Revised funding agreed for listed manufacturer
Wakefield-based manufacturer Carclo Group says it has agreed revised funding arrangements with its main secured creditors, HSBC and the Pension Scheme.
These provide the business, which is a global supplier of technical plastics products, with access to ongoing bank facilities as well as visibility over repayment schedules through to July 2023.
New facilities have been entered into with the Group’s lending bank, HSBC, which comprise a Term Loan of £34.5m and a Revolving Credit Facility of £3.5m.
In parallel, the Group reached agreement with the Trustees of the Pension Scheme in respect of both the actuarial deficit and the resultant deficit repair contributions to be made over the next three years; £2.8m (2021), £3.9m (2022) and £3.8m (2023).
The Leeds Restructuring team at Addleshaw Goddard advised Carclo on the refinancing.
In an update on current trading, Carclo says group revenue for the continuing businesses for the first quarter was 12% lower than the same period last year.
In anticipation of a material reduction in activity in both businesses during the first quarter, the Group has implemented initiatives to preserve operational continuity as well as matching cost to reduced demand.
And it has made use of Covid-19 relief schemes, particularly in relation to job retention.
Its update adds: “As a result of an effective response by the business, and more resilient demand conditions in certain segments, the overall trading performance to 31 March 2021 was ahead of the Board’s initial planning assumptions, with both the Technical Plastics and Aerospace divisions recording encouraging performances.
“Group net debt, excluding IFRS16 lease liabilities, as at 27 June 2020 was £24.2m (31 March 2020: £22.1m).
“The Technical Plastics business benefited from robust demand for products relating to Covid-19 testing, which partially offset a reduction in demand for other products in both the medical diagnostics and industrial sectors that had been exacerbated by the impact of Government-imposed lockdown of a customer’s facility in India.
“The business was also successful in securing a number of new tooling orders in the medical diagnostics sector, which are expected to deliver significant production volumes in future years.
“The Aerospace Division performed better than anticipated in the first quarter, largely as a result of continued offtake from the existing order book, which partly offset the impact of a significant reduction in both new-build and spares demand from Airbus.”
