Carclo agrees bank borrowing extension and confirms it is actively pursuing the sale of its loss-making division
Wakefield-headquartered listed plastic components manufacturer Carclo has said that discussions are “actively being pursued” with potential purchasers of its loss-making LED division, Wipac.
Carclo also updated the markets this morning on its progress in unlocking its pension and bank issue, which will allow it to extend its borrowing facilities and to publish its delayed annual results later this month.
The firm has been undertaking discussions with its bank and the pension trustee in relation to the extension of the group’s borrowing facilities. Its current bank facilities extend to March 2020.
Carclo said: “As part of this process, formal agreement was reached yesterday with the pension trustee regarding the level of pension contributions to be paid by Carclo until January 2021. This now allows the Group to finalise an agreement with the bank regarding the extension of the Group’s existing borrowing facilities for the same period. The principal terms of the extended facilities have been agreed with the bank and both parties are now working to conclude the formal banking documentation.”
The agreement will allow the results for the year ended 31 March 2019 to be completed and the accounts audited, said Carclo.
The firm added: “Given the work required to do this, the Group will not announce its results for the 2019 financial year on 23 July.
“However, the preparation of the results and their audit are well advanced and, subject to finalising the banking documentation, the Board currently hopes to be able to complete the required work and announce the results for the 2019 financial year by 31 July 2019, as required under the Listing Rules.”
Carclo said that the first three months of the current year had seen its Technical Plastics and Aerospace Divisions performing better than the prior year, with the Technical Plastics Division also “well ahead” of the Board’s expectations.
But the LED Division, driven by the poorly performing Wipac business, has been incurring significant losses. Carclo added: “It is anticipated that the customer support initiatives implemented on 1 July will result in an improving, albeit still lossmaking, performance in the months ahead. A return to profitability now depends upon the operational improvement elements of the turnaround plan being delivered.
“In the meantime, discussions are actively being pursued with potential purchasers for Wipac.”