Listed manufacturer aiming to restore fortunes of loss-making subsidiary
A listed Yorkshire plastic parts manufacturing group said it was working to turn around one of its businesses, which is suffering “significant losses”.
Carclo, a global producer of injection moulded plastic parts mainly for the medical, automotive lighting and optics markets, said it aimed to return its subsidiary Wipac to profitability.
In a statement released today, Wakefield-based Carclo said: “Wipac is working with its customers to implement a plan to refocus the operation on its historic low-volume high-end vehicle markets where it had previously been financially successful.
“This strategy is likely to result in a non-cash write down of some project assets in the accounts for the year ending 31 March 2019 and work is currently ongoing to quantify the amount of the write down.
“As well as managing the smooth exit of certain programmes, which will significantly reduce the Group’s cash requirements for working capital and capital expenditure, a detailed plan is being put in place to turn around the financial and operational performance of Wipac.
“The plan has two major elements to it: customer support and operational self-help. The objective of this plan is to return Wipac to a position of profitability and cash generation over the next 18 months. Today the Wipac business is incurring significant losses.”
The Group noted it had been approached by parties interested in the potential acquisition of Wipac. But it stressed discussions with these groups were are at an early stage, and there was “no certainty” that a sale of Wipac would occur.
The Group said: “As previously announced, discussions remain ongoing with the bank, pension trustee and other stakeholders in relation to the extension of the Group’s borrowing facilities, which are currently due to mature in March 2020.
“During the past week, Wipac has received 8.7m Euros for outstanding tooling balances from its customers.
“This money has been used to pay suppliers and to fund an expiring short-term £2m overdraft facility. As part of the ongoing discussions, the March net debt to EBITDA banking covenant test has again been deferred by the bank, this time until 31 July 2019.”
As part of it same update, the Group said its Aerospace and Technical Plastics Divisions continued to perform slightly ahead of expectations for the current financial year.
And it announced that Sarah Matthews-DeMers, Carclo Group Chief Financial Officer, will leave the Group at the end of October to take up a similar role with another listed company.
Carclo is continuing to look for a permanent Group CEO, a role which has been filled on a temporary basis by Mark Rollins, Chairman, since the middle of January this year.
