Uncertain future for listed manufacturer’s loss-making division
Wakefield-based manufacturer Carclo Group said “significant” underlying operating losses continue to be incurred at Wipac, the main operating business in the Group’s LED Technologies Division.
However, in a trading update published today the business said increased levels of customer pricing support have helped mitigate this situation in recent weeks.
Its update added: “As previously announced certain mid-volume programmes are being moved by customers to alternative suppliers, as part of the strategy to refocus Wipac back on its historic low-volume high-end vehicle markets.
“These moves are generating cash, as assets specific to the programmes are realised, which has assisted in the Group’s recent net debt reduction.
“Discussions remain ongoing with parties interested in the potential acquisition of the Wipac business. Whilst their due diligence is at an advanced stage and they are in direct dialogue with Wipac’s customers, there remains no certainty that a sale of Wipac will occur.”
Carclo, a manufacturer of fine tolerance injection moulded plastic parts mainly for the medical, automotive lighting and optics markets, also reported that its Technical Plastics and Aerospace Divisions have both performed ahead of expectations for the first five months of the current financial year.
It said its Group net debt at the end of August 2019 was £26.6m, excluding the liabilities associated with operating leases, which compares favourably to the £35.9m reported, on the same basis, at the end of September 2018, the date of the Group’s last published accounts.
