Trading Update

Haydale, (AIM: HAYD), the global advanced materials group, announces a trading update for the year ending 30 June 2024 (the "Year").

The Group anticipates announcing revenues for the Year of £4.7m, behind current market expectations of £5.8m, but still showing growth on the prior year performance of £4.3m. Notwithstanding the reduction in turnover, Adjusted EBITDA is expected to only be marginally behind market expectations, at a £3.15m loss (currently a loss of £3.0m).

As reported in the half year interims, the building blocks to take the US silicon carbide business up the value chain and into tooling manufacture and sales have largely been completed, however orders at volume are taking longer than anticipated to crystallise. In addition, certain sales for Q4 have been impacted by a very short term US supply chain issue that will impact on the Company's SiC whisker production in June, reducing available stock.

As high value specialist commodity products, the sales cycle for tooling is relatively straightforward based on product performance and cost compared with the incumbent product with no obstacles to switching. Whilst Haydale is starting to see good progress with both late stage pipeline and client accounts increasing, the testing cycle is proving to be longer than anticipated. The Company is currently in testing with a number of major potential tooling customers that it anticipates will make a major difference to the business' performance in a relatively short timeframe with progressive improvement expected as they move forwards. Arrangements with our potential Asia based manufacturing and distribution partner, as referred to in the interims statement, have continued to progress positively and the Directors expect these to now close in H1 FY25. These significant opportunities support the anticipated major growth forecast for FY25, after taking account of the latent start. The Directors therefore anticipate forecast expectations for FY25 to still show major growth on FY24, albeit from the lower starting position.

Conversely, the nanomaterial operations centred in the UK have continued to strengthen with continuing growth in the demand for Haydale's functionalisation processes as the industry matures. The Company has seen a continuing stream of projects arising from its existing customer base with major new customers continuing to be added. The Company anticipates these paid for development projects will result in longer term repeat revenues.

The Directors expect the general commercial momentum from this Year to continue and accelerate next financial year reflecting building confidence in the medium and long-term prospects and the overall significant potential for the Group.