Last checked at 18 Oct 2022 07:00
18 October 2022
Carclo plc
("Carclo" or the "Group")
Trading Update
Carclo, a global manufacturer, principally of fine tolerance injection moulded plastic parts and aerospace components, publishes the following trading update for the first six months of its financial year ending 31 March 2023 ("FY23").
Demand has remained strong in our chosen sectors and, as a result, Group sales were marginally ahead of the Board's expectations and ahead of the prior year.
The Life Sciences sector within CTP, comprising Medical and Diagnostic customers, continued to deliver good revenue growth, despite delays in the ramp-up of volumes on two new product lines. The benefit of this revenue growth was offset by a decrease in margins, driven by a combination of costs associated with the introduction of new products and, as predicted, inflationary and supply chain cost pressures. These cost pressures are being offset by price increases wherever possible. The management team has been further strengthened to focus on improving operational efficiency.
The Aerospace sector traded strongly in the first half with continued high order intake and significant sales growth. Inflationary pressures have been effectively mitigated and as a result margins have been maintained at prior-year levels.
As a result, underlying Operating Profit for the Group is in line with the Board's expectation and marginally below the prior year, supported by favourable exchange rate movements, particularly the movement of sterling against the US dollar.
An extension of the Group's financing agreements was also completed in the first half with bank facilities committed out to June 2025. Net debt increased in the half year largely driven by higher working capital and investment in capital equipment to support future growth. The Group pension scheme IAS 19 accounting deficit has reduced slightly since March 2022, with both asset and liability values reducing significantly during recent high volatility in equity and bond markets.
The inflation and supply chain challenges experienced in the first half are expected to continue through the remainder of the financial year. Our initiatives to further enhance operational efficiency and to offset inflationary price increases are key focus areas for the second half. Increases in borrowing costs are expected in the second half driven by increases in both the level of debt and interest rates.
Carclo plans to announce its interim results for the six months to 30 September 2022 in November 2022.
About Carclo plc
Carclo plc is a public company whose shares are quoted on the Main Market of the London Stock Exchange. The Group is a global provider of value-adding engineered solutions for the medical, optical and aerospace industries.
LEI: 21380078MEM399JPI956
Enquiries:
Carclo plc | 01924 268040 |
Frank Doorenbosch | CEO |
Phil White | CFO |
FTI Consulting | 020 3727 1340 |
Nick Hasell / Susanne Yule |