Haydale reports postponement of some projects

21st Jun 2023 14:17

(Sharecast News) - Haydale Graphene said in a trading update on Wednesday that certain projects scheduled to start in June had been postponed until the first quarter of the next financial year.

The AIM-traded firm said it expected to announce revenue for the year above market expectations, primarily driven by a robust performance from its operations in the US.

However, the revenue growth from its operations in the UK had been slower than anticipated.

Despite that, gross profit was projected to be in line with market expectations, with minimal dilution of gross margin due to the sales mix.

Haydale said it had made significant investments in enhancing its capabilities during the prior year, and the ongoing need to enhance operational capacity had led to higher adjusted administrative costs.

Additionally, there had been a lower absorption of overheads than expected, further contributing to the increase in overhead costs.

As a result, the revenue uplift at the LBITDA level was expected to be similar to, or slightly outside of, the previous year.

To address the challenges, the company said it had implemented various cost reduction measures throughout the financial year.

Haydale explained that it was actively targeting additional cost savings, aiming to reduce adjusted overheads in the upcoming financial year.

The firm said it anticipated that its year-end net cash position would remain broadly neutral compared to the previous year.

Its board said it was actively exploring the possibility of securing additional capital facilities based on the performance of its US operations.

Looking ahead to the 2024 financial year, the directors said they expected the commercial momentum achieved during the current year to continue.

However, they also anticipated a slower-than-expected revenue build compared to previous forecasts.

"Our transition from a research and development focussed organisation to a commercial operation continues and the prognosis for the business remains very positive," said chief executive officer Keith Broadbent.

At 1321 BST, shares in Haydale Graphene Industries were down 4.86% at 1p.

Reporting by Josh White for Sharecast.com.