Weaker division offset by “out performance” in LED technologies
Ossett technical plastics manufacturer Carclo has had a challenging start to the financial year, with its technical plastics section experiencing a weaker performance which was offset by an “out performance” by its LED technologies division.
In a half-year report to 30 September, the firm said that its Technical Plastics division underlying operating profit decreased by 6% to £3.2m.
The company said that the division had a challenging start to the financial year with some key new programmes delayed into the second half and some operational issues that have now been largely resolved. The Board expects the division’s performance to be significantly better in the second half.
LED Technologies performed strongly, with revenues up 24% to £25.6m and underlying operating profit up 16% to £3.4m. The division saw solid product sales in its supercar lighting business alongside strong design, development and tooling activity and new customer programme wins.
Carclo’s net debt rose to £29.6m at the half year (31 March 2017 – £26m) which it said reflected the timing of capital investment and the payment profile of ongoing design, development and tooling programmes.
Michael Derbyshire, chairman, said: “The operational issues experienced within the first half of the year within Technical Plastics are now largely resolved and as a result the division’s operating margins are expected to improve significantly in the second half, boosted by tooling and programme profitability. We have expanded the footprint of the division with the new factory build in India and the redevelopment of Mitcham and these actions will support our growth aspirations over the next few years.
“In LED Technologies, Wipac has continued to perform well, with strong design, development and tooling activity and continued success in winning new customer programmes. There are several supercar pre-development programmes underway which will, once confirmed as full programmes, contribute to a stronger second half.
“We have completed a warehousing expansion at the Buckingham facility and this, along with the successful relocation of LED manufacturing to the CTP facility in Czech Republic, will provide capacity to continue to deliver our growth plan over the years to come
“The Board anticipates that the Group will trade in line with its expectations for the full year, with all three divisions set to have a stronger second half performance, and the Group remains on track to grow substantially over the medium term.”
