Carclo plc Trading Update and Board Changes (8072B)
January 15 2018 - 2:00AM
UK Regulatory
TIDMCAR
RNS Number : 8072B
Carclo plc
15 January 2018
15 January 2018
Carclo plc
Trading Update and Board Changes
Carclo plc ("Carclo" or the "Group"), the global manufacturing
group, announces a trading update for the year ending 31 March
2018.
Trading update
The stronger second half performance across the Group,
anticipated at the time of the Interim Results in November last
year, is not now expected to be achieved. Accordingly, the Board
now expects the Group's performance for the current financial year
to be significantly lower than previously planned.
While the previously reported operational issues at Technical
Plastics have been addressed, there has been an unexpected delay in
the awarding of two large tooling and automation contracts. In
addition, a large and long standing non-medical customer which had
been indicating a strong second half for our moulded components has
not yet increased its orders. The impact of these factors is such
that the division's profit for the current year is now expected to
be significantly below expectations.
Within LED Technologies, the Group's LED super car lighting
business has performed as anticipated and new product launches have
continued to be made on time. However, while the Wipac business has
continued to operate well, delays in the award of three new
contracts are expected to materially reduce the division's profit
for the current year. It is still anticipated that Wipac will be
successful in winning a number of these programmes despite the
uncertainty on timing.
The Board expects the Group's profits for the year ending 31st
March 2018 to be significantly lower than its previous
expectations. In addition, as a consequence of some of these
delayed projects and lower customer orders, the Board has now
reduced its profit expectations for the 2018/19 financial year
albeit these revised expectations will still represent healthy year
on year growth.
The Board recognises there is an ongoing reliance upon winning
new tooling and automation contracts to drive profitability in
Technical Plastics. However it is also cognisant that such reliance
must be offset by higher and more sustainable underlying operating
margins from existing business and therefore targeting improved
margins has been an ongoing initiative. In view of the
disappointing reduction in anticipated profitability for the
current year, a more fundamental and urgent review of operating
efficiencies and margins at this division is to be undertaken.
The Group's financing remains healthy and it continues to
operate well within its banking covenants.
While this is a setback, the Board believes that the medium term
outlook for the Group remains positive. The LED Technologies
business is still expected to grow significantly, moving forwards
as the previously awarded mid-volume programmes commence production
from 2019, and the new medical programmes won in Technical Plastics
are expected to underpin good growth in this division.
Board changes
The Board announces today that, after 14 years as Group Finance
Director, Robert Brooksbank is leaving the Group on 31 March 2018
to pursue other career and business opportunities. The Board would
like to thank Robert for his significant contribution to Carclo
over this period and wish him well in the future. The Board is
initiating the process to recruit a new finance director and in the
meantime Richard Ottaway, Group Financial Controller and Company
Secretary, will act as the Interim Chief Financial Officer from 1
April 2018 until a permanent successor is appointed.
In addition, the Board announces that Michael Derbyshire will
retire from the Board at the Group's Annual General Meeting in July
2018 after nearly six years as Chairman and over 12 years as a
Non-Executive Director. Michael has made a substantial contribution
to the strategic direction of the Company and the Board thanks him
and wishes him well for the future.
Mark Rollins, who joined the Board as Non-Executive Director on
1 January 2018, will become Chairman at the conclusion of the
Annual General Meeting.
Enquiries:
Carclo plc 01924 268040
Chris Malley, Chief Executive
Weber Shandwick Financial 020 7067 0700
Nick Oborne
Tom Jenkins
Notes to editors
Carclo plc is a public company whose shares are quoted on the
Main Market of the London Stock Exchange.
Carclo's strategy is to develop and expand its key manufacturing
assets in markets where there remain significant further
opportunities to drive shareholder value. To enhance profit margins
and support its customers, the group has been investing across its
global footprint.
Approximately three fifths of Group revenues are generated from
the supply of fine tolerance, injection moulded plastic components,
mainly for medical products. The balance of Group revenue is
derived mainly from the design and supply of specialised injection
moulded LED based lighting systems to the premium automotive
industry.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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