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retest 30p?
EV/EBIT is hardly rock bottom; plent of headwinds/risks imv
I note that the 2022, 2023 earings forecasts have been revised slightly. 2022 is showing an eps of 4.4p and 2023 is showing an eps 5.5p. This is a slight revision downwards as 2023 was showing 5.86p previously but the trend is still positive, with forecast revenues increasing to £129M.
Figures taken from Stockopedia (which I assume use the house brokers forecasts).
Regards.
2022 hopefully will be another year of progress for Carclo.
Sales should be quite a bit ahead of last year, baring any Covid disruption. We were informed, Nov investor presentation, that the framework agreement signed Dec 20 is up and running in the UK and will be very shortly in the US.
That alone could be adding (depending on timing) over 1million a month, certainly, before the end of this financial year.
As Norfolk said, lets hope we can buy a few more in the 30's before the update!
In the past we have been provided with a trading update any time from end of Dec to early Feb.
Hopefully the new management will give the market some trading guidance in the next couple of weeks, similar to the useful summer update.
I guess we will have to wait til April and the full year results to see what the Covid bonus looks like.
Assuming there is a Covid bonus, it certainly seems to be going under the radar of a lot of people.
Although I am showing a moderate gain on my holding, I am happy to wait and see what April brings, so I believe in it.
Frankseluk and Steelwatch: Thanks for your detailed posts following my comments.
I was not aware of the framework agreement. www.investegate.co.uk/carclo-plc/rns/framework-agreement/202012230700025961J/ This did indeed mention the time frame and sums Steelwatch quoted. This contract should start to impact the results next year.
Nice summary franksel thankyou,
Would just add a couple of minor points:
1. I understood the framework agreement was slightly higher with a potential value of £10 - 15m pa over the 10 yr period.
2. With the 3 manufacturing sites in the usa and with their previously stated involvement in diagnostic testing components over there, I would hope they are currently in a rich seam of work, given the news re testing in the USA and their preferance for domestic made products.
3. The recent capacity expansion progress at Mitcham (uk), USA, Europe & India (+all working 24/7) + managements bullish statements regarding beating expectations this year, both short & long term prospects are looking good.
Hi Mstar,
Re- your concern:
Carco technical plastics has been around since about 1997. Carclo the company since 1924.
If you log onto Carclo Plc and click ‘our markets’ you will get a better understanding of the business. Also look at the recent accounts, presentations and annual report. The company defined benefit scheme was closed to new members some years ago.
The company recently entered into a 10 year framework agreement worth circa 10million over that period. The contract involves Carclo in the 1st instance, designing the product and creating the tooling for mass production. Tooling, I believe accounted for less than 14% of CTP revenue in the previous year. The company also manufactures Electronics/Consumer, Optics and Aero cables. I think your concern re profit, scale and LFTs are misplaced.
You point regarding the Pension deficit and borrowings are more valid in my opinion, though I think the company are taking great steps to sort this out. Certainly, the pension deficit and borrowings are being reduced considerably with cash to the pension and also to the bank. (The company generated over £7m cash. £1.8m pension, £3.3 working cap, cash £2m). The market generally should help as far as the pension is concerned together with the new initiatives regarding existing members taking benefits, also a reduction in life expectancy has taken place over that past couple of years. All this will become more visible in the coming year. A scenario where I believe the pension and debt will not impact the company would be if we were acquired by another company. A simple calculation (guess) of EBITDA x 20 minus Pension deficit and debt gives a share price circa £1.00.
I think the directors are doing a great job and I look forward to the day they can start paying dividends again. At the same time my fall-back position is that we could be acquired by a larger company.
All in my opinion only.
From the financial statements i infer most of the business is equipment for manufacturing LFTs. Beza says the factories are operating round the clock. Right now there is a shortage of LFTs. So Carclo should be raking in the sales. My concern is that they may still not be generating sufficient profit for a business sector which will probably not continue at this scale indefinitely. And the H1 profits are massively exceeded by the borrowings and the pension deficits. Does anyone know if they are still providing defined benefit pensions, the error which got them into trouble with pensions?
I've finished work for the rest of the year & thought I'd review 2021 for Carclo (as I hold nearly half a percent of the company since buying at 5-18p). It has been a great year so far (up +100% in 2021) and the prospects for 2022/2023 look good, tech plastics being a growth market. Directors have put their money where their mouths are and they appear to be working flat out.
The current price is still cheap although in the short term I am hoping for a quick dip to 35p-ish before pledging my wife's savings in (she works as a nhs covid tester and reports that pcr testing is going through the roof as omicron continues, so short term market optimism may get a short hit).
In summary, I still don't think you can lose money here (even if a factory temporarily closes as it did for Itaconix recently). Maybe a takeover target in 2022 but I think sharp share price growth will be in 2023 with possible resumption of dividends. If you can wait for a year or two then the returns could be x3, x4 or x5 with a very low risk attached. Merry Christmas!
Great news this morning that Avacta via meduflow (Medusa 19) have received aproval to sell direct for home use.
Carclo's previously discussed links with Avacta may help to explain yesterdays price rise.
EU & UK markets now open ( +Joe Biden's 500 m adding to the demand) hopefully we will be running the newly installed unit at Mitcham 24/7 for this one (+ others).
Anyway GLA
https://www.londonstockexchange.com/news-article/AVCT/affidx-receives-ce-mark-for-consumer-self-testing/15260813
Presedent Biden has ordered 500 million at home rapid covid tested. Let's assume these are lateral flow tests.
The population of the USA is circa 333 million.
How many tests have you taken this last month. How many will you take before meeting up with the family this Christmas weekend.
500 million to cover the USA will do the USA for a while...does any other country use them? Imo? One thing is for sure CARCLO ( alongside others )make them....
Taken from latest results Beza.
At 20times share over £1.00
Half yr to 30th Sept 21 Underlying EBITDA from continuing operations(1)
£6,863,000
That’s interesting to hear Frank. What figure do you have pencilled in for Carclo’s EBITDA?
Hi Beza, it sure would be nice if we were in a new year tip sheet.
I have a pal who's business is a (very) mini Hanson Trust. He tells me they pay between 15 and 20 times ebitda for a target company and considerably more in certain circumstances depending on the company. When talking to him I didn't mention CARCLO. The companies they are interested in are private (not quoted) and generally not international. Based on what he said I believe a multiple way over 20 would be used in a business similiar to CARCLO. :-)
Quite possibly. I work shifts, mornings and night shifts and the rota continues all year round regardless of Bank Holidays, that’s why we get shift pay. Some companies pay an overtime rate too. I was wondering if Carclo would make any New Years tip sheets..?
I wonder if the production lines will be working Christmas day?
Demand must be through the roof....
For those like myself who have wondered about these single digit trades, take a look at Royal Mail or Darktrace share buy backs today. There are quite a few.
Excellent news.
Mesquida.
I had thought the 125k you mentioned on ADVFN was a delayed buy Mesquida.
Hopefully Schroders are not on their own.
… yes, we’ll spotted Frank and this kind of news shouldn’t do the share price any harm either.
Looks like you were right in thinking that there was professional interest, Frank, fund manager Schrroders has just announced an increase in their holding.
On the basis the price has risen both yesterday and today and considering the spread at the time and trades either side, looks like we may have a bit of professional interest following the presentation.
RNS - good to see the CFO buying £10k of shares at 41p, to follow his earlier £10k bought at 51.8p:
Https://uk.advfn.com/stock-market/london/carclo-CAR/share-news/Carclo-plc-Director-PDMR-Shareholding/86652955
The CFO is usually the most cautious and lowest-earning exec. director, so it's always noteworthy when this happens.