(Alliance News) - Carclo PLC on Wednesday said a major global original equipment manufacturer has cancelled its 10-year contract with the company.
The West Yorkshire-based plastic parts manufacturer said that whilst the tooling contracts have been substantially delivered, the customer no longer intends to proceed into the production phase of the project.
Carclo added that it is in discussion with the customer regarding an appropriate commercial settlement, and the board is evaluating the financial impact and is taking mitigating actions.
Carclo shares were down 12% to 12.50 pence on Wednesday morning in London.
In December 2020, Carclo announced the receipt of a 10-year framework agreement from the unnamed company. The contract allowed the award of production contracts to its Carclo Technical Plastics division for the manufacture of a range of medical diagnostic disposable devices.
The components were used in Carclo's laboratory-based polymerase chain reaction diagnostic systems.
Carclo said the contract was expected to deliver annual incremental sales of between GBP10 million and GBP15 million at full production rates, for the life of the contract. Carclo expected that production volumes would start building from the last quarter of the current financial year.
By Jaskeet Briah, Alliance News reporter
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Carclo (CAR)