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Amazed at the negative reaction to the results but have taken advantage by topping up my investment.
This is a world class company engaged largely creating products for medical use .
I am curious about the diagnostic products in china , 1.6 billion people !
Chrissie
You will find that info on the companies website. Comparing the balance sheet with the company then and now is not like for like. CARCLO is now a totally different company. With totally different management.
On another point it's interesting that each day this week delayed trades , which if you check times and spreads at the time they look very much like buys. Tuesday 200k, Wednesday 100k, Thursday 2 x 200k and today 350k. All published after trading closed. Someone is definitely mopping up the sells.
I know "the Group is not permitted to make a dividend payment to shareholders up to the period ending in July 2023." Thinking long term what was the last dividend and what was the profit and balance sheet like at the time? I'd like to have something to look forward to even if it is more than a year away.
Good summary, frank.. I’m keeping the faith and adding more. I guess management cannot add until after the End March 2022 results are released in early summer. Last year they purchased the very next day! ATB
The revenue growth, in line profits and margin pressure were all flagged in the half way report.
The considerable strengthening of the balance sheet despite the increase in net
debt Is brilliant and gives us a clue to the reduction in the pension deficit.
The Framework contract "extended prove out" (delay) was mentioned when I asked how it was progressing at the last “investor meet the company” presentation. To be honest I was a little disappointed when I read it but that should be all ok now considering the UK side of it is in production.
The new global contract with an existing customer is a huge positive in my opinion. As is the 17 new (additional) product lines the 5 new significant accounts in the Czech Republic, USA, India and China.
Order intake in the Aero division improved significantly during the second half and especially in the final quarter. And looks like continuing as the business is being developed further.
Finally demand remains strong despite the headwinds in China and India and the problems from the war which most if not all companies are feeling.
A good update imo. Pity the share price doesn't reflect it.
No weak stocks for me. I may buy back in, once this starts to rise on better sentiment. This is the 3rd stock (which I feel is a good business) that I have dumped in the last 4 weeks.
I did take another look at Carclo for hints or clues to be excited about: Twitter account last used 2017: https://twitter.com/Carclo_plc. Website, has no current info on it, looks like it hasn't been updated since pre-Wipac. No news feed of what is happening at the company etc - cant even see the locations of the manufacturing sites. Coupled with the trading update, I concluded that they are not going to be doing any PR soon, to help the share price. No accessible broker for the retail investor, Trading update says in line with expectations for profit - what is this? Looked at the previous interims, and no guidance was given, other than 'expectations'. In this environment of ordinary stocks selling off, those that are raising their profile and engaging will fair better. Next stop might be sub 20p here, at which point, I might re-enter, but I dont see a catalyst for upward trajectory, not even from results.
I have been putting all my money in cash generating resources, all trending upwards inline with their commodity prices, which is what is partly hurting these 'good businesses'. Strong stocks such as: I3E,JSE,SQZ,BEN,IOF.
The headlines from Carclo’s statement were good, positives signs going forward but the shares are down, (admittedly during a lousy market) why is this? I’m guessing that the statement of increasing the debt probably didn’t go down too well despite the fact that this money is being used to buy further equipment to meet the latest demand.
Secondly, the board gave a very positive speech but they didn’t provide any numbers for the market to digest.
Might be next week before there is any reaction. Reads well though.
Carclo was the subject of a bid a couple of years ago at a price around 115p. It is now a more streamlined business, and if they can demonstrate resolution of the pension issue, then I see little reason why interested parties will not look again. There has been no material dilution over the last 10 years, so that 115p remains a relevant target.
The update sounds positive - however, it is completely lacking any numbers which is very disappointing. I think the update will be enough to stop the downward movement, but I do not see a sharp rise here until nearer the results. I scanned back to the previous years TU, and although it was similar without most major figures, it did include a bit more financial information. Following on from Rivaldo's comment, no broker info, no figures in the TU, I cant understand the rational behind that approach, especially given the share price performance. I must say, Today I am disappointed with the update, due to it being vague and unhelpful, it has left me wondering why the BOD would do this. I will continue to hold.
As good as can have been expected given the general market conditions.
The core CTP business is going great guns, with lots of new production contracts being implemented, additional new tooling contracts and continued global growth prospects. Aerospace is getting back into growth mode too and remains profitable.
So revenues are ahead of expectations and the pension deficit is reduced. And CAR have managed to keep profitability in line with expectations despite all the cost increases.
The outlook is similarly mixed, with strong demand and further revenue growth set against margin pressures.
I wish CAR would actually publish what those market expectations are - none of its brokers are on Research Tree so all retail investors are in the dark, which is ridiculous in 2022.
The MMs have marked down initially due to the "challenging" early FY23 outlook comment, but longer term holders should imo be happy to hold as I suspect a £19.9m m/cap is very good value indeed for a specialist business in growth mode with over £120m turnover and substantial PAT.
Wow indeed Warren,
Yes the company faces the same issues as others, Covid in Asia, War in Europe , supply and inflation issues the world over.
Net debt increased and likely to increase further with planned expansion. The company is winning orders and large ones at that.
And the pension deficit has plummeted with the companies balance sheet a lot stronger.
I would like to write further but have a train to catch.....the often talked about 're rating is now certainly on the cards. Jmo
Why didn’t I load up yesterday, this is an incredible turnaround story , going to open 50% up .
Bad news is best handled by staying ahead of it — I think it would now be damaging if the update was bad news due to the radio silence — which I am sure they would know so hoping this is not the case
Something grim coming
Looking at the spread... there must be something from coming,?
I hope it is tomorrow, I cant take much more of this. If not then, I guess after the bank holiday.
I'm guessing the recent selling is probably a prior warning not to get too excited....
Should hopefully get a trading update soon ?
True , fingers crossed your right !!
On the other hand Warren.
No announcement of disruption in China due to the recent Covid outbreak is reassuring indeed.
Big concerns with this company is the potential disruption, no announcement reassuring us their operations in China are not affected!!!!!
The company mentioned in last year’s presentation to shareholders that they had enough funds for the moment and that selling the aero division was not something they were considering.
It would be great if the pension situation improved (bond yields, members transferring out, mortality figures etc. etc.) enough to warrant the trustees removing the restrictions on dividends early. Even a very token dividend would transform the share.
I don’t think a share buyback, for all purposes like a dividend, returning money to shareholders, is something the company would do. We need a bigger float rather than a smaller one. Some institutions won't invest in a company with so few shares on offer.
JMO
Hi, I agree with your sentiment, though these last few weeks are a tough hold. I have a few 'good' uk companies like this and they have all sold off and not picked back up again. So it may be that results are good, but we have to wait to see the upside. I hope they can reduce debt and the pension deficit. I have said before, perhaps sell the aerospace division to reduce debt and focus on growing the plastics. GLA.
Just pulled this out of the report to clarify:
Under the terms of its financing agreements the Company is not permitted to make a dividend payment to shareholders up to the period ending in July 2023.
Hello from across the pond, I went to sleep on this stock after the CEO and CFO bought last year. IMO this is an undervalued company and I won’t be a bit surprised if it gets bought out. The 10 year bond corporate bond should be rising and that will greatly help the pension liability from my understanding. A low PE like Carclo’s with growing earnings and cash flow with rising inflation make it an even better buy at this price. Instead of a dividend it would be better in my IMO to plough money back into the business or buy back some shares of stock. The company may not be able to buy back shares though under the terms of the pension agreement. Hopefully we will see some more insider buying.
Seems very sloppy Zhozho.
Hopefully our board have made this point direct to Pewl Hunt.