(Alliance News) - Carclo PLC said Tuesday its performance in the first weeks of its current financial year has been "broadly as anticipated".
Carclo said its Technical Plastics and Aerospace divisions "performed strongly" but saw increased operating losses at Wipac, the firm's main operating business in its LED Technologies division.
The technical plastics supplier said Wipac is continuing to incur additional costs to meet growing customer demand.
"In light of the ongoing challenges, and in order to establish a more sustainable platform for Wipac, the board is reviewing the strategy for the business, in particular the move into the mid-volume vehicle market, which is placing significant strain on the group," the company said.
As part of this review, Wipac will refocus its operations from the "historic low-volume" vehicle markets, where the division had previously been "financially successful".
"This plan might involve customers moving some programmes to alternative suppliers. Once implemented, the revised strategy is likely to have the effect of reducing Wipac's future sales revenue but would also, consequently, significantly reduce the Group's cash requirements for working capital and capital expenditure," Carclo added.
Carclo is expected to release its annual results for the 12 months ended March 31 on July 23.
Shares in Carclo were down 9.9% Tuesday at 19.83 pence each.
Carclo (CAR)