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Trading statements

Carclo on track despite weakness in technical plastics division

07 September 2017 08:09

Carclo's trading performance for the year ending 31 March 2018 remains in line with its forecasts, with an outperformance of the LED Technologies division expected to offset the weaker than previously anticipated performance of the technical plastics division, shareholders at today's annual general meeting will be told.

An update issued ahead of the meeting said: "Technical Plastics has had a challenging start to the financial year with some key new programmes delayed into the second half and some operational challenges, which have now been largely resolved.

"Performance is now much improved and we expect this division to have a considerably better second half of the year, in line with our prior plans for that period.

"The new factory build in India and the redevelopment of Mitcham are progressing according to plan and the Chinese business is benefitting from further systems validations with our main medical customer as well as very strong new business opportunities.

"LED Technologies is having an encouraging first half, performing ahead of our expectations, with its Wipac business seeing good product sales on its various supercar lighting programmes and strong design, development and tooling activity.

"New business activity has continued apace, and ahead of prior expectations.

"Progress on the mid-volume programmes and the factory expansion at Buckingham has continued to plan. Customer audits of our mid volume programmes have confirmed that we are well advanced with preparations for manufacturing and continuing to meet their high expectations.

"Integration of our recent Czech acquisition has been excellent and we are now starting to expand our technical teams in this location, which has already enhanced our ability to win more business.

"The Aerospace division is expected to have stronger sales in the second half of the financial year as some of our new programmes move to serial production.

"As anticipated, Group net debt will be higher at 30 September 2017 compared to 31 March 2017, primarily due to the timing of capital investment and an increase in working capital due to the investment and payment profile of ongoing design, development and tooling programmes.

"Group net debt is then expected to decrease by the year end.

"Given the above, the Board anticipates that the Group's usually stronger second half performance weighting will this year be more pronounced, driven by an outperformance at LED Technologies and an improved performance at Technical Plastics.

"The Board continues to expect the Group to deliver results for the year as a whole in line with its previous expectations and is confident that all divisions are well placed to make strong progress thereafter."

At 8:09am: (LON:CAR) Carclo PLC share price was -11.25p at 144p

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Related Company: CAR

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