Page 10 - Hardide-Annual-Report-2021
P. 10

 10 Chairman's and CEO's Report
End-users of Hardide’s coatings experience considerable benefits. Among other things, these include some or all of: reduced maintenance costs, lower environmental impact, enhanced corrosion resistance and durability. In many cases, these features provide the customer with significant competitive advantage. Moreover, there are high barriers to replacement of many of Hardide’s coatings once they are in use. In such cases, there would be considerable switching costs for the end user. Taken all together, these features can make it very hard for a competitor to displace Hardide’s coating.
Over recent years, the Group has developed three-way partnerships with end-users of Hardide’s coatings and their Tier 1 suppliers, and is seeking further opportunities for such push-pull marketing.
The Group’s high operational gearing supports strongly its strategy to continue investment in business development, marketing and technology. Also, there
is great strategic advantage in our robust portfolio of patents, coupled with the unique knowledge and skills embedded among our staff and not found elsewhere. Together, these are part of our Core Competence, which creates sustainable competitive advantage.
Core Competence
In summary, the Group’s Core Competence is made up of:
• unique and valuable technology;
• strong IP;
• technical and operational knowledge embedded in employees;
• high switching costs for customers; and
• long-term relationships with customers and end users.
In this context, the definition of ‘Core Competence’ is the set of features or competitive advantages that provide potential access to a wide variety of markets, make a significant contribution to benefits perceived by the end user and are difficult or impossible for competitors to imitate.
Strategic Progress
The Group continues to increase the number of
its customers at the same time as diversifying its customer base and target industries. Regular demand from Airbus and other aerospace customers is expected to commence soon, and the coating of turbine blades for power generation has already resulted in our first order from that industry. In addition, the Group is working on a new opportunity with a large electric vehicle manufacturer.
Meanwhile, there is now a strong pipeline of prospects for exciting short- and medium-term opportunities with turbines and in the alternative energy sector; together with new applications in oil & gas industries.
Investment in marketing, business development, equipment and R&D will continue.
In summary, although a good improvement in financial performance has been slow in coming, the Board now has a well-founded and positive view of Hardide's potential for profitable growth.
The last 18 months have been extremely challenging for our employees. They have had to navigate the uncertainty and change brought about by the pandemic, at home and in the workplace. The
Board would like to thank our people for their hard work, flexibility and positive attitude in such difficult circumstances. We are pleased that we were able to utilise the support packages available in the UK and US, meaning that we did not have to reduce the number of our employees.
The Board also thanks shareholders and other stakeholders for their continued loyalty and encouragement.
Demand is now resurgent across all our sectors, and we have a healthy pipeline of exciting opportunities in current and new markets. Test programmes that have been on hold or slowed by the pandemic are once again gathering pace.
Rising global demand for energy, and the increasing
oil price, provide favourable conditions for the return of strong revenues from our oil & gas customers. Recovery in the aerospace market is forecast to strengthen in 2022 and beyond, and the Board expects revenues
from the coating of multiple aerospace parts and turbine components. Also, we look forward to successful developments in the EV market.
The continuing growth in our order book and the strong first quarter of FY22 give the Board confidence that revenues will strengthen markedly, and therefore the Group’s financial performance will improve significantly in FY22. The Board continues to monitor carefully the Group’s projected cash position and believes that its reserves will be sufficient for the foreseeable future.
Robert Goddard
14 February 2022
Philip Kirkham
14 February 2022

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