Haydale lowers guidance as US and UK sales stall
Advanced materials group Haydale Graphene Industries lowered full-year guidance on Thursday following slow sales in both the US and the UK to start 2020.
Haydale said it had decided to close its loss-making manufacturing facility in Taiwan and move capacity to its Knowledge Centre in Bangkok, Thailand.
The relocation of the group's Taiwan operations was said to lead to a second-half revenue shortfall of approximately £410,000 but highlighted that it would have a positive effect on group underlying earnings and reduce its cash burn.
Haydale also said HCT, the group's US unit, had witnessed soft demand for silicon carbide whiskers and blends, and also noted that production of its new blanks production line had started later than originally scheduled due to "some initial teething issues".
However, Haydale said strong initial demand since November had given it confidence to move to a double-shift pattern from February 2020 but still warned that first-half sales would be "materials lower" year-on-year.
The AIM-listed group added that its UK operations had made "meaningful strides" towards commercialising its proprietary technology but said even though it recorded a small rise in like-for-like sales, Haydale fell short of expectations due to longer than anticipated lead times.
Haydale said it was "disappointed" that group sales were now expected to be below market expectations due to the weak first half but added that it was confident that its annualised revenue position at year-end would demonstrate the "significant progress" being made.
Chief executive Keith Broadbent said: "Whilst the decision to close Haydale Taiwan, the later than expected commissioning of the blanks line and the slowdown in the aerospace sector in the US has affected our short-term revenues, the directors remain committed to delivering the commercial priorities that we have set the group."
As of 1200 GMT, Haydale shares had sunk 14.71% to 1.45p.