Carclo plc Wipac Strategy Update (7458B)
June 11 2019 - 2:00AM
UK Regulatory
TIDMCAR
RNS Number : 7458B
Carclo plc
11 June 2019
11 June 2019
Carclo plc ("Carclo" or the "Group")
Wipac Strategy Update
Carclo plc ("Carclo" or the "Group"), a global manufacturer of
fine tolerance injection moulded plastic parts mainly for the
medical, automotive lighting and optics markets, issues this
strategy update ahead of the Group announcing its results, for the
year-ended 31 March 2019, on 23 July.
Overall, Group performance in the first weeks of the current
financial year, and Group net debt levels, have been broadly as
anticipated. The Technical Plastics and Aerospace Divisions
performed strongly but operating losses at Wipac, the main
operating business in the Group's LED Technologies Division, have
increased, with the business continuing to incur additional costs
to meet growing customer demand.
In light of the ongoing challenges, and in order to establish a
more sustainable platform for Wipac, the Board is reviewing the
strategy for the business, in particular the move into the
mid-volume vehicle market, which is placing significant strain on
the Group. As part of this review, Wipac is working with its
customers to develop a plan to refocus the operation on its
historic low-volume vehicle markets where it had previously been
financially successful. This plan might involve customers moving
some programmes to alternative suppliers. Once implemented, the
revised strategy is likely to have the effect of reducing Wipac's
future sales revenue but would also, consequently, significantly
reduce the Group's cash requirements for working capital and
capital expenditure. The Board expects to be able to provide more
detailed guidance on the financial implications of the revised
strategy at the time of the full-year results announcement.
In the meantime, and as previously announced, discussions remain
on going with the bank and other stakeholders in relation to the
refinancing of the Group's borrowing facilities due to mature in
March 2020. An interim Chief Restructuring Officer has been
appointed to assist with these discussions.
Certain information contained in this announcement would have
constituted inside information (as defined by Article 7 of
Regulation (EU) No 596/2014) ("MAR") prior to its release as part
of this announcement and is disclosed in accordance with the
Company's obligations under Article 17 of those Regulations.
Enquiries:
Carclo plc 01924 268040
Mark Rollins - Executive Chairman
Sarah Matthews De-Mers - Finance Director
FTI Consulting 020 3727 1340
Nick Hasell / Susanne Yule
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END
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