Last checked at 14 Oct 2016 07:00
14 October 2016
Carclo plc
("Carclo", the "Company" or the "Group")
Trading Update
The Board is pleased to announce that the Group has continued to trade well in the current financial year and its trading performance remains in line with the Board's expectations for the year ending 31 March 2017. The Group will announce its results for the half year ended 30 September 2016 on 15 November 2016.
Technical Plastics delivered a good first half performance with customer demand in line with the Board's expectations and growing net margins; the Board expects this division to have a stronger second half trading performance. In LED Technologies, our Wipac luxury and supercar lighting business has performed well, demonstrating good product demand and with all of its current design, development and tooling projects on plan; this division is expected to report another strong performance in the second half of the financial year. The Aerospace division has benefited from stable demand in the first half of the financial year and is expected to trade in line with the Board's expectations for the full year.
Approximately two thirds of Group revenue is currently derived from outside the UK and, therefore, movements in foreign exchange rates have an impact on our financial results. The Group had foreign exchange contracts in place prior to the EU Referendum and this has limited the net benefit from foreign exchange rates in the first half of the financial year. Assuming that sterling does not strengthen significantly, we do expect some further net benefit from the retranslation of overseas profits during the second half of the financial year.
Group debt was slightly higher as at 30 September 2016 than at 31 March 2016 primarily due to the impact of currency movements on the re-translation of the Group's US dollar and Euro denominated medium term loans. Group debt is expected to reduce by 31 March 2017.
As outlined in our trading statement of 31 August 2016, the Group's IAS 19 pension deficit is expected to have increased significantly due to the material decrease in the corporate bond yield used to discount the pension liability. However, the cash cost of the pension deficit has remained at similar levels with the Group paying in the current year an annual recovery plan payment of £1.2 million and pension scheme administration costs of £0.7 million. As expected, due to the materially increased IAS19 pension deficit extinguishing the Company's distributable reserves, the Group did not pay the recommended final dividend of 1.95 pence per share which was referred to in the results announcement made on 7 June 2016.
The Board continues to look forward to a year of strong trading and good growth in both of its main divisions.
Enquiries: | |
Carclo plc | 01924 268040 |
Chris Malley, Chief Executive | |
Robert Brooksbank, Finance Director | |
Weber Shandwick Financial | 020 7067 0700 |
Nick Oborne |
Notes to editors
Carclo plc is a public company whose shares are quoted on the London Stock Exchange.
Carclo's strategy is to develop and expand its key manufacturing assets where there remain significant further opportunities to drive value. To enhance profit margins and support customers the Group has been investing in lower cost regions and new technologies.
Approximately three fifths of Group revenues are derived from the supply of fine tolerance, injection moulded plastic components, mainly for medical products. The balance of revenue is derived mainly from the design and supply of specialised injection moulded LED based lighting systems to the low volume premium automotive industry.