TIDMCAR
RNS Number : 6461W
Carclo plc
27 April 2021
27 April 2021
Carclo plc
("Carclo" or the "Group")
Full Year Trading Update
Carclo, a global manufacturer, principally of fine tolerance
injection moulded plastic parts, today provide an update on trading
for the financial year ended 31 March 2021 ("FY 2021").
The Board is pleased to report that, despite experiencing one of
the most challenging years in its history, the Group has performed
solidly in FY 2021 and exits the year with stable foundations and
building momentum, in which we expect to have maintained CTP
division total revenue to broadly similar levels to last year,
reduced Group net debt excluding lease liabilities, and delivered
an overall Group post-tax profit.
The response from our workforce has been outstanding throughout
the pandemic and the Board wishes to record its thanks for the
support, resilience, commitment and resourcefulness shown by our
employees at a time of such unprecedented challenge.
As for many businesses the COVID-19 pandemic has presented
significant challenges and we are mindful of the risks posed by
further outbreaks as well as ongoing disruption to global supply
chains. Against this backdrop, the CTP division has delivered a
very resilient performance, with slightly lower annualised product
sales partially offset by strong tooling revenue year on year
(tooling revenues are generally a precursor to new product sales).
Alongside this, the Group took swift and decisive action to reduce
its cost base and utilise regional government support schemes,
where appropriate, to mitigate a substantial amount of the margin
pressure on the Group arising from the pandemic.
The first half of the year was significantly affected by the
impact of the pandemic as well as the Board's focus on stabilising
the Group following the exit from the LED Lighting division. The
signing of the Tripartite Agreement with our principal bank and
trustees of the Group pension fund in August 2020 was a pivotal
step for the Group, providing a solid foundation for the business
to move forward extending and enhancing Group bank facilities
further for three years to July 2023, alongside a newly agreed
schedule of enhanced pension contributions. This has also provided
renewed focus on communications between bank, pension trustees and
Company management, with quarterly tripartite reviews of progress
and performance of both the Company and the pension fund. This has
resulted in proactive cooperation between the parties and the
initiation of actions aimed at reducing the pension deficit.
Momentum built steadily in the second half of the year with a
successful focus on winning new business, operational execution and
cash generation. As a result, and with demand in a number of key
markets strengthening faster than was previously anticipated, the
Group expects to report, subject to audit, total revenues for the
CTP division broadly in line with last year, and Aerospace division
revenues (which comprise less than 5% of Group total revenues)
materially below last year, following the COVID-19 pandemic impact
on the Aerospace sector.
The overall Group performance has enabled significant capital
investment to be made to facilitate future business growth whilst
retaining a strong financial position with net debt excluding
IFRS16 lease liabilities at 31 March 2021 reducing to GBP20m (31
March 2020 GBP22.1m).
CTP
FY 2021 trading in the CTP division was stronger than the Board
had previously anticipated, with total revenue including tooling
broadly in line with levels last year. As previously announced, the
division has secured significant new business in the second half of
the year mainly related to the medical sector and consisting of
both COVID and non-COVID related products. It is particularly
pleasing to note that alongside increasing demand from existing
customers, the division was also able to secure new customers. As a
consequence, tooling orders were particularly strong as the
division prepares for volume increases of existing products and the
introduction of new ones. A strong focus on cash generation has
enabled the division to make significant investments in capital
expenditure to support its ability to deliver on anticipated future
production contracts without increasing net debt.
Aerospace
In common with many businesses in the sector, the Aerospace
division was significantly impacted by the downturn in air travel
caused by the pandemic. Order intake was dramatically reduced in
the first half but stabilised year on year in the second half,
albeit at a lower level.
Timely and decisive management action resulted in a reduction in
the division's cost base and this along with government support
resulted in the business trading at a reduced profit and remaining
cash generative; a significant achievement given the impact of the
pandemic on the aerospace sector as a whole. Recovery in the
aerospace sector is expected to take several years but focused
action on winning new business has been initiated and there are
early signs of opportunities to grow with new as well as existing
customers.
Governance
The Company announces that Frank Doorenbosch, who was appointed
a Non-Executive Director on 1 February 2021, will take over as
Chairman of the Remuneration Committee from David Toohey, the
current Remuneration Committee Chairman, with effect from 30 April
2021. David will step down from the Board on 30 April 2021. Phil
White was appointed Chief Financial Officer on a permanent basis
from 1 March 2021, having initially taken over from Matt
Durkin-Jones when he stepped down on 17 December 2020.
The Group now has a refreshed Board bringing strong and relevant
experience to the streamlined and re-focused Group, divested of its
loss-making Wipac division from the prior year. This complements
the new Tripartite Agreement established with the Group's bank and
pension trustees to form a stable basis on which to drive renewed
growth for the business.
Outlook
The CTP division has exited FY 2021 with good momentum and the
potential to target further growth opportunities as markets
continue to recover. Having enhanced operational execution and
focus during FY 2021, we believe the division is well set for
further progress in the current year. We expect that recovery in
aviation markets will take longer and consequently that performance
in the Aerospace division in the current year will be similar to
that achieved in FY 2021.
The Board continues to monitor market conditions closely and
expects to provide further guidance for the current year at the
time of the announcement of the Group's FY 2021 results.
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
Nick Sanders - Executive Chairman
FTI Consulting 020 3727 1340
Nick Hasell / Susanne Yule
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END
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