the longer term.
The number of directors (serving at the date of this
report) assessed to have appropriate experience and / or
specialisms in the following areas relevant to Hardide are
as follows:
Skill or specialism
Number of
Directors
Strategy and strategic development
General management
Coatings, surface treatment and
relevant Hardide end user markets
Sales, business development and
marketing
Engineering and new product
development
Health & safety, operations,
manufacturing
Human resources
International business
Corporate governance
Corporate finance
Finance and accounting
8
6
6
5
5
6
2
8
5
5
2
Two directors have MBAs, one has a PhD, two are
Chartered Accountants, one is a Chartered Engineer and
one has a Master's degree in Metallurgical Engineering.
32
Corporate Governance Statement
Company Secretary
Board Committees
At present, the Finance Director (Simon Hallam) also acts
as the Company Secretary. The directors consider that to
be acceptable. This is on the grounds of the size of the
Group, and its corporate structure is simple. Moreover,
Mr Hallam has ready access to advice from a specialist
firm that is familiar with Hardide’s needs in respect of
secretarial matters.
Succession planning
Overseen by the Remuneration and Nomination
Committee, a formal succession plan is maintained for
those directors and senior staff who are vital to the
operation and ultimate success of the business. The
relevant roles and individuals are identified, and the
Chair, CEO and Remuneration & Nomination Committee
agree on action in respect of the roles covered by the
plan.
Main terms of appointment for non-executive directors
The non-executives’ principal terms and conditions are
available for inspection by shareholders ahead of any
general meeting of the Group. What follows is a summary
of those terms and conditions.
Annual fees remain unchanged at £60,000 for the Chair
and those for the other non-executive directors, each of
whom receive £25,000. Fees are paid wholly under the
PAYE system; except for Andrew Boyce whose fees are
paid split between his personal service company and the
PAYE system.
The terms of appointment of all non-executive directors
require them to serve on Board Committees, as
appropriate, and to devote sufficient time to their roles.
All directors are entitled to seek independent legal
advice and have personal indemnity insurance paid for by
the Group.
All directors are obliged to inform the Board of any
new professional commitments or potential conflicts
of interest; whereupon other directors will consider
the acceptability of such roles. To date, no additional
commitment of a director has been found to be
unacceptable.
Directors are bound by confidentiality, especially with
regard to technology and to the identity of certain
customers. Following the end of their appointment,
directors may not, for one year, be engaged in any
business or technology that does, or reasonably may be
expected to, compete with Hardide.
All non-executive directors’ appointments are terminable
at one month’s notice by either party.
The two standing Committees of the Board are as
follows:
1. Remuneration and Nomination Committee
2. Audit Committee
Each Committee has written terms of reference
approved by the Board. These are kept under review and
updated as needed. The membership and chair of Board
Committees are determined by the Board.
The terms of reference for each Board Committee can be
found on the Group’s website.
The reports of these committees for the year are in the
following sections of the Annual Report.
Conflict Minerals
The Group has undertaken a due diligence exercise
with its suppliers of key process gasses to ensure that
conflict minerals are not used in their manufacture.
We can advise that all suppliers of these gases have
confirmed that conflict minerals are not involved in their
processes. A statement to this effect may be found on
the Group’s website.
Bribery Act, 2010 (the ‘Act’) and unethical
behaviour
The Group has in place a full ’Anti-bribery Policy’,
and this is in parallel with a ’Whistle-blowers’ Policy’.
Under guidelines set by the Board, a designated ‘Group
Compliance Officer’ manages the processes and
procedures that flow from these policies; in particular
the areas perceived to be most at risk from bribery
or from behaviour that is fraudulent or unethical.
Any member of staff may raise, in confidence with
any director, their concerns about financial or other
impropriety. The Group Compliance Officer reports
to the Board. From time to time, the Board considers
whether these policies need to be updated. The
main provisions of the Act and of Group policies and
procedures appear in the staff handbook. Annually,
all staff are required to confirm that they have read,
understood and complied with these.
Hardide’s policy regarding its anti-bribery policy and
guidance thereon may be found on the Group’s website.
The Market Abuse Regulation (‘MAR’)
The Group has comprehensive policies and procedures
designed to achieve compliance with MAR. Adherence
to this regulation is facilitated by software that, among
other things, maintains insider lists and can provide data
to the FCA. All relevant members of staff have received
copies of the policies and procedures.
Hardide has elected to adopt a closed period of 30-
days ahead of the announcement of its interim and
preliminary full-year results; as well as a planned
event that may have an influence on share price; all in
accordance with MAR requirements.
Corporate Governance Statement
33
Other Stakeholders
In addition to shareholders, the Group considers
stakeholders to include its employees, customers,
suppliers, contractors, the local community and other
parties with whom it interacts. As part of its Quality and
Environmental Management Systems, the Group has and
refers to a comprehensive ‘map’ of all its stakeholders.
From time to time, all staff are invited to briefings where
the CEO presents, explains, and responds to questions
about, important developments in the Group or its
environment.
Since Hardide’s processes are unique in many respects,
new staff are most unlikely to have knowledge of the
processes and so require lengthy training. Therefore,
the Group attaches great importance to the wellbeing
and retention of its staff. All employees have health
plan benefits and undergo regular health checks as
appropriate to their work activity.
Both the UK and US sites are accredited to aerospace
Quality Management System AS9100 RevD, and
ISO9001:2015. The UK site is also accredited to the
international Environmental Management standard ISO
14001:2015 and to Nadcap Gold Merit Status (National
Aerospace Defense Contractors Accreditation Program).
On behalf of the Board,
Andrew Magson
21 February 2024
The UK General Data Protection Regulation (‘UK-
GDPR’ or ‘Regulation’) and the UK Data Protection
Act 2018
These EU Regulations originally came into effect in May
2018 and subsequently adopted into UK law in January
2021 upon Brexit. All the procedures and proper records
are in place to achieve and demonstrate compliance.
Cyber security
The Group has strong and regularly updated cyber
security systems. It has an ongoing contract with
an external specialist cyber security company and is
accredited to the government-backed Cyber Essentials
Plus scheme.
Communication with Stakeholders
Shareholders
When there is a significant event regarding the Group,
full use is made of the Regulatory News Service (the
‘RNS’). Shortly after the full- and half-year results are
published, as well when seeking new funding, the CEO,
FD and Chair have made themselves available to present
the results in person, or by means of virtual meetings. In
addition, the Chair has regular contact with significant
shareholders, and they are free to contact him with
any concerns. Face-to-face, telephone or video contact
between the Chair and shareholders is encouraged.
From time to time, shareholders visit Hardide’s premises.
On these occasions, they are invited to ask questions
and are welcome to express concerns that they may
have and give their opinion on how they would like to
see the Group develop. Available on the Group’s website
is a video showing the new facility and the equipment
installed within it. Hardide’s website is comprehensive
and, as well as statutory documents, includes profiles
of directors and descriptions of a wide range of Group
features and activity. On request, hard copies of
Hardide’s Annual Report are available from the Group.
34
Remuneration and Nomination Committee Report
Remuneration and Nomination
Committee Report
Introduction, composition and duties
Remuneration policy
The Committee comprises Tim Rice as chair, together
with Andrew Magson and Matt Hamblin. Matt joined the
Committee on his appointment to the Board following
the financial year end. All committee members are
independent non-executive directors. Until 16 June
2023, Andrew Boyce also served as a member of the
Committee. The Committee meets at least quarterly, but
in the financial year ended 30 September 2023 it met
seven times, as it:
§ developed new executive incentive arrangements for
the 2024 financial year for recommendation to the
Board; and
Policy for the remuneration of the executive directors
includes three main objectives. These are to:
i Provide remuneration packages to attract and
motivate executive directors and senior management
of the calibre needed to run the Group successfully,
and to retain them;
ii ensure that there is a strong link between such
remuneration and the Group's strategy; and
iii align the executive directors' interests with those of
shareholders.
§ oversaw the process for, and recommended to the
Remuneration components
Board, the appointment of new non-executive director
(Matt Hamblin), announced on 1 November 2023.
The remuneration of the executive directors has up to
five components. They are:
The Committee’s duties are to:
i Base salary;
i Determine and agree with the Board the framework
or broad policy for the remuneration and contractual
terms of the Chief Executive Officer (CEO), Chair,
the executive directors and senior members of the
management team who report to directors;
ii design or approve the design of, and recommend to
the Board, targets for any performance related pay
schemes operated by the Group and approve the
total annual payments made under such schemes.
Such schemes and payments are subject to final
approval by the Board;
iii design all share-related incentive plans for approval
by the Board. For any such plans, determine each
year whether awards should be made and if so, the
overall value of such awards, the individual awards
to directors and other senior managers and the
performance targets to be used;
iv ensure that contractual terms on termination, and
any payments made, are fair to the individual and to
the Group, that failure is not rewarded and that the
duty to mitigate loss is fully recognised;
v within the terms of the agreed policy and in
consultation with the Chair or CEO or both,
determine the total individual remuneration package
of each executive director and other senior managers
who report to the CEO, including bonuses, incentive
payments and share options, other share awards
or other benefits. Particular attention is paid to
designing remuneration packages that are aligned
with the plans for the years ahead and especially
with the Group’s strategic goals;
vi at suitable times, review the implementation of
succession plans and oversee changes in Board
composition;
vii oversee any proposal for major changes in employee
benefits throughout the Group; and
viii oversee the appointment of senior members of staff,
including Directors.
ii an annual performance-related discretionary bonus
(non-pensionable). The maximum annual bonus
potential is typically in the range 30-50% of base
salary;
iii a longer-term incentive; principally comprising share
options. The maximum annual bonus potential from
share options awarded is typically in the range 50-
70% of base salary per year;
iv medical insurance for employees and their families;
and
v
in some cases, a car or car allowance.
Non-executive directors are paid a fixed fee for their
services and are not awarded bonuses or share options,
nor do they receive other benefits.
Directors’ Service Contracts
The executive directors, Messrs Kirkham, Zhuk and
Hallam have service contracts that are terminable at up
to 12 months' notice by either party.
The service contracts for non-executive directors are
terminable at one month’s notice either way.
Compensation for loss of office
There are no pre-determined special provisions for
compensation for executive or non-executive directors
in the event of loss of office. The Remuneration &
Nomination Committee bases payments made on
contractual obligations to the director concerned
consistent with employment law and, in the case
of “good leavers”, retains discretion to vary those
payments, as it considers appropriate, to specific
circumstances. An overriding principle is not to reward
poor performance.
Remuneration and Nomination Committee Report
35
§ to consider variable remuneration incentives for
the executive directors for the new financial year
ending 30 September 2024. A cash bonus scheme
was implemented in October 2023 which will pay a
bonus up to a maximum of 30% of base salary for the
executive directors, contingent on the achievement of
pre-determined financial objectives based on EBITDA
and cash performance for the year. In addition, a share
incentive scheme has been proposed and is under
development which will vest up to the value of 50% of
each executive director’s base pay, contingent on the
achievement of pre-determined profit targets aligned
with Hardide’s strategic plans over a 3-year period.
Following the announcement on 1 November 2023
that Phil Kirkham, Chief Executive, will be stepping
down from the Board by 30 April 2024, the Committee
negotiated Phil’s variable pay arrangements to more
specifically incentivise performance during the
transition to a new CEO.
§ the executive directors, together with the Chair,
considered the remuneration of the non-executive
directors. The executive directors, together with the
non-executives other than the Chair, considered the
fees of the Chair. No increase in NED / Chair fees was
awarded.
§ details of the remuneration of all Board members for
the year ended 30 September 2023 are set out in the
notes to the financial statements.
Tim Rice
Chair of Remuneration and Nomination Committee
21 February 2024
The main activities and decisions taken by the
Committee during the year were as follows:
(a) Nomination
The Committee oversaw the process to identify and
recruit a new non-executive director, in accordance with
the specifications of the Board, with industry specific
commercial, sales and marketing experience. Given
the very specific skills and experience required from
this appointment the Committee decided, together
with the Board, not to work with an external search
firm in this instance. This was because a suitably long
list of talented potential candidates with a diversity of
backgrounds was already known to Board members
from their industry knowledge. Following discussions
between the Committee and the Board, a short list of
four candidates was interviewed by Tim Rice and Andrew
Magson, following which Matt Hamblin was identified
as the preferred candidate. Given that Matt was already
known to all Board members having completed a sales
consultancy assignment for Hardide in August 2023, the
Board provided further input to Messrs. Rice and Magson
to assist them in conducting a final interview with Matt
Hamblin and in taking references. This all proved to be
satisfactory, and accordingly the Nomination Committee
recommended to the Board that Matt be appointed.
The Nomination Committee’s other principal activity
during the year was to review Board and senior
management succession matters, including the intention
to seek to address gender balance and other Board
diversity considerations as opportunities arise.
(b) Directors’ remuneration
The main activities and decisions of the Remuneration
Committee during the financial year were:
§ to set variable pay incentives for the executive
directors and to consider the issue of any further
share option incentives. It was decided not to issue
further share options for the year ended 30 September
2023, but a management bonus scheme was put in
place.
§ to agree any variable pay awards to be made in
respect of actual performance for the 2023 financial
year. On the basis that the relevant financial
performance conditions were not met, as these
required an EBITDA positive performance for the year,
no awards were made.
§ to consider pay rises for the executive directors. It was
agreed that each of the executive directors should be
awarded a 5% base pay rise effective from 1 July 2023,
in line with the increase given to the UK workforce
as whole. The pay review for the Directors and all
employees had been deferred from 1 January 2023, the
date it had originally been planned.
36
Audit Committee Report
Audit Committee Report
Composition
External audit
The Audit Committee comprises Andrew Magson
(Committee Chair), Tim Rice and Matt Hamblin. Matt
joined the Committee on his appointment to the Board
on 1 November 2023. All Committee members are
independent directors.
Andrew Magson is a Chartered Accountant and has
recent, relevant financial experience. He is therefore
judged by the Committee and Board to be an appropriate
Chair for the Committee.
The Board is aware that the Chair of the Board should
not normally also Chair the Audit Committee. However,
given the current size, complexity and financial position
of the Group and, having taken advice, the Board
concluded that it is appropriate in these circumstances
for the same individual to hold both roles.
Normally, the Audit Committee meets with the Group’s
external auditor at appropriate times during the reporting
and audit cycle, and in addition as required. The
Committee met three times during the 2023 financial
year, and again after the financial year end to review the
2023 Annual Report and Financial Statements and results
of the annual external audit.
Duties
The duties of the Audit Committee are to:
i Monitor the integrity of the financial statements and
the financial reporting process;
ii
review and challenge the effectiveness of the
Group’s internal controls, risk identification and risk
management systems;
iii review the Group’s arrangements for its employees to
raise concerns in confidence and with impunity about
possible wrongdoing and ensure these arrangements
allow proportionate and independent investigation;
iv review and keep up to date the Group’s procedures
for detecting and preventing bribery and fraud; and
ensure that the Group complies with all relevant
legislation in those jurisdictions where the Group
operates and / or employs staff; and
v monitor the performance of the statutory audit,
review the independence and effectiveness of the
external auditor; and make recommendations in
relation to the appointment, re-appointment and
removal of the Group’s external auditor.
The Group’s external auditor is James Cowper Kreston
Audit.
The effectiveness and independence of the external audit
and auditor is reviewed annually by reference to the
auditor’s attendance at Committee meetings, their audit
plan, audit fieldwork, post-audit management letter and
the judgment of the Committee having discussed the
matter with the finance director.
In accordance with the regulations for public company
audits, the James Cowper Kreston Audit engagement
partner who was responsible for the Hardide plc audit
for the previous five financial years was changed by
rotation ahead of last year’s (FY22) audit.
The external auditor also provides certain non-audit
services including annual tax compliance. The Board
has reviewed its safeguards and policies in place for
non-audit services and is satisfied that for the current
financial year these are sufficiently robust to ensure
that James Cowper Kreston Audit maintain their audit
objectivity and independence. James Cowper Kreston
Audit report to the Board annually on their independence
from Hardide plc. Non-audit services are provided only
if such services do not conflict with their statutory
responsibilities and ethical guidance. However, in
line with current best practice guidance and to avoid
any perception of a potential conflict of interest, the
Committee and Board have decided that, in future,
tax compliance work will be carried out by another
accountancy firm.
Taking all of the above into consideration, the Committee
concluded the auditors were both effective and
independent during the year.
Key risk areas, and audit and accounting matters
considered by the Committee
Generally, there is a close relationship between
Hardide’s income statement and its cash flows, with few
significant judgmental items or longer-term unsettled
items remaining on the balance sheet. The main
accounting and audit risks identified during the year,
including as also described in the auditor’s report, were:
§ funding and going concern risk;
§ lease accounting under IFRS16, and in particular
during FY23, the treatment of the purchase, sale and
leaseback transaction relating to the Martinsville
factory; and
§ revenue recognition (principally year end cut-off).
No significant adjustments or matters of concern were
identified by the external audit.
Audit Committee Report
37
Internal control and consideration of the need for
internal audit
The finance function for the Group and both of the
Group’s operating operations is managed by the Group
Finance Director in Bicester with all management and
statutory accounting, transaction processing, payments
and group payroll controlled and managed from there.
Reliance with regard to internal control effectiveness
is placed on the close involvement of the Executive
Directors in the day to day management and control
of the business, with the Audit Committee retaining
oversight of financial information provided to the Board
and the Group’s accounting and internal control policies
and procedures. Recommendations for amendments or
improvements are made as needed.
During the year there were no significant matters raised
by the external auditors, nor any significant matters
of concern identified with regard to internal control
elsewhere that required action by the Committee.
Therefore, it is judged that the current size, financial
position, complexity and risk profile of the Group does
not justify the cost of an internal audit function. This will
be kept under annual review.
Andrew Magson
Chair of the Audit Committee
21 February 2024
38
Environmental, Social and Governance
Environmental, Social and
Governance
Our Philosophy
At all times, the Group aims to maintain its operations in a safe, environmentally conscious
and socially responsible manner, taking into account the needs of stakeholders. These include
shareholders, members of staff, suppliers, customers and the local community.
Our approach considers the effects that we have on the environment and their significance.
Environmental
Hardide is committed to minimising its emissions to the environment in every aspect.
We coat parts for North American-based customers in our Martinsville, Virginia facility rather than doing so in the UK. This
avoids double freight transits across the Atlantic and reduces the amount of global CO2 emissions.
Hardide coatings benefit customers and the environment
One of the best ways of helping to protect the environment is to make parts that last longer in service; this is exactly
what Hardide’s coatings do. Hardide coated products greatly lower the life cycle costs of customers due to increased
operating life of components by reduced wear and enhanced corrosion resistance. Some customer and test reports show
over a hundredfold increase in useful operating life. Our coatings also help improve efficiency and provide further benefits
to end-users that include reduced downtime and extended service intervals. Each of these features bring environmental
and cost benefits.
Hardide’s coatings are non-toxic and are environmentally compliant. Used to replace hard chrome plating (HCP) on
components, they eliminate the health hazard that the production of HCP presents and reduce the amount of toxic
chrome sludge in landfills, which pose threats to both soil and groundwater. Hardide can be used instead of high-velocity
oxy-fuel (HVOF) thermal spray coatings, which can contain cobalt. The use of cobalt is currently under review by the
European Chemicals Agency and is thought likely to be restricted or possibly banned in the future.
Key metrics
In FY23 we reduced our total Group CO2 emissions per £m sales by 13% compared with FY22
Total Group emissions tCO2e/£m sales
tCO2e/£m sales
160
140
120
100
80
60
40
20
0
FY21
FY22
FY23
160
140
120
100
80
60
40
20
0
Electricity
Landfill Waste
FY21
FY22
FY23
In our UK facility, we have eliminated the use of natural gas and all electricity is now supplied from a renewable REGO-
certified (Renewable Energy Guarantees of Origin) source. The only use of natural gas is at our US facility in Martinsville
where it is used for workspace heating.
Total electricity used (kWh)
kWh/£m sales
FY22
1,307,454
261,490
FY23
1,211,276
220,232
Reduction %
14.4%
15.8%
Environmental, Social and Governance
39
Water usage
Total water used (m3)
Usage (m3/£m sales)
Waste
FY22
1,064
212.9
FY23
615.3
111.9
Reduction %
42%
47%
Most customer parts for coating arrive in packaging which is reused to return the parts back to the customer. Only a small
amount of waste is sent to landfill and consists of such items as general office waste, non-reusable packaging and plastic
containers from suppliers.
Metal residue resulting from the coating process and any metal used in masking and tooling of the products is segregated
and sold to metal recycling companies.
All chemical process waste is stored and collected by specialist chemical waste disposal companies. All waste is
segregated into waste streams and disposed of in accordance with local regulations. Waste transfers are recorded,
verified and audited.
Landfill Waste
Total waste to Landfill (t)
t/£m sales
Transport
FY22
27
5.5
FY23
27
5.0
Reduction %
0%
9%
Customers are responsible for the transport of their goods both to and from our facilities, so Hardide has no influence on
the choice of transport or routing.
Electric Vehicles
We are encouraging and supporting our employees in the move towards electric vehicle (EV) use and have four EV
charging points at our Bicester site.
Social
Health & Safety
Hardide’s priority is the health, safety and well-being of its employees, visitors and contractors. In addition to First Aiders,
Hardide has trained Mental Health First Aiders to support our staff’s mental wellbeing. To maintain physical health, we
have an external Occupational Health provider which undertakes regular testing of our employees. We also enrol all staff
into a Health Payment Plan which includes access to a 24-hour medical helpline.
Work Related Lost Time Incidents
Total lost time incidents
Incident rate
FY22
1
1.13
FY23
0
0
Lost time incidents are classed as >1 day absence following day of incident. Incident rate is defined as the number of lost
time incidents per 100,000 hours worked
40
Environmental, Social and Governance
Local Community
Hardide is a socially-responsible company and we monitor our effect on local communities and society in general.
Our new facility is located at an industrial estate away from any domestic housing, eliminating the potential for any noise
to affect the local community.
Gender Diversity
Directors
Staff
Total Group
Males
Females
Total
Male %
Female %
6
36
42
0
4
4
6
40
46
100
90
91.3
Pay equity - CEO pay as multiple of median UK earnings
Governance
Key Metrics
Are the CEO’s and Chair’s roles split?
Adheres to QCA Corporate Governance code?
Percentage of non-executive directors on Board
Has an Ethics Policy?
Has an Environmental Policy?
Has a Discrimination Policy?
0
10
8.7
5.73
Yes
Yes
50%
Yes
Yes
Yes
Independent Auditor’s Report to the members of Hardide plc
41
Independent Auditor’s Report
to the members of Hardide plc
Opinion
We have audited the financial statements of Hardide plc (the ‘Group’) for the year ended 30 September 2023 which
comprise the Consolidated Statement of Comprehensive Income, the Consolidated and Company Statement of Financial
Position, the Consolidated and Company Statement of Changes in Equity, the Consolidated Statement of Cash Flows
and notes to the financial statements, including a summary of significant accounting policies. The financial reporting
framework that has been applied in the preparation of the Group financial statements is applicable law and UK adopted
international accounting standards. The financial reporting framework that has been applied in the preparation of the
parent Company financial statements is applicable law and United Kingdom accounting standards, including Financial
Reporting 101 ‘Reduced Disclosure Framework’ (United Kingdom Generally Accepted Accounting Practice).
In our opinion:
§ the financial statements give a true and fair view of the state of the Group’s and of the parent company’s affairs as at
30 September 2023 and of the Group’s loss and cash flows for the year then ended;
§ the financial statements of the Group have been properly prepared in accordance with UK adopted International
Accounting Standards;
§ the parent Company financial statements have been properly prepared in accordance with United Kingdom accounting
standards; and
§ the parent company financial statements have been prepared in accordance with the requirements of the Companies
Act 2006.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable
law. Our responsibilities under those standards are
further discussed in the Auditor’s responsibilities for
the audit of the financial statements section of our
report. We are independent of the Group and Company
in accordance with the ethical requirements that are
relevant to our audit of the financial statements in the
UK, including the FRC’s Ethical Standards as applied
to listed entities, and we have fulfilled our ethical
responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained
is sufficient and appropriate to provide a basis for our
opinion.
Material uncertainty related to going concern
We draw attention to note 1 in the financial statements,
which explains significant uncertainties in respect of the
Group’s ongoing fundraising and future trading and cash
flow expectations. As stated in note 1, these events or
conditions indicate that a material uncertainty exists that
may cast significant doubt on the Group and Company’s
ability to continue as a going concern. Our opinion is not
modified in respect of this matter.
In auditing the financial statements, we have concluded
that the Directors’ use of the going concern basis of
accounting in the preparation of the financial statements
is appropriate.
Our evaluation of the Directors’ assessment of the Group
and Company’s ability to continue to adopt the going
concern basis of accounting included:
§ gaining an understanding through discussions with
management of the process in place for assessing
going concern;
§ reviewing budgets and forecasts prepared by the
Directors and considered the assumptions made for
reasonableness;
§ considered a range of severe but plausible downside
scenarios and reviewed the impact on management’s
assessment of the Group and Company being a going
concern; and
§ reviewing the adequacy and appropriateness of the
disclosures in respect of going concern.
Our responsibilities and the responsibilities of the
Directors with respect to going concern are described in
the relevant sections of this report.
An overview of the scope of our audit
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)). We designed
our audit by determining materiality and assessing
the risks of material misstatement in the financial
statements. In particular, we looked at where the
Directors made subjective judgements, for example in
respect of significant accounting estimates that involved
making assumptions and considering future events that
are inherently uncertain. As in all our audits we also
addressed the risk of management override of internal
controls, including evaluating whether there is evidence
of bias by the Directors that represented a risk of
material misstatement due to fraud.
We tailored the scope of our audit to ensure that we
performed enough work to be able to give an opinion on
the financial statements as a whole, taking into account
our understanding of the Group and parent company
and their environment, the accounting processes and
controls, and the industry in which the Group and
Company operate.
The audit scope was as follows:
Hardide plc - the parent company holding investments
throughout the Group – full scope audit.
Hardide Coatings Limited - a trading entity that
generates a significant amount of the trading results for
the Group - full scope audit.
42
42
Independent Auditor’s Report to the members of Hardide plc
Hardide Coatings Inc - a trading entity that generates a
significant amount of the trading results for the Group
– appropriate audit procedures for the purpose of the
audit of the consolidated financial statements.
The risks of material misstatement that had the greatest
effect on our audit, including the allocation of our
resources and effort, are identified in the Key audit
matters section below. We have also set out how we
tailored our audit to address these specific areas in
order to provide an opinion on the financial statements
as a whole, and any comments we make on the results
of our procedures should be read in this context. This is
not a complete list of all risks identified by our audit.
Key audit matters
Key audit matters are those matters that, in our
professional judgement, were of most significance in
our audit of the financial statements of the current
period and include the most significant assessed risks of
material misstatement (whether or not due to fraud) we
identified, including those which had the greatest effect
on: the overall audit strategy; the allocation of resources
in the audit; and directing efforts of the engagement
team.
In addition to the matter described in the Material
uncertainty related to going concern section, we have
determined the matters below to be the key matters
to be communicated in our report. These matters were
addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on
these matters.
Revenue recognition
Risk description
There is an inherent risk of error and fraud regarding
revenue.
How the scope of our audit responded to the risk
To assess the appropriateness and completeness
of revenue recognised in the year we performed the
following procedures:
§ discussed the revenue recognition policy with
management and performed a walkthrough to
understand the revenue recognition process;
§ examined a sample of revenue transactions by
reference to underlying contractual terms;
§ examined, on a sample basis, sales invoices, goods
delivery notes and postings for items despatched
during the year and around the period end;
§ reviewed manual journals posted to the revenue
account in the period and subsequent to year-end
gaining an understanding of the appropriateness of
these;
§ considered the appropriateness and application of the
Group’s accounting policy for revenue recognition; and
§ considered the adequacy and appropriateness of
the disclosures in the financial statements regarding
revenue.
Key observations
The results of our testing were satisfactory and we
consider the disclosures surrounding revenue to be
appropriate.
Grant income recognition
Risk description
The Group has a number of grant agreements in place.
There is a risk that the grant income is not recognised
correctly or is recognised in the wrong period.
How the scope of our audit responded to the risk
To assess the appropriateness and completeness of
grant income recognised in the year we performed the
following procedures:
§ gained an understanding through walkthroughs
performed and discussions with management of the
process in place for recognising grant income;
§ examined the grant income by reference to underlying
terms within the grant agreements;
§ reviewed the Group’s expenditure in relation to the
grants to gain assurance that the grant proceeds were
used for the purposes of the grants;
§ reviewed the Group’s performance against the
performance conditions;
§ considered the appropriateness and application of the
Group’s accounting policy for grant income recognition;
and
§ considered the adequacy and appropriateness of the
disclosures in the financial statements regarding the
recognition of grant income.
Key observations
The results of our testing were satisfactory and we
consider the disclosure surrounding the recognition of
grant income to be appropriate.
Sale and leaseback
Risk description
During the year ended 30 September 2023, the
Group entered into an agreement to purchase, and
subsequently sell and leaseback, property in Martinsville,
USA.
The selection and application of an appropriate
accounting policy in accordance with IFRS 16 ‘Leases’
is complex due to the bespoke nature of the sale
and leaseback arrangement in place. Furthermore,
this required significant judgement regarding the
assumptions which are applied in accounting for the
recognition of the sale and leaseback.
How the scope of our audit responded to the risk
To assess the appropriateness of the application
of accounting standards and the assumptions and
judgements made by management we performed the
following procedures:
Independent Auditor’s Report to the members of Hardide plc
43
43
§ gained an understanding through discussions with
management of the process in place to account for
the sale and leaseback;
§ examined the agreements setting out the sale and
leaseback to determine the appropriateness of
accounting policies used by management;
§ performed recalculations to check the accuracy of the
calculations provided; and
§ considered the adequacy and appropriateness of
disclosures in the financial statements regarding the
sale and leaseback.
Key observations
The results of our testing were satisfactory and we
consider the disclosures surrounding the sale and
leaseback to be appropriate.
Management override
Risk description
In preparing the financial statements management
are required to make judgements, estimates and
assumptions that affect the application of policies and
reported amount of assets and liabilities, income and
expenses. The estimates and associated assumptions
are based on historical experience and various other
factors that are believed to be reasonable under the
circumstances, the results of which form a basis for
making the judgements about the carrying value of
assets and liabilities that are not available from other
sources.
How the scope of our audit responded to the risk
During the course of our audit we performed the
following procedures to address the risk of management
override:
§ gained an understanding through discussions with
management of the process in place for posting
journal entries;
§ assessed the appropriateness of accounting policy
choices made by management and the basis of key
judgements, estimates and assumptions;
§ reviewed manual journal entries posted within the
period for indicators of management bias, transactions
outside the normal course of business or indicators of
fraudulent activity;
§ examined on a sample basis manual journals deemed
to be higher risk gaining an appropriate understanding
of the business rationale as well as confirming the
accuracy of postings;
§ considered the value, nature and cause of
misstatements identified during the course of the
audit to identify indicators of bias; and
§ considered the adequacy and appropriateness of
disclosures in the financial statements regarding
significant accounting policies, judgements and
estimates.
Key observations
The results of our testing were satisfactory and we
consider the disclosures surrounding accounting policies
and key accounting judgements to be appropriate.
Our application of materiality
We define materiality as the magnitude of misstatement
in the financial statements that makes it probable that
the economic decisions of a reasonably knowledgeable
person would be changed or influenced. We use
materiality both in planning the scope of our audit work
and in evaluating the results of our work.
On the basis the Group focus is on increasing sales
significantly and transitioning from significant losses,
towards break-even and profitability, a turnover rather
than loss-based measure was deemed the most
appropriate benchmark to use to calculate materiality.
Having regard to both the size of the business and
its performance, 1.5% of turnover was viewed as an
appropriate level to set materiality. Based on our
professional judgement materiality was set at £82,000
(2022: £75,000). Performance materiality of £57,000
(2022: £53,000) was applied for testing and it was
agreed with the Board that we would report on all
audit differences in excess of £4,000 (2022: £4,000),
as well as differences below that threshold that, in our
view, warranted reporting on qualitative grounds. We
also report on disclosure matters that we identified
when assessing the overall presentation of the financial
statements.
Group materiality in the prior year was also based on a
turnover based benchmark.
The parent company does not generate significant
sales and incurs significant expenditure. As a result, we
believe a loss-based measure to be the most appropriate
benchmark to use to calculate materiality for the parent
company financial statements. Having regard to both
the size of the company and its performance, 5% of the
loss before tax, after adjusting for foreign exchange gains
and losses on intercompany balances and intercompany
charges, was viewed as an appropriate level to set
materiality. Based on our professional judgement
materiality was set at £48,000 (2022: £41,000).
Performance materiality of £34,000 (2022: £29,000) was
applied for testing and it was agreed with the Board
that we would report on all audit differences in excess
of £2,000 (2022: £2,000), as well as differences below
that threshold that, in our view, warranted reporting
on qualitative grounds. We also report on disclosure
matters that we identified when assessing the overall
presentation of the financial statements.
Parent company materiality in the prior year was also
based on a pre-tax loss-based benchmark.
44
Independent Auditor’s Report to the members of Hardide plc
Other information included in the annual report
The other information comprises the information
included in the Annual Report other than the financial
statements and our Auditor's Report thereon. The
Directors are responsible for the other information
contained within the Annual Report. Our opinion on
the financial statements does not cover the other
information and, except to the extent otherwise explicitly
stated in our report, we do not express any form of
assurance conclusion thereon. Our responsibility is to
read the other information and, in doing so, consider
whether the other information is materially inconsistent
with the financial statements or our knowledge obtained
in the course of the audit, or otherwise appears to
be materially misstated. If we identify such material
inconsistencies or apparent material misstatements,
we are required to determine whether this gives rise
to a material misstatement in the financial statements
themselves. If, based on the work we have performed,
we conclude that there is a material misstatement of
this other information, we are required to report that
fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the
Companies Act 2006
In our opinion, based on the work undertaken in the
course of the audit:
§ the information given in the strategic report and the
Directors’ report for the financial year for which the
financial statements are prepared is consistent with
the financial statements; and
§ the strategic report and the Directors’ report have
been prepared in accordance with applicable legal
requirements.
Matters on which we are required to report by
exception
In the light of the knowledge and understanding of the
Group and parent company and its environment obtained
in the course of the audit, we have not identified
material misstatements in the strategic report or the
Directors’ report.
We have nothing to report in respect of the following
matters in relation to which the Companies Act 2006
requires us to report to you if, in our opinion:
§ adequate accounting records have not been kept by
the parent company, or returns adequate for the audit
have not been received from branches not visited by
us; or
§ the parent company financial statements are not in
agreement with the accounting records and returns; or
§ certain disclosures of Directors’ remuneration
specified by law are not made; or
§ we have not received all the information and
explanations we require for our audit.
Responsibilities of Directors
As explained more fully in the Directors’ responsibilities
statement set out on page 26, the Directors are
responsible for the preparation of the financial
statements and for being satisfied that they give a
true and fair view, and for such internal control as
the Directors determine is necessary to enable the
preparation of financial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors
are responsible for assessing the Group and parent
company’s ability to continue as a going concern,
disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting
unless the directors’ either intend to liquidate the Group
and parent company or to cease operating, or have no
realistic alternative but to do so.
Independent Auditor’s Report to the members of Hardide plc
45
Use of our report
This report is made solely to the Company’s members,
as a body, in accordance with Chapter 3 of Part 16 of
the Companies Act 2006. Our audit work has been
undertaken so that we might state to the Company’s
members those matters we are required to state to
them in an Auditors’ report and for no other purpose. To
the fullest extent permitted by law, we do not accept
or assume responsibility to anyone other than the
Company and the Company’s members as a body, for
our audit work, for this report, or for the opinions we
have formed.
Alan Poole BA (Hons) FCA (Senior Statutory Auditor)
For and on behalf of
James Cowper Kreston Audit
Chartered Accountants and Statutory Auditor
2 Chawley Park
Cumnor Hill
Oxford
OX2 9GG
United Kingdom
21 February 2024
Auditor’s responsibilities for the audit of the
financial statements
Our objectives are to obtain reasonable assurance
about whether the financial statements as a whole
are free from material misstatement, whether due
to fraud or error, and to issue an Auditor's Report
that includes our opinion. Reasonable assurance is a
high level of assurance, but is not a guarantee that
an audit conducted in accordance with ISAs (UK) will
always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate,
they could reasonably be expected to influence the
economic decisions of users taken on the basis of these
financial statements.
Because of the inherent limitations of an audit, there is
a risk that we will not detect all irregularities, including
those leading to a material misstatement in the financial
statements or non-compliance with regulation. This
risk increases the more that compliance with a law or
regulation is removed from the events and transactions
reflected in the financial statements, as we will be less
likely to become aware of instances of non-compliance.
The risk is also greater regarding irregularities occurring
due to fraud rather than error, as fraud involves
intentional concealment, forgery, collusion, omission or
misrepresentation.
The specific procedures for this engagement that
we designed and performed to detect material
misstatements in respect of irregularities, including
fraud, were as follows:
§ Enquiry of management and those charged with
governance around actual and potential litigation and
claims;
§ Reviewing minutes of meetings of those charged with
governance;
§ Reviewing reports and submissions with regulatory
bodies including enquiries of those in compliance
functions;
§ Reviewing financial statement disclosures and testing
to supporting documentation to assess compliance
with applicable laws and regulations;
§ Reviewing the robustness of, and compliance with, the
Group’s internal control procedures in the identification
of irregularities, including fraud;
§ Examined, on a sample basis, manual journals deemed
to be higher risk, gaining an appropriate understanding
of the business rationale as well as confirming
the accuracy of postings and reviewing accounting
estimates for bias.
A further description of our responsibilities for the audit
of the financial statements is located on the Financial
Reporting Council's website at:
www.frc.org.uk/auditorsresponsibilities. This description
forms part of our auditor's report.
46
Consolidated Statement of Comprehensive Income
Consolidated Statement of
Comprehensive Income
For the year ended 30 September 2023
Revenue
Cost of sales
Gross profit
Administrative expenses
Other operating income
Other operating costs
Operating (loss)
Finance income
Finance costs
Finance costs on right of use assets
(Loss) on ordinary activities before taxation
Taxation
(Loss) on ordinary activities after taxation
(Loss) per share: Basic
(Loss) per share: Diluted
Other Comprehensive Income
Items that may be reclassified to profit or loss:
Exchange differences on translation of foreign operations
Total comprehensive loss for the year attributable to
owners of the parent company
All operations are continuing.
Note
2
3
4
5
5
7
8
8
2023
£000
5,499
(2,886)
2,613
(2,871)
159
(932)
(1,031)
3
(59)
(106)
(1,193)
75
(1,118)
2022
as restated
£000
5,015
(3,135)
1,880
(2,821)
-
(1,208)
(2,149)
4
(49)
(80)
(2,274)
86
(2,188)
(1.9)p
(1.9)p
(3.9)p
(3.9)p
(144)
304
(1,262)
(1,884)
The accompanying accounting policies and notes form an integral part of these financial statements.
The prior year has been restated to report depreciation and amortisation on owned assets, and depreciation on right of
use assets, as other operating costs.
Consolidated Statement of Financial Position
47
Consolidated Statement of
Financial Position
For Hardide plc, company registered number 05344714 at 30 September 2023
Assets
Non-current assets
Goodwill
Intangible assets
Property, plant & equipment
Right of use assets
Total non-current assets
Current assets
Inventories
Trade and other receivables
Other current financial assets
Cash and cash equivalents
Total current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Loans
Deferred income
Right of use lease liability
Total current liabilities
Net current assets
Non-current liabilities
Loans
Deferred income
Right of use lease liability
Provisions
Provision for dilapidations
Total non-current liabilities
Total liabilities
Net assets
Equity attributable to equity holders of the parent
Share capital
Share premium
Retained earnings
Share-based payments reserve
Translation reserve
Total equity
Note
9
10
11
12
13
13
13
13
14
14
14
14
16
16
16
15
17
17
2023
£000
-
9
4,640
1,697
6,346
236
742
335
740
2,053
8,399
919
253
17
182
1,371
682
508
72
2,106
50
2,736
4,107
4,292
2022
£000
69
19
5,402
1,660
7,150
487
955
450
693
2,585
9,735
1,077
238
19
201
1,535
1,050
780
98
1,742
50
2,670
4,205
5,530
4,063
19,242
(19,318)
577
(272)
4,292
4,063
19,242
(18,200)
553
(128)
5,530
The financial statements were approved and authorised for issue by the Board on 21 February 2024.
Philip Kirkham
Director
Simon Hallam
Finance Director
48
Consolidated Statement of Cash Flows
Consolidated Statement of
Cash Flows
For the year ended 30 September 2023
Cash flows from operating activities
Operating (loss)
Gain on sale and leaseback
Impairment of goodwill
Depreciation and amortisation on owned assets
Depreciation on right of use assets
Share option charge / (credit)
Decrease in inventories
Decrease / (increase) in receivables
(Decrease) / increase in payables
(Decrease) in provisions
Cash generated from / (used in) operations
Finance income
Finance costs
Right of use asset interest
Tax received
Net cash generated from / (used in) operating activities
Cash flows from investing activities
Proceeds from sales of property, plant and equipment
Purchase of intangibles
Purchase of property, plant and equipment
Net cash used in investing activities
Cash flows from financing activities
Net proceeds from issue of ordinary share capital
Proceeds from sale and leaseback
New loans raised
Loans repaid
Repayment of leases
Net cash (used in) / generated from financing activities
Effect of exchange rate fluctuations
Net increase / (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
2023
£000
(1,031)
(159)
69
677
186
24
251
243
(93)
-
167
3
(59)
(106)
161
166
-
(2)
(108)
(110)
-
477
-
(286)
(289)
(98)
89
47
693
740
2022
£000
(2,149)
-
-
890
318
(9)
17
(372)
372
(34)
(967)
4
(49)
(80)
78
(1,014)
7
(1)
(298)
(292)
509
-
325
(261)
(251)
322
134
(850)
1,543
693
Consolidated Statement of Changes in Equity
49
Consolidated Statement of
Changes in Equity
For the year ended 30 September 2023
At 1 October 2021
Issue of new shares
Share options
Exchange translation
Loss for the year
Share
Capital
£000
3,942
121
-
-
-
18,854
388
-
-
-
At 30 September 2022
4,063
19,242
At 1 October 2022
4,063
19,242
Share options
Exchange translation
Loss for the year
-
-
-
-
-
-
Share Share-based
Payments
£000
Premium
£000
Translation
Reserve
£000
Retained
Earnings
£000
562
(432)
(16,012)
-
(9)
-
-
553
553
24
-
-
-
-
304
-
(128)
-
-
-
(2,188)
(18,200)
(128)
(18,200)
-
(144)
-
-
-
(1,118)
Total
Equity
£000
6,914
509
(9)
304
(2,188)
5,530
5,530
24
(144)
(1,118)
At 30 September 2023
4,063
19,242
577
(272)
(19,318)
4,292
50
Notes to the Group Financial Statements
Notes to the
Group Financial Statements
Going concern
The directors have adopted the going concern basis in
preparing the financial statements in the expectation
that c.£0.75m (net of costs) of additional equity finance
will be raised shortly, and after assessing the principal
risks and considering the impact of various downside
scenarios to the Group’s base case financial plans,
including latest sales expectations and profit margins for
the period to March 2025.
The directors considered how the current economic
climate, including external forecasts of lower economic
growth or recession in 2024, higher interest rates and
inflation, and current year to date trading including de-
stocking by customers may affect the performance of
the business.
The profitability and cash flow performance of the
business is highly sensitive to changes in sales volumes
due to the high level of operational gearing and fixed
costs.
The Board is continuing to seek a further c.£0.25m
in debt finance to increase financial headroom and
resilience.
In light of the above, the Board expects the Group to
have sufficient financial and other resources to continue
to operate as a going concern for the foreseeable future,
but in reaching that conclusion the Board is mindful of
the following key sensitivities which, should they occur,
would cast significant doubt on that conclusion:
(a) There is a material shortfall in the c.£0.75m net
proceeds realised from the anticipated equity
fundraise; or
(b) Substantially all of the c.£0.75m net proceeds from
the anticipated equity fundraise are realised, the
ongoing initiatives to secure c.£0.25m of additional
debt are not successful, and the Group does not
achieve its base case sales forecast by c.15% or more;
or
(c) Substantially all of the c.£0.75m net proceeds from
the anticipated equity fundraise are realised, the
ongoing initiatives to secure c.£0.25m of additional
debt are successful, and the Group does not achieve
its base case sales forecast by c.20% or more.
Accordingly, the Board has concluded that it remains
appropriate to prepare the financial statements on a
going concern basis, but that this is subject to material
uncertainty as outlined above.
1. Accounting policies
Accounting convention
The Group is required to prepare its financial statements
in accordance with International Financial Reporting
Standards (IFRS) and IFRS Interpretations Committee
(IFRS IC) 2006 issued and effective at the time of
preparing these annual financial statements, in
conformity with the requirement of the Companies Act.
Standards, amendments and interpretations that are
not yet effective for Hardide Plc and have not been early
adopted:
At the date of authorisation of these financial
statements, the following Standards and Interpretations
which have not been applied in these financial
statements were in issue but not yet effective:
Effective date* 1st January 2023
§ IAS 1 - Presentation of Financial Statements -
Disclosure of accounting policies
§ IAS 1 - Presentation of Financial Statements -
Classification of liabilities as current or non-current
§ IAS 8 - Accounting Policies, Changes in Accounting
Estimates and Errors - Definition of accounting
estimates
§ IAS 12 - Income Taxes - Deferred tax relates to assets
and liabilities arising from a single transaction
Effective date* 1st January 2024
§ IAS 1 - Presentation of Financial Statements - Non-
current liabilities with covenants
§ IFRS 16 - Leases - Lease liability in a sale and
leaseback
* the standard is effective for accounting periods
beginning on or after this date.
The directors are currently reviewing the effect on the
financial statements of the Group in future periods.
The following principal accounting policies have been
applied:
Basis of preparation
The financial statements have been prepared on
the going concern basis, under the historical cost
convention. These financial statements are presented
in pounds sterling because that is the currency of the
primary economic environment in which the Group
operates. All amounts are rounded to the nearest
thousand pounds.
Principal activity
The principal activity of the Group and parent company
is a leading producer of patented Chemical Vapour
Deposition (CVD) coatings for the oil and gas industry,
flow control equipment, advanced engineering and
aerospace.
Notes to the Group Financial Statements
51
Basis of consolidation
The consolidated financial statements incorporate
the financial statements of Hardide plc and entities
controlled by Hardide plc (its subsidiaries) made up to
30 September each year.
Control is achieved where Hardide plc has the power to
govern the financial and operating policies of an investee
entity so as to obtain benefits from its activities. The
financial statements of subsidiaries are included in the
consolidated financial statements from the date that
control commences until the date that control ceases.
Transactions between and balances with Group
companies are eliminated together with unrealised
gains on inter-company transactions. Where necessary,
adjustments are made to the financial statements of
subsidiaries to bring the accounting policies used into
line with those used by the Group.
Acquisitions are accounted for by the purchase method.
The cost of an acquisition is measured as the fair
value at the date of exchange of the consideration
provided plus any costs directly attributable to the
acquisition. On acquisition, the assets and liabilities
and contingent liabilities of the acquired business that
meet the conditions for recognition under IFRS 3 are
measured at their fair values at the date of acquisition.
Any excess of the cost of acquisition over the fair values
of the identifiable net assets acquired is recognised as
goodwill. Any deficiency of the cost of acquisition below
the fair values of the identifiable net assets acquired is
credited to profit or loss in the period of acquisition.
Revenue recognition
Revenue represents the invoiced amount of goods sold
and services provided during the period, excluding
value added tax and other sales taxes, trade discounts,
and intra-group sales. Revenue is recognised when
performance has occurred and a right to consideration
has been obtained. This is normally when goods have
been despatched or services provided to the customer,
title and risk of loss have been transferred and collection
of related receivables is probable.
Revenue shown in the Statement of Comprehensive
Income only relates to revenue recognised from
contracts with customers, and no other sources of
revenue are included. No impairment losses have been
recognised to any receivable during the period.
Opening and closing balances of receivables from
contracts with customers are shown in note 13.
Hardide’s performance obligations are satisfied upon
despatch of goods from our premises. Hardide does not
have any bill-and-hold arrangements with its customers.
Our normal terms of payment are 30 days from date of
invoice although for some customers, other terms have
been agreed including End of Month Following, and 45
and 60 days from date of invoice. Contracts do not have
financing components and consideration is not variable.
Hardide provides a coating service for components
owned and provided by its customers, and also
sells coated components it has sourced itself. Any
component deemed by a customer as non-conforming
can be returned for rework or, in the case of a Hardide-
sourced component, replaced. Where neither of these
are possible, a credit note is raised for the amount
invoiced for the non-conforming product. Hardide does
not provide any warranties or guarantees concerning
the coating’s performance, it is the responsibility of the
customer to determine that the coating is suitable for
and has been appropriately tested for its needs.
There are no remaining performance obligations to be
disclosed. Performance obligations are satisfied in full
upon delivery and revenue is recognised at that point.
Our terms of business are ex-works in all cases, and
delivery takes place when the goods are made available
to the customer. Transaction price allocated to the
performance obligation is fixed at the price specified
in the customer purchase order and does not include
any estimate for variable consideration, non-cash
consideration or adjustment for the time value of money.
Measurement of the obligation to rework or replace non-
conformance is not included due to the rarity of such
occurrences. There are no assets recognised from the
costs of obtaining or fulfilling contracts with customers.
Research and development
Expenditure on research and development costs is
charged to the income statement in the period in which
it is incurred unless such costs should be capitalised
under the requirements of the applicable standard,
which is only when the future economic benefits
expected to arise are deemed probable and the costs
can be reliably measured.
Intangible assets: Goodwill
Goodwill represents the excess of the cost of acquisition
over the Group’s interest in the fair value of the
identifiable assets and liabilities of a subsidiary at the
date of acquisition. Goodwill is recognised as an asset
and reviewed for impairment at least annually.
Goodwill arising on acquisitions before the date of
transition to IFRS (1 October 2006) has been retained
at the previous UK GAAP amounts subject to being
tested for impairment at that date and at least annually
thereafter. On disposal of a subsidiary the attributable
amount of goodwill is included in the determination of
the profit or loss on disposal.
Intangible assets: Other
Separable intangible assets are recognised separately
from goodwill on all acquisitions after the date of
transition, are initially measured at fair value and
amortised over their useful economic lives. Purchased
intangible assets are capitalised at cost and amortised
over their useful economic lives. For computer software
this is typically 4 years.
52
Notes to the Group Financial Statements
Impairment of intangible assets
Investments
Goodwill is allocated to cash-generating units for the
purposes of impairment testing. The recoverable amount
of the cash-generating unit to which the goodwill relates
is tested annually for impairment or when events or
changes in circumstances indicate that it might be
impaired. Any impairment is recognised immediately in
the income statement and is not subsequently reversed.
Intangible assets other than goodwill are tested for
impairment when a trigger event occurs. Useful lives
are also examined on an annual basis and adjustments,
where applicable, are made on a prospective basis.
Recoverable amount is the higher of fair value less
costs to sell, and value in use. In assessing value in
use, the estimated future cash flows are discounted to
their present value using a pre-tax discount rate that
reflects current market assessments of the time value of
money and the risks specific to the asset for which the
estimates of future cash flows have not been adjusted.
An impairment loss is recognised to the extent that the
carrying value exceeds the recoverable amount.
An impairment loss is recognised as an expense
immediately, unless the relevant asset is carried at a
revalued amount, in which case the impairment loss
is treated as a revaluation decrease. A reversal of an
impairment loss is recognised as income immediately,
unless the asset is carried at a revalued amount, in
which case the reversal of the impairment loss is treated
as a revaluation increase.
Property, plant and equipment
Property, plant and equipment are stated at cost
less accumulated depreciation and any recognised
impairment loss. Depreciation is provided on the cost of
assets less any residual value over their estimated useful
lives, using the straight line method, as follows:
Plant & machinery
2 to 15 years
Leasehold improvements Over remaining term of lease
Fixtures & fittings
4 years
Computer equipment
4 years
During the financial year, the directors have reviewed
the useful economic life of certain plant and
machinery that were previously being depreciated
over 10 years, and have determined that these assets
have a longer estimated economic life due to regular
maintenance and capacity use, and that 15 years is
more appropriate. The effective date of this change in
policy is 1st October 2022, and the impact has been
to reduce the depreciation charge in the year and
increase the net book value of plant & machinery by
£163,000. Depreciation is not charged on assets under
construction.
The carrying values of property, plant and equipment and
investments measured using a cost basis, are reviewed
for impairment only when events indicate the carrying
value may be impaired.
Investments held as fixed assets are stated at cost less
any provision for impairment.
Inventories
Inventories are valued at the lower of cost and net
realisable value. The costs incurred in bringing each
product to its present location and condition are
accounted for as follows:
Raw materials
Cost of purchase on a first in,
first out basis.
Work in Progress and Cost of raw materials and direct
Finished goods
labour and a proportion of
manufacturing overheads based
on the normal level of activity
Net realisable value is based on the estimated selling
price less estimated costs to completion and estimated
costs necessary to make the sale. Inventory is regularly
tested for obsolescence, any items so identified are
written off to the P&L account. There is no general
obsolescence provision.
Leases – IFRS 16
The Group leases property and other equipment for
the purposes of its operations. Lease terms contain a
wide range of different terms and conditions. The lease
agreements do not impose any covenants other than the
security interests in the leased assets that are held by
the lessor.
Until the 2019 financial year, leases were classified as
an operating lease. From 1 October 2019, leases are
recognised as a right-of-use asset and a corresponding
liability at the date at which the leased asset is available
for use.
Assets and liabilities arising from a lease are initially
measured on a present value basis. The net present
value of the lease liability includes the present value of
the lease payments not made at the date of transition
and lease payments made before the commencement
date less any lease incentives received. The right-of-
use asset is measured at this net present value of
lease liability plus an estimate of the costs expected
to be incurred in returning the leased property to its
original condition. Lease payments to be made under
reasonably certain extension options are included in the
measurement of the liability.
The lease payments are discounted using the rate
implicit in the lease agreement. If that rate cannot be
readily determined, the lessee's incremental borrowing
rate is used.
Lease payments are allocated between their principal
payments and the finance cost. The finance cost is
charged to the Statement of Profit or Loss over the lease
period.
Right-of-use assets are depreciated over the life of the
lease on a straight line basis.
Notes to the Group Financial Statements
53
Short term leases with a lease term of less than 12
months or leases with low value assets are recognised
on a straight line basis as an expense in the Statement
of Comprehensive Income.
A sale and leaseback transaction is one where the Group
sells an asset and immediately reacquires the use of the
asset by entering into a lease with the buyer. The assets
are sold at fair market value, and accordingly the profit
or loss from the sale is recognised immediately in the
Statement of Comprehensive Income.
Financial Instruments
The Group does not enter into hedging or speculative
derivative contracts.
Financial assets and liabilities are recognised on the
Group’s Statement of Financial Position when the Group
becomes a party to the contractual provisions of the
instrument.
Income and expenditure arising on financial instruments
is recognised on the accruals basis, and credited or
charged to the profit and loss account in the financial
period to which it relates.
Financial liabilities and equity
Financial liabilities and equity instruments are
classified according to the substance of the contractual
arrangements entered into.
A financial liability exists where there is a contractual
obligation to deliver cash or another financial asset
to another entity, or to exchange financial assets or
financial liabilities under potentially unfavourable
conditions. In addition, contracts which result in the
entity delivering a variable number of its own equity
instruments are financial liabilities. Shares containing
such obligations are classified as financial liabilities.
Finance costs and gains or losses relating to financial
liabilities are included in the income statement. The
carrying amount of the liability is increased by the
finance cost and reduced by payments made in respect
of that liability.
An equity instrument is any contract that evidences
a residual interest in the assets of the Group after
deducting all of its liabilities. Dividends and distributions
relating to equity instruments are debited directly to
reserves. Equity instruments issued are recorded at the
proceeds received, net of direct issue costs.
Cash and cash equivalents
Cash and cash equivalents include cash at bank and in
hand, and short-term deposits with an original maturity
period of approximately one hundred days or less.
Trade and other receivables and payables
Trade and other receivables are stated at amounts
receivable less any provision for recoverability. Trade
payables are stated at their nominal value.
Government grants
Government grants towards research and development
and investment are recognised as income over the
periods necessary to match them with the related costs
and are deducted in reporting the related expense.
Foreign currencies
The Group’s functional and presentation currency is
Sterling. Transactions denominated in foreign currencies
are translated into sterling at the rates ruling at the date
of the transactions.
Monetary assets and liabilities denominated in foreign
currencies at the Statement of Financial Position
date are translated at the rates of exchange ruling at
that date. Gains and losses arising on translation are
recognised in the income statement.
On consolidation, the assets and liabilities of the Group’s
overseas operations are translated into Sterling at the
exchange rate at the date of the Statement of Financial
Position. Income and expense items are translated at
the average exchange rates for the period. Exchange
differences arising are classified as equity and are
transferred to the translation reserve. Exchange gains
and losses arising on the translation of the Group’s
net investment in foreign entities are also classified as
equity.
Share-based payments
The fair value of equity-settled share payments is
determined at the date of grant and is recognised on a
straight line basis over the vesting period based on the
Group’s estimate of options that will eventually vest.
Fair value is measured by use of a Black-Scholes pricing
model.
Retirement benefits
The Group operates a workplace pension scheme for
its employees since November 2016, and makes the
statutory minimum contributions to it.
Short-term employee benefit costs
The undiscounted amount of short-term benefits
attributable to services that have been rendered in the
period are recognised as an expense. Any difference
between the amount of cost recognised and the cash
payments made is treated as a liability or prepayment as
appropriate.
Taxation
The charge for current tax is based on the results for the
period as adjusted for items that are non-assessable or
disallowed, and is calculated using tax rates that have
been enacted or substantively enacted by the Statement
of Financial Position date.
54
Notes to the Group Financial Statements
Deferred tax assets and liabilities are recognised
where the carrying amount of an asset or liability in
the Statement of Financial Position differs from its tax
base. Recognition of deferred tax assets is restricted to
those instances where it is probable that taxable profit
will be available against which the difference can be
utilised. Deferred tax liabilities are recognised for taxable
temporary differences. Such assets and liabilities are
not recognised if the temporary difference arises from
the amortisation of goodwill or the initial recognition of
other assets and liabilities in a transaction that is not a
business combination and affects neither the tax profit
nor the accounting profit.
The amount of the asset or liability is determined
using tax rates that have been enacted or substantially
enacted at the Statement of Financial Position date, and
are expected to apply when the deferred tax assets or
liabilities are settled or recovered. Deferred tax balances
are not discounted.
Deferred tax is charged or credited in the income
statement except where it relates to items charged or
credited to equity, in which case the deferred tax is dealt
with there. Research and Development Tax Credits are
recognised on an accruals basis.
Borrowings
Borrowings are classified as current liabilities unless the
Group has an unconditional right to defer settlement
of the liability for at least twelve months after the
Statement of Financial Position date. All borrowing costs
are recognised in the income statement in the period in
which they are incurred.
Provisions
Provisions are made when the Group has a present
obligation as a result of past events, it is probable that
an outflow of economic benefits will be required to
settle the obligation, and the amount can be reliably
estimated. Provisions are discounted to present value
where the impact is significant, using a discount rate
that reflects current market assessments of the time
value of money and the risks specific to the obligation.
Critical accounting estimates and judgements:
Estimates and judgements are continually evaluated and
are based on historical experience and other factors,
including expectations of future events that are believed
to be reasonable under the circumstances.
The Group makes estimates and assumptions concerning
the future. The resulting accounting estimates will, by
definition, seldom equal the related actual results. The
estimates and assumptions that have a significant risk of
causing a material adjustment to the carrying amounts of
assets and liabilities within the next financial period are
addressed below:
(a) Property, plant and equipment represents a
significant proportion of the asset base of the Group
being 55% of the Group's total assets. The estimates
and assumptions made to determine their carrying
value and related depreciation are significant to
the Group's financial position and performance. The
charge in respect of periodic depreciation is derived
after determining an estimate of an asset's expected
useful life and the expected residual value at the
end of its life. No residual value is expected for any
of the Group’s assets and, apart from some items of
high-value specialised equipment, where the useful
economic life is estimated to be 15 years, other plant
and machinery is estimated to have between two and
ten years of useful life from the date of purchase or
installation.
(b) Going concern basis including its effect on the
impairment of assets. The Group monitors cash flow
as part of its day to day control procedures and
management consider cash flow projections on a
monthly basis and also prepares detailed forward
projections for future periods which also include
various scenarios. As a consequence, the Directors are
satisfied that the Group is able to maintain sufficient
resources to continue in operation for the foreseeable
future. Accordingly, they have adopted the going
concern basis in preparing the financial statements.
Were this not to be the case the carrying value of the
Group’s assets may have to be impaired.
(c) The implementation of IFRS 16 requires the Group
to account for its leases as right-of-use assets over
the life of the lease agreement. The present value of
the lease liability on inception requires management
to assess various factors including the discount rate
and the life of the lease and the extent to which any
options to extend or break the lease are exercised.
These factors have a resulting impact in determining
the present value of the lease liability on inception.
Notes to the Group Financial Statements
55
2. Segmental analysis
Under IFRS8, operating segments are defined as a component of the entity (a) that engages in business activities from
which it may earn revenues and incur expenses (b) whose operating results are regularly reviewed and (c) for which
discrete financial information is available. The Group management is organised in to UK and USA operation and Corporate
central functions, and this factor identifies the Group’s reportable segments.
Year ended
30 September 2023
UK operation
£000
2023
2022
as restated
US operation
£000
2023
2022
as restated
Corporate
£000
2023
2022
as restated
Total
£000
2023
2022
as restated
External revenue
3,154
3,076
2,345
1,939
-
-
5,499
5,015
Operating profit / (loss)
(776)
(1,545)
759
201
(1,014)
(805)
(1,031)
(2,149)
Segment assets
6,196
6,855
2,054
2,323
149
557
8,399
9,735
Expenditure for
non-current assets
22
221
23
81
-
-
45
302
Segment liabilities
2,594
2,962
1,225
893
288
350
4,107
4,205
Following a review of practice and the key profit metric used in the Group, the Board has decided that operating profit
or loss is a more appropriate measure than profit or loss after tax, and consequently the prior year has been restated
to report the segmental operating profit or loss. The Group currently has a single business product, so no secondary
analysis is presented. Revenue from external customers is attributed according to their country of domicile. Turnover by
geographical destination is as follows:
External sales
2023
2022
UK
£000
1,938
1,314
Europe
£000
N America
£000
Rest of World
£000
95
666
3,396
3,007
70
28
Total
£000
5,499
5,015
The UK operation sells to the UK, Europe and some North American customers, while the US operation only sells to North
America. During 2023, of the £3,396,000 sales to North American customers, £1,051,000 originated from the UK operation.
All revenue is recognised at a point in time and no revenue is recognised over time.
Three external customers (2022 – four) contributed more than 10% of the Group’s continuing external sales for the year
ended 30 September 2023. The external sales for these customers were £1,429,000, £1,238,000 and £1,058,000 which
have been recorded within both the UK and US operation reportable segments, excluding central costs.
56
Notes to the Group Financial Statements
3. Operating loss
This is stated after charging / (crediting):
Auditor’s remuneration
fees payable to the Company’s current auditor for:
- the audit of the Group’s accounts
- tax compliance
Cost of inventory recognised as an expense
Research and development
Income from grants
Share option charge / (credit)
Gain on sale and leaseback
Impairment of goodwill
Depreciation and amortisation - owned assets
- right of use assets
Exchange differences
2023
£000
39
8 5
1,351
424
(110)
24
(159)
69
677
186
38
2022
£000
37
1,561
483
(201)
(9)
-
-
890
318
(31)
Earnings Before Interest, Taxation, Depreciation and Amortisation (“EBITDA”) is a key financial performance indicator used
by management to assess the operational performance of the Group. This may be reconciled to the Income Statement as
follows:
Operating loss
Add back non-cash other operating costs:
Impairment of goodwill
Depreciation and amortisation of owned assets
Depreciation and amortisation of right of use assets
EBITDA
4. Finance income
Interest on bank deposits
5. Finance costs
Interest on loans
Interest on right of use assets
2023
£000
(1,031)
69
677
186
(99)
2023
£000
3
2023
£000
59
106
165
2022
£000
(2,149)
-
-
890
318
(941)
2022
£000
4
2022
£000
49
80
129
Notes to the Group Financial Statements
57
6. Employees
The average number of employees, including executive directors but not including non-executive directors, during the year
comprised:
2023
2022
Technical
Production
Sales and marketing
Management and administration
Staff costs, including executive and non-executive directors, amounted to:
Wages and salaries
Social security costs
Employer pension contributions
Share option expense / (credit)
12
23
5
6 5
46
2023
£000
2,481
261
44
24
2,810
13
20
6
44
2022
£000
2,519
271
45
(9)
2,826
Of the total share option charge of £24,000 in the year, £20,000 relates to options held by directors. The Group
contributes to defined contribution plans for employees. The assets of the scheme are held separately from those of the
Group in independently administered funds. The Group contributes 3% (2022: 3%) of pensionable salary to the scheme for
all eligible employees who opted into the scheme. The pension cost charge represents contributions payable by the Group
to the fund. There were no amounts outstanding to be paid at the year end.
The directors are the Key Management Personnel of the Group. Remuneration of directors during the year was as follows:
Philip Kirkham (Chief Executive)
Dr Yuri Zhuk (Technical Director)
Simon Hallam (Finance Director)
Andrew Magson (Non-Executive Chair)
Andrew Boyce (Non-Executive Director)
Tim Rice (Non-Executive Director)
Robert Goddard (former Non-Executive Chairman)
Total directors’ remuneration
Salary
Salary
Pension
Salary
Other benefits
Pension
Fees
Fees
Fees
Fees
2023
£000
203
125
8 8
105
8 8
1
56
25
25
16
572
2022
£000
199
122
103
1
-
25
25
50
541
58
Notes to the Group Financial Statements
7. Taxation
(a) Tax on ordinary activities:
UK Corporation Tax Charge
Adjustment in respect of prior years
Deferred Tax
Origination and reversal of timing differences
Adjustments in respect of prior periods
Effect of rate change on opening balance
Tax
2023
£000
(76)
1
(75)
-
-
-
(75)
2022
£000
(73)
(13)
(86)
-
-
-
(86)
(b) Factors affecting current tax charge:
The tax assessed on the profit on ordinary activities for the year is lower than (2022: lower than) the effective rate of
corporation tax in the UK of 22% (2022: 19%) as the UK companies are loss making.
Loss on ordinary activities before taxation
Loss on ordinary activities by rate of tax
Effect of:
Expenses not deductible for tax purposes
Deferred tax not recognised
Adjustment in respect of prior periods
Adjustment to opening / closing deferred tax
R&D enhanced expenditure
R&D surrendered
Non-taxable income
Other differences
Total current tax (note 7a)
2023
£000
(1,193)
(262)
(299)
597
1
(72)
(138)
105
(19)
12
(75)
2022
£000
(2,274)
(432)
126
175
(13)
-
(75)
133
-
-
(86)
The standard rate of corporation tax in the UK is currently 25%, although the effective rate is 22% following the increase
in the rate from 19% to 25% on 1st April 2023 (2022: 19%). The Group has unutilised trading tax losses of approximately
£13.1m (2022: £11.6m) available to carry forward against future trading profits. The general principle in IAS 12 is that a
deferred tax asset is recognised for unused tax losses to the extent that it is probable that future taxable profits will be
available against which the unused tax losses can be utilised. No deferred tax asset has been recognised in respect of
these amounts due to the unpredictability of future taxable profits.
8. Earnings per ordinary share
(Loss) on ordinary activities after tax
Basic earnings per ordinary share:
2023
£000
(1,118)
2022
£000
(2,188)
Weighted average number of ordinary shares in issue
58,901,959
56,058,053
Earnings per share
(1.9)p
(3.9)p
As net losses were recorded in 2023 and 2022, the potentially dilutive share options are anti-dilutive for the purposes of
the loss per share calculation and their effect is therefore not considered.
Notes to the Group Financial Statements
59
9. Goodwill
Cost at 1 October and 30 September
Amortisation b/fwd
Impairment in the year
Amortisation c/fwd
Net book value at 1 October
Net book value at 30 September
2023
£000
69
-
69
69
69
-
2022
£000
69
-
-
-
69
69
Goodwill relates to the acquisition of the net liabilities of Isle Hardide Limited by Hardide Coatings Limited which
occurred in October 2000 and which were valued at £99,095, for which no consideration was paid. The goodwill had
previously been amortised over 20 years under UK GAAP until conversion to IFRS on 1 October 2006. Total amortisation up
to that date amounted to £30,000 giving a net book value of £69,095.
The Group tests whether goodwill has suffered any impairment on an annual basis. The Directors consider there to be
one cash generating unit for the purposes of assessing for impairment of goodwill. Due to the continuing uncertainties in
respect of future trading and cash flow expectations, the directors have decided to impair the net book value of goodwill
during the year, and this is included in other operating costs in the Statement of Comprehensive Income.
10. Intangible assets
Cost at 1 October
Additions
Disposals
Cost at 30 September
Amortisation b/fwd
Disposals
Amortisation in the year
Amortisation c/fwd
Net book value at 1 October
Net book value at 30 September
2023
2022
Computer software Computer software
£000
£000
77
2
-
79
58
-
12
70
19
9
78
1
(2)
77
42
(2)
18
58
36
19
60
Notes to the Group Financial Statements
11. Property, plant and equipment
Cost at 1 October 2021
Additions
Disposals
Exchange differences
Cost at 30 September 2022
Depreciation at 1 October 2021
Provided in the year
Disposals
Exchange differences
Depreciation at 30 September 2022
Net book value at 1 October 2021
Net book value at 30 September 2022
Cost at 1 October 2022
Additions
Disposals
Exchange differences
Cost at 30 September 2023
Depreciation at 1 October 2022
Provided in the year
Disposals
Exchange differences
Depreciation at 30 September 2023
Net book value at 1 October 2022
Net book value at 30 September 2023
Leasehold
buildings
£000
Plant, vehicles
and fixtures
£000
Computer
equipment
£000
1,782
23
(264)
50
1,591
531
146
(263)
32
446
1,251
1,145
1,591
-
-
(27)
1,564
446
134
-
(17)
563
1,145
1,001
7,815
274
(341)
600
8,348
3,420
701
(340)
345
4,126
4,395
4,222
8,348
38
-
(312)
8,074
4,126
508
-
(182)
4,452
4,222
3,622
164
4
(25)
7
150
110
25
(25)
5
115
54
35
150
5
-
(3)
152
115
23
-
(3)
135
35
17
Total
£000
9,761
301
(630)
657
10,089
4,061
872
(628)
382
4,687
5,700
5,402
10,089
43
-
(342)
9,790
4,687
665
-
(202)
5,150
5,402
4,640
During the financial year, the directors have reviewed the useful economic life of certain plant and machinery that were
previously being depreciated over 10 years, and have determined that these assets have a longer estimated economic life
due to regular maintenance and capacity use, and that 15 years is more appropriate. The effective date of this change in
policy is 1st October 2022, and the impact has been to reduce the depreciation charge in the year and increase the net
book value of plant & machinery by £163,000.
Notes to the Group Financial Statements
61
12. Right of use assets
Cost at 1 October 2021
Additions
Disposals
Adjustments
Exchange differences
Cost at 30 September 2022
Depreciation at 1 October 2021
Provided in the year
Disposals
Adjustments
Exchange differences
Depreciation at 30 September 2022
Net book value at 1 October 2021
Net book value at 30 September 2022
Cost at 1 October 2022
Additions
Disposals
Exchange differences
Cost at 30 September 2023
Depreciation at 1 October 2022
Provided in the year
Disposals
Exchange differences
Depreciation at 30 September 2023
Net book value at 1 October 2022
Net book value at 30 September 2023
Buildings
£000
Equipment
£000
Vehicles
£000
2,344
68
(255)
-
60
2,217
521
288
(255)
4
29
587
1,823
1,630
2,217
332
(322)
(31)
2,196
587
162
(183)
(15)
551
1,630
1,645
71
-
(13)
-
-
58
42
19
(13)
-
-
48
29
10
58
-
-
-
58
48
10
-
-
58
10
-
41
-
-
2
-
43
12
11
-
-
-
23
29
20
43
46
(19)
-
70
23
14
(19)
-
18
20
52
Total
£000
2,456
68
(268)
2
60
2,318
575
318
(268)
4
29
658
1,881
1,660
2,318
378
(341)
(31)
2,324
658
186
(202)
(15)
627
1,660
1,697
62
Notes to the Group Financial Statements
13. Current assets
Inventories
Raw materials and consumables
Manufactured parts for resale
Work in progress
Receivables
Trade receivables
Other receivables
Other current financial assets
Prepayments
VAT receivable
R&D tax receivable
Accrued income
Cash and cash equivalents
Sterling
US Dollar
Total current assets
2023
£000
2022
£000
187
43
6
236
729
13
742
238
-
75
22
335
271
469
740
2,053
412
52
23
487
942
13
955
217
73
160
-
450
468
225
693
2,585
There is no general provision for bad debts. During the year, no specific trade receivables were classified as a bad debt
(2022: £Nil). Trade receivables are regularly reviewed for age and possible impairment. It is the directors’ opinion that, as
at the Statement of Financial Position date, no trade receivable required impairment. The ageing of trade receivables is as
follows:
Current
1 month
2 months
3 months
More than 3 months
Total trade receivables
2023
£000
429
285
14
-
1
729
2022
£000
526
200
108
22
86
942
A total of £300,000 (2022: £416,000) trade receivables are over 30 days old and therefore overdue.
Notes to the Group Financial Statements
63
14. Current liabilities
Trade payables
Taxation and social security costs
VAT payable
Accruals
Loans
Deferred income
Right of use lease liability
Total current liabilities
15. Provisions
Provision at 1 October 2021
Provisions utilised
Provisions charged
Provision at 30 September 2022
Provision at 1 October 2022
Provisions utilised
Provisions charged
Provision at 30 September 2023
Maturity analysis:
5+ years
2023
£000
625
67
24
203
919
253
17
182
1,371
Onerous lease
£000
Dilapidations
£000
4
(4)
-
-
-
-
-
-
80
(98)
68
50
50
-
-
50
2023
£000
50
50
2022
£000
812
65
-
200
1,077
238
19
201
1,535
Total
£000
84
(102)
68
50
50
-
-
50
2022
£000
50
50
64
Notes to the Group Financial Statements
16. Non-current other financial liabilities
Loans
Deferred income
Right of use lease liability
Loans
Total loans
Maturity analysis:
Within 1 year
1 to 2 years
2 to 3 years
3 to 4 years
4 to 5 years
5+ years
Right of use lease liabilities
Total lease liabilities
Maturity analysis:
Within 1 year
1 to 2 years
2 to 3 years
3 to 4 years
4 to 5 years
5+ years
2023
£000
508
72
580
2,106
2023
£000
761
253
212
144
76
57
19
2023
£000
2,288
182
192
196
199
208
1,311
2022
£000
780
98
878
1,742
2022
£000
1,018
238
250
217
149
81
83
2022
£000
1,943
201
196
174
133
139
1,100
In 2019, the Group entered into a loan agreement with Martinsville Henry County Economic Development Corporation for
a 5 year term loan of $240,000 (£195,000). The loan was secured against the reactor and Hardide plc acted as guarantor.
In March 2020, Martinsville Henry County Economic Development Corporation determined to forgive the entire remaining
loan balance of $182,000 (£142,000) including, without limitation, principal, interest and any other sums due under the
agreement. This grant is now being amortised as deferred income over the remaining useful life of the reactor.
In January 2021, the Group entered into a £250,000 Coronavirus Business Interruption Loan Scheme (CBILS) backed loan
facility with Nucleus Cash Flow Finance Limited. The term is over 60 months at an interest rate of 11%. The first loan
repayment instalment commenced in February 2022.
In March 2021, the Group also entered into a £250,000 Coronavirus Business Interruption Loan Scheme (CBILS) backed
loan facility with Maven Capital Partners LLP. The term is over 48 months at an interest rate of 8%. The first loan
repayment instalment commenced in March 2022.
On 19 January 2022, the Group entered into a $438,000 (£325,000) asset finance agreement with The American National
Bank and Trust Company, Hardide Coatings Inc’s US bankers. The term is over 60 months at an interest rate of 4%. The
first loan repayment instalment commenced in February 2022.
Notes to the Group Financial Statements
65
17. Share capital
Allotted ordinary shares of 4p each
Allotted deferred shares of 0.9p each
2023
2022
Number
000
Value
£000
Number
000
Value
£000
58,902
2,356
58,902
2,356
189,642
1,707
189,642
1,707
No employee share options were exercised during the year (2022: None).
A description of the Company’s reserves is as follows:
Share capital - represents the nominal value of shares that have been issued.
Share premium account - includes any premiums received on issue of share capital. Any transaction costs associated
with the issuing of shares are deducted from share premium.
Share-based payments - this comprises the share-based payments reserve, debited or credited with amounts charged to
the profit and loss account for share options.
Profit and loss account - includes all current and prior period retained profits and losses.
18. Share options
Outstanding at 30 September 2022
Exercisable at 30 September 2022
Granted during year
Exercised during year
Lapsed during year
Outstanding at 30 September 2023
Exercisable at 30 September 2023
The current directors’ interests in share options are as follows:
Philip Kirkham (Chief Executive)
Yuri Zhuk (Technical Director)
Simon Hallam (Finance Director)
Number
4,345,522
439,550
-
-
520,000
3,825,522
314,550
Number
1,483,200
677,016
600,000
Weighted average
exercise price
44.9p
43.7p
-
-
46.9p
44.6p
55.4p
Weighted average
exercise price
46.5p
46.5p
30.0p
None of the directors exercised options during the year.
In addition, Robert Goddard, the Group’s former Chairman who was a director until 24 January 2023, holds 150,000
share options that were granted on 25 February 2021 at an exercise price of 31.0p. The Remuneration and Nominations
Committee approved their continuation under the existing terms, with the extension of their potential date of exercise
until three months after vesting.
The fair values of employee options granted are measured at date of grant by the use of a Black-Scholes pricing model,
the assumptions used in the model vary depending on the date of grant and vesting period. Inputs include share price at
date of grant, exercise price, historical volatility, the expected life of the option, and the risk-free interest rate. Expected
volatility is calculated from the recent historical volatility of the share price. No other features are incorporated into the
measurement of fair value.
All options have a maximum term of 10 years from date of grant and are settled with equity upon exercise. No options
expired during the year. Vesting criteria are a mix of time-based and performance-based. The performance criteria are
the market capitalisation or price per share of the Company, or Group profitability, or new business. At 30 September
2023 the weighted average remaining contractual life of all outstanding options was 6 years and 6 months (2022: 6 years
and 6 months).
The charge to the income statement for share options during the year was £24,000 (2022: £9,000 credit).
66
Notes to the Group Financial Statements
19. Post Balance Sheet Events
As described in more detail in the Chair’s Statement, trading conditions became more challenging in the first part of the
financial year ending 30 September 2024.
The Group is expecting to raise a further c.£0.75m of equity finance in February 2024.
20. Related Party Transactions
There were no related party transactions to report with either directors or key management other than those disclosed in
note 6.
21. Capital Commitments
At the Statement of Financial Position date, the Group had capital commitments of £11,000 for the purchase of equipment
(2022: £19,000).
22. Financial Instruments – Risk Management
In common with other businesses, the Group is exposed to risks that arise from its use of financial instruments.
The Group’s principal financial instruments are financial assets comprising trade and other receivables (excluding
prepayments) and cash balances; and financial liabilities comprising trade payables as disclosed in notes 13 and 14. These
are all measured at fair value with changes in carrying amount charged or credited to the Income Statement, with the
exception of borrowings which are measured at amortised cost.
Exposure to credit, liquidity, currency and interest rate risks arises in the normal course of the Group’s business. The
Group does not enter into derivative financial instruments.
Credit risk
The Group’s credit risk is primarily attributable to its credit sales. The Group has significant concentration of sales to
a few key customers, however, since the ultimate customers for the Group’s products are predominantly blue-chip
multinational companies, the board believes that this is not a significant risk. Credit risk also arises from cash and
deposits with banks. These risks are reviewed regularly by the board, in particular the ageing of trade receivables and the
amount of cash on deposit with various institutions. As at 30 September 2023 the Group had trade receivables and other
receivables of £742,000 (2022: £955,000) and cash deposits of £740,000 (2022: £693,000).
The Group does not consider the effect of expected credit losses to be material.
Liquidity risk
The Group seeks to manage financial risk by ensuring sufficient liquidity is available to meet foreseeable needs and
to invest cash assets safely and profitably. The interest rate exposure of the Group as at 30 September 2023 and the
maturity profile of the carrying value of the Group’s financial liabilities are shown in note 14. All financial liabilities will be
settled within six months unless stated in notes 15 and 16. The Group’s policy is to ensure that it has sufficient cash to
allow it to meet its liabilities. This risk is monitored by the board which receives forecast cash flows on a monthly basis,
an annual budget and quarterly revenue and cost forecasts. The Group currently has no bank credit facility.
Currency risk
The Group is exposed to translation and transaction foreign exchange risk arising because the Group has operations in
more than one country. As such, the Group’s net assets arising from such overseas operations are exposed to currency
risk resulting in gains or losses on retranslation into sterling.
Foreign exchange risks arise when Group companies enter into transactions denominated in a currency other than their
functional currency. Movements in exchange rates also affect the value of the Group’s foreign currency cash balances in
the UK. Exchange rate movements during the year resulted in a loss of £38,000 (2022: £31,000 gain).
Interest rate risk
Interest rate risk arises on borrowings and cash balances which are at floating interest rates. Changes in rates could have
the effect of either increasing or decreasing the Group's net profit. The major risk is to UK rates and there is no exposure
to rates in the USA or Europe.
As at 30 September 2023, the Group had no floating rate borrowings, and all its cash deposits were in floating rate
accounts.
Parent Company Statement of Financial Position
67
Parent Company Statement of
Financial Position
For Hardide plc, company registered number 05344714 at 30 September 2023
Assets
Non-current assets
Investments
Total non-current assets
Current assets
Trade and other receivables
Cash and cash equivalents
Total current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Financial liabilities
Total current liabilities
Net current (liabilities) / assets
Non-current liabilities
Financial liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Share capital
Share premium
Retained earnings
Share-based payments reserve
Note
3
5
6
6
7
8
2023
£000
1,272
1,272
161
15
176
2022
£000
1,269
1,269
214
345
559
1,448
1,828
143
63
206
(30)
94
94
300
1,148
4,063
19,242
(22,734)
577
131
63
194
365
156
156
350
1,478
4,063
19,242
(22,380)
553
Total equity
1,148
1,478
Under section 408 of the Companies Act 2006 the company has not included its own profit and loss account in these
financial statements. The parent company’s loss for the year was £354,000 (2022: £3,353,000) after accounting for a
reduction in the provision against the intercompany loan of £2,260,000, an increase in the provision against the inter-
company trading debtor of £565,000 respectively, and an exchange rate loss on intercompany loan of £1,096,000.
The accompanying notes form an integral part of these financial statements.
The financial statements were approved and authorised for issue by the Board on 21 February 2024.
Philip Kirkham
Director
Simon Hallam
Finance Director
68
Parent Company Statement of Changes in Equity
Parent Company Statement of
Changes in Equity
For the year ended 30 September 2023
At 1 October 2021
Issue of new shares
Share options
Loss for the year
Share
Capital
£000
3,942
121
-
-
Share Share-based
Payments
£000
Premium
£000
Retained
Earnings
£000
18,854
388
-
-
562
(19,027)
-
(9)
-
-
-
(3,353)
At 30 September 2022
4,063
19,242
553
(22,380)
At 1 October 2022
Share options
Loss for the year
4,063
19,242
-
-
-
-
At 30 September 2023
4,063
19,242
553
24
-
577
(22,380)
-
(354)
(22,734)
Total
Equity
£000
4,331
509
(9)
(3,353)
1,478
1,478
24
(354)
1,148
Notes to the Parent Company Accounts
69
Notes to the
Parent Company Accounts
1. Principal Accounting Policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these
accounting policies and in accordance with Financial Reporting Standard 101 'Reduced Disclosure Framework' and the
Companies Act 2006.
The preparation of financial statements in compliance with FRS 101 requires the use of certain critical accounting
estimates. It also requires management to exercise judgement in applying the Company's accounting policies.
The following principal accounting policies have been applied:
Financial Reporting Standard 101 - reduced disclosure exemptions
The Company has taken advantage of the following disclosure exemptions under FRS 101:
§ the requirements of IFRS 7 Financial Instruments: Disclosures
§ the requirements of the second sentence of paragraph 110 and paragraphs 113(a), 114, 115, 118, 119(a) to (c), 120 to 127 and
129 of IFRS 15 Revenue from Contracts with Customers
§ the requirement in paragraph 38 of IAS 1 'Presentation of Financial Statements' to present comparative information in
respect of:
- paragraph 79(a)(iv) of IAS 1;
§ the requirements of paragraphs 10(d), 10(f), 16, 38A, 38B, 38C, 38D, 40A, 40B, 40C, 40D, 111 and 134-136 of IAS 1
Presentation of Financial Statements
§ the requirements of IAS 7 Statement of Cash Flows
§ the requirements of paragraphs 30 and 31 of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors
§ the requirements of paragraph 17 and 18A of IAS 24 Related Party Disclosures
§ the requirements in IAS 24 Related Party Disclosures to disclose related party transactions entered into between two
or more members of a group, provided that any subsidiary which is a party to the transaction is wholly owned by such a
member
This information is included in the consolidated financial statements of Hardide Plc as at 30 September 2023 on pages 46
to 66.
2. Employees
The average number of employees, including executive directors but excluding non-executive directors, during the year
comprised:
2023
Number
2022
Number
Management and admin
Sales and marketing
Technical
Staff costs, including executive and non-executive directors, during the year amounted to:
Wages and salaries
Social security costs
Employer pension costs
Share option charge / (credit)
2 2
1
4 5
7
2023
£000
744
88
15
21
868
1
8
2022
£000
716
86
15
(11)
806
Details of individual directors’ remuneration are included in note 6 to the Group financial statements.
70
Notes to the Parent Company Accounts
3. Investments
Investments in subsidiaries
2023
£000
1,272
2022
£000
1,269
At 30 September 2023 the company held 100% of the share capital of the following subsidiaries:
Hardide Coatings Limited
Hardide Coatings, Inc
Hardide Aerospace Coatings Limited
Ordinary
Ordinary
Ordinary
100%
100%
100%
UK
USA
UK
Surface engineering
Surface engineering
Dormant company
Class of share
Amount
Country
Nature of business
4. Amounts owed by group undertakings
The amounts owed by Hardide Coatings Inc. amounting to £10,023,000 (2022: £12,283,000) has been classified as a non-
current asset. A provision has been made for the full amount owed because of doubts about its recoverability. The
reduction in debt provision during the year of £2,260,000 (2022: £651,000 increase) has been credited to the profit and
loss account in the year.
5. Trade and other receivables
Prepayments and accrued income
VAT receivable
R&D tax receivable
Amounts owed by group undertakings
Provision against amounts owed by group undertakings
2023
£000
59
27
75
4,712
(4,712)
161
2022
£000
37
17
160
4,147
(4,147)
214
The amounts owed by group undertakings are unsecured and interest free, and are repayable on demand. A provision has
been made for the full amount owed because of doubts about its recoverability. The increase in debt provision during the
year of £565,000 (2022: £4,147,000) has been debited to the profit and loss account in the parent company in the year.
6. Current liabilities
Trade payables
Social security and other taxes
Accruals and deferred income
Loans
Total current liabilities
2023
£000
67
30
46
143
63
206
2022
£000
64
28
39
131
63
194
Notes to the Parent Company Accounts
71
7. Non-current other financial liabilities
Loans
2023
£000
94
2022
£000
156
On 17 March 2021, the company entered into a £250,000 Coronavirus Business Interruption Loan Scheme (CBILS) backed
loan facility with Maven Capital Partners LLP. The term is over 48 months at an interest rate of 8%. The first loan
repayment instalment commenced in March 2022.
8. Share capital
Allotted ordinary shares of 4p each
Allotted deferred shares of 0.9p each
2023
2022
Number
000
Value
£000
Number
000
Value
£000
58,902
2,356
58,902
2,356
189,642
1,707
189,642
1,707
Details of the movement in share capital can be found in note 17 to the Group financial statements.
72
Directors and Advisers
Directors and Advisers
Directors
A Magson
P D Kirkham
S A Hallam
Y N Zhuk
A R Boyce
T J Rice
M R Hamblin
Secretary
S A Hallam
Auditor
Joint Brokers
James Cowper Kreston Audit LLP
2 Chawley Park
Cumnor Hill
Oxford
OX2 9GG
Cavendish Capital Markets Limited
One Bartholomew Close
London
EC1A 7BL
Allenby Capital Limited
5 St Helen’s Place
London
EC3A 6AB
Banker
Nominated Adviser
Lawyer
Royal Bank of Scotland plc
36 St Andrew Square
Edinburgh
EH2 2YB
Cavendish Capital Markets Limited
One Bartholomew Close
London
EC1A 7BL
Blake Morgan LLP
New Kings Court
Tollgate, Chandler's Ford
Eastleigh, Hampshire
SO53 3LG
Registrar
Patent Agent
Registered Office
and Principal Place of Business
Share Registrars Limited
3 The Millennium Centre
Crosby Way
Farnham
Surre
GU9 7XX
HGF Limited
1 City Walk
Leeds
LS11 9DX
Hardide plc
9 Longlands Road
Bicester
Oxfordshire
OX26 5AH
Hardide plc Annual Report 2023
Hardide plc is the leading global innovator and provider
of advanced tungsten carbide coatings that significantly
increase the working life of critical metal components
operating in abrasive, erosive, corrosive and chemically
aggressive environments.
Hardide® is a family of nanostructured
and patented, low temperature CVD
(chemical vapour deposition) coatings
which provide exceptional wear and
corrosion resistance and uniquely
combine extreme toughness with
ductility. Our coatings are ‘value-adding’
to components and lower operational
costs by reducing downtime, increasing
productivity and improving performance.
They can be precision applied to
external and internal surfaces including
complex geometries, enabling a level of
engineering design flexibility not possible
with alternative technologies.
Hardide surface engineering technology
transforms the way that parts perform
under severe service conditions.
Previously, levels of friction, abrasion and
aggressive chemical attack have led to
part failure, downtime and extreme cost.
Our coatings are enabling customers in
high wear/high value industries including
energy, aerospace, flow control, power
generation and precision engineering
to optimise part life, improve product
performance and make significant
operating cost savings. The Group has
manufacturing facilities in Oxfordshire, UK
and Virginia, USA.
.
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Annual Report
2023
www.hardide.com
© Hardide plc 2024