TIDMCAR

RNS Number : 4776I

Carclo plc

31 August 2016

31 August 2016

Carclo plc

("Carclo" or the "Group")

Update on trading and dividend

The Board is pleased to announce that the Group has continued to trade well in the current financial year and the trading performance remains in line with its expectations for the year ending 31 March 2017.

Technical Plastics has had a very good start to the financial year with demand from our healthcare customers as expected. Following the award of additional production volume from a long term Group customer, we have approved the expansion of our existing Indian facility and expect this expansion to be completed by late summer of 2017. Our strategies to win new programmes to fill the expanded capacity at our new China facility are gaining traction, with some initial programme wins secured in the first half of the year.

In LED Technologies, our Wipac luxury and supercar lighting business has performed well with good product demand and all of the current design, development and tooling programmes are progressing as planned. Wipac's new business wins and order pipeline have been consistent with our targets. In addition, our Optics business has seen strong demand in the first half of the financial year.

The Aerospace division has seen stable demand so far this year and is expected to trade in line with our expectations.

We expect Group debt to be a little higher at 30 September 2016 than at 31 March 2016, primarily due to the impact of weaker Sterling on the re-translation of our US dollar and Euro denominated medium term loans. However, the Group has made modest gains on trading and on the retranslation of overseas profits year on year due to the weakness of Sterling.

Subsequent to the EU Referendum result on 23 June 2016, corporate bond yields have decreased materially in the UK and, as this yield is used to discount the Group's pension liability under IAS 19 "Employee Benefits", if the corporate bond yield remains at its current low level then this will result in a significant increase in the Group's pension deficit as at 30 September 2016. This likely increased IAS 19 pension deficit would have the effect of extinguishing the Company's available distributable reserves, in which case the Company will not be able to pay the final dividend of 1.95 pence per share, declared on 7 June 2016, on 7 October 2016 to those members that were on the register at 26 August 2016. Whilst the Board is disappointed that the final dividend is now unlikely to be capable of being paid due to these legal and accounting constraints, it intends to resume the Company's progressive dividend policy once legal and accounting circumstances allow.

The Board looks forward to a continuing positive trading performance this financial year and to delivering good growth in line with its expectations.

- ENDS -

Enquiries:

 
 Carclo plc                   01924 268040 
 Chris Malley, Chief 
  Executive 
 Robert Brooksbank, 
  Finance Director 
 
 Peel Hunt LLP               0207 418 8900 
 Justin Jones 
 Jock Maxwell Macdonald 
 Mike Bell 
  Weber Shandwick 
   Nick Oborne 
   Tom Jenkins               020 7067 0000

The information contained within this announcement is deemed by the Company to constitute inside information stipulated under the Market Abuse Regulation (EU) No. 596/2014. Upon the publication of this announcement via the Regulatory Information Service, this inside information is now considered to be in the public domain.

Note 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.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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August 31, 2016 02:01 ET (06:01 GMT)

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