Listed manufacturer braces for hit on its profits
Wakefield-based manufacturer Carclo Group has warned its profits are likely to be affected by the virus emergency, despite keeping most of its sites operational throughout the lockdown.
The business, which is a global supplier of technical plastics products, has published a trading update for the year ended 31 March 2020.
It says the initial outbreak of COVID-19 had limited impact on trading in final quarter of FY2020, but noted disruption has been more extensive in the first quarter of the current financial year.
The update adds: “Given the division’s focus on the medical market, overall demand across the Technical Plastics business has remained relatively resilient, with a number of its products being used directly in COVID-19 testing applications.
“Notwithstanding continued demand, the implementation of governmental guidance on social distancing and some limited shutdowns have impacted efficiency and throughput across the Group, which will inevitably have a negative impact on profitability.
“Demand for the Aerospace business has been significantly impacted by the downturn in the aerospace sector.
“Management has already taken action to mitigate these challenges, including accessing Government support programmes where available and a reduction in variable costs where appropriate.
“The Board has taken a 20% cut in fees and salaries for the first quarter of the new financial year.
“The Group remains focused on ensuring operational continuity where it can; however, it remains very difficult to predict how the ongoing crisis will affect performance.”
Carclo says discussions are continuing with the Group’s lending bank and pension trustees to agree a long-term financing position for the business.
And it stresses that while negotiations are ongoing, there is no certainty that a satisfactory and affordable agreement will be reached.
The company’s Board has decided to delay the publication of its Full Year Results for the year ended 31 March 2020 beyond 30 June 2020, the date on which Carclo had previously expected to announce.
The revised publication date will be published in due course.