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The information is just factual and presented that way, no mention of any issues with China (as previously speculated), given the current global conditions, I would say Carclo are doing a good job of 'holding their own'.
I particularly like the 23% increase in revenue (bodes well for the future) and the "Total equity attributable to the equity holders of the company" of nearly 30 million when the current market capitalisation is only 11.6 million.
Is Nick still writing the RNSs?
China looking shaky !
… I’ve thought the same myself Warren but it’s hard to say. We are going to find how things are going next Wednesday when Carclo release their figures.
What impact do we think the lockdowns will have on results .
Robert Stutzman, Divisional Chief Executive, left in August after some 20 years at Carclo.
Maybe he was expecting to get the top job when Frank Doorenbosch got it!
Something has happened for sure.
Lets hope we can now get on and sort out these supply chain and inflationary issues, I do believe both Nick and Phil have been way behind the curve on this.
A new dawn with the changing of the guard? Or another false dawn.
I remember looking up Nicks CV on companies house website and being underwhelmed. I guess we will know their true legacy on 30th November. But with them both going so quickly together, I and not counting my chickens.
A new CEO appointed in 6th October who has had zero to say about his appointment, reason for change, what he will bring to the role or the strategic direction of the business and how he will deliver for shareholders.
SP continues to erode. I find the communication approach extremely poor.
Is that right, not a single share traded today?
(Contd):
'to achieve the best results'.
In other words the pension trustees will always work with the company on a long term plan of contribution repair that is fair and appropriate to both sides and more importantly allows the company to grow and prosper because that in turn secures the company's pension contributions.
The profits of the company have nothing to do with the total annual pension pay out as this comes from the (legally separate) pension fund. The pension fund will naturally rise and fall in value (all pension funds do) depending on investment strategy and market conditions but as long as it has a sizeable base (in this case nearly £156 million @ March 22) then it will cope with these rises and falls as it will have done in the past.
What also needs to be appreciated is that the assumptions made by the actuary on valuation are very cautious and therefore whilst the pension fund as it stands may be sufficient (in the real world) to meet its liabilities both now and in the future the actuarial valuation will always portray a 'worst case' scenario.
Going forward, one of the options available to the trustees (which has proven very popular over recent years) is to gradually secure like for like annuities with an insurance company (for an appropriate premium of course) which will proportionately reduce the liability on the scheme and therefore reduce the disparity between the 'real life' liability and the actuarial valuation liability.
As usual in these circumstances a combination of reasons:
General market conditions are far from ideal at the moment, I see the current situation/share price as similar to March 20 at the onset of covid when the share price fell to roughly 5p and subsequently reached a 14 x high of 70p in May 21. The big difference is that Carclo are in a far better and stronger position than they were in March 20 and judging by the information we do get, are growing and expanding.
Individual share prices 'ebb and flow' (especially when there is a lack of any real news). It's been said many times before that communication to shareholders and the market isn't one of the Carclo's strong points and whilst I agree that the turnaround of the company had to take precedence, now that this has been achieved and it is on an upward trajectory, it would be greatly helpful (and also nice to know) if the company could share some of this positive news with us. I think one of the problems is that Carclo is a well established company that'll be celabrating its centenary in 2 years and past tradition (imo) seems to dictate a modest and even cautious approach to rns communications.
Shareholders in particular and the market in general start to lose interest (because of the lack of real news) and consequently the share price starts to drift, this triggers shareholder's 'stop loss positions' which then compounds the situation making it worse.
Other commentators who post on sites like this and advfn regarding the pension situation who either don't have the full facts or haven't done sufficient research before posting and therefore paint an unnecessarily negative picture of the real situation.
The following information is taken from 2022 annual report:
Carclo’s UK defined benefit pension scheme, having long since CLOSED to new entrants, is mature and large compared with the size of Carclo. The scheme is backed by substantial assets amounting to £155.8 million at 31 March 2022.
(In line with similar UK companies, new employees, post closure, have been offered membership of a defined contribution scheme).
Outside of the UK, retirement benefits are determined according to local practice and funded accordingly.
(These arrangements carry no risk to the company).
In the UK, Carclo plc sponsors the Carclo Group Pension Scheme, which provides defined benefits (whilst these will be inflation proofed via RPI/CPI, this will be capped at probably between 3% & 5% - so the fact that inflation is around 10% atm is irrelevant). This is a legally separate, trustee-administered fund holding the Scheme’s assets to meet long-term pension liabilities for some 2,662 current and past employees as at 31 March 2022.
What has to be appreciated is the 2,662 figure can only decrease over time thereby reducing the liability and that this is a long term arrangement that requires the mutual co-operation of the pension trustees and the company in order to achieve the best resu
A serious question, because I just don’t understand……….
Why is this company valued so cheaply? The price of the shares just keeps falling when there is no real news.
£6 million profit for a company valued at £12 million would not be a bad result !
I wonder if the recent sp weakness and the change of group CEO has anything to do with Carclo Technical Plastics qppointment of a new CFO September 22nd 2022.
I think. "4 The Carclo pension fund paid out £9 million in pensions in a year when Carclo only made £3 million top-ups to the fund." fails on at least two points. If as you say it is not a closed fund I would expect standard payments by Carclo into the fund which would be included in the wages bill as well as the top-ups? Also what about investment income and capital appreciation? I appreciate the capital value may be down.
??? Well of course the fund/assets will be used to pay the pensioners each year. What else do you think it is there for? The assets will fall each year due to the pension payout, and the corresponding liability will also fall.
There are several concerns re the pension liabilities of Carclo.
1 LDIs have been used by some pension funds but which pose existential risks for them at the moment. In some cases pension funds have run leveraged exposure to interest rates. There could be massive losses if they close out these outsize risks by Friday as recommended by the Bank of England governor - or even more if they do not.
2 Carclo still run defined benefit pension schemes when most private sector companies switched them to defined contribution funds decades ago. These funds pose risks to companies like Carclo.
3 Carclo refers to some pension liabilities which are inflation adjusted. This means that pension liabilities could be up by 10 percent in the last year just because of these adjustments.
4 The Carclo pension fund paid out £9 million in pensions in a year when Carclo only made £3 million top-ups to the fund. The fund would therefore be £6 million short even if the pension fund had not lost money due to LDI risks or declining investment values - or if the fund liabilities had not increased due to UK inflation.
AIUI the question is has Carclo's pension trustees used LDI's to hedge their position? (LDI is best described as a fancy name for a structured set of derivatives exposed to the price of gilts.). If yes it will adversely affect the pension deficit. We may have to wait until the next triennial review to find out and may not even then, the Trustees have no obligation to make details of their investment strategy public.
Steelwatch, if you go on ADVFN there is loads of pension type debate taking place and some of the guys seem to be from an accountancy background - far more ‘in the know’ than myself!
Does anyone have a view if these Gov proposals will place an additional obligation on Carclo's future pension reduction payments?
https://www.telegraph.co.uk/business/2022/10/09/pension-crackdown-risks-sparking-wave-bankruptcies/
A surprise for sure. I felt comfortable with Nick at the helm.
Having said that good luck to him in whatever he does beyond Carclo.
It certainly looks like Frank was brought in with this in mind. He has been out and about meeting customers and staff for the past months. I doubt he would have taken over if he felt it was a poison chalice. And it's great that the transition is orderly and that Nick will be around for a while. Jmo
Sorry Chrisjse.
"Carclo Technical Plastics India General Manager Premchand Pandurangan collects award from FKCCI and Karnataka State Govt officials at ceremony in Bangalore, Sept 2022."
There is also photo of managers collecting the award.
frankseluk2: Only you can view that link as it is on your computer.
content://com.android.chrome.FileProvider/images/screenshot/16647401228292035464050.jpg
The last time the price was this low was in Jan 2021. You have to be sanguine though given all the strife at the moment. However, if the company can raise their prices in response to inflation then I it may not be so much of a problem. They are very much in a better position than in Jan/22.
Worry about £ interest rates could be offset by overseas earnings (8 out of the 11 factory locations are abroad).
I am actively buying again at these prices (to add to my very overweight holding). The sp may nudge down a bit further but the bad times won't last forever and we all need medical plastics in some form or another. Patient to wait til 2023 and a bit beyond.