REVENUE AND PRE-TAX PROFITS DOWN FOR LISTED MANUFACTURER
01 November 2019
Wakefield-based manufacturer Carclo Group has recorded a tough year of trading during 2019, with a dip in both revenue and pre-tax profits.
The business, which makes fine tolerance injection moulded plastic parts mainly for the medical, automotive lighting and optics markets, has today published its preliminary results for the year ended 31 March 2019.
Its update notes: “2019 was a challenging year for the Group, with a significant deterioration in the profitability of the LED Technologies division more than offsetting encouraging performances in Technical Plastics and Aerospace.
“Revenue decreased by 1% to £144.9m (2018: £146.2m). Proforma unaudited adjusted profit before tax reduced by £2.7m to £6.4m, with underlying loss before tax of £0.7m.”
As reported in September, Carclo has been involved in talks relating to a possible acquisition of loss-making Wipac, which is the main operating business in the Group’s LED Technologies Division.
Commenting on the preliminary results today, chairman Mark Rollins said: “The year to 31 March 2019 was an extremely challenging one for Carclo, with Wipac’s poor operational and financial performance putting significant pressure on the whole Group.
“However, with Technical Plastics and Aerospace delivering encouraging performances in 2019, which have continued in the first half of the current year, and Wipac’s immediate cash needs being funded by its customers, the Group’s net debt has fallen over the past six months.
“This is providing a foundation for the ongoing long-term funding and pension contribution negotiations which, along with a successful exit from the Wipac business, are key to the future of Carclo.”
He added that a turnaround plan for Wipac was implemented after the year-end, on 1 July 2019, designed to return it to a position of profitability and cash generation over the following 18 months.
He said a number of approaches were received from parties interested in the potential acquisition of Wipac, adding that the Board is actively pursuing its sale.
However, Rollins cautioned: “Discussions remain ongoing, but there remains no certainty that a sale of Wipac will occur. In the event that no disposal occurs, the Board will need to assess the options for this business.
“For the good of the Group, a near-term and permanent solution for Wipac needs to be delivered as its current cash requirements cannot be met by the Group beyond the short term.”