‘Improving trend’ for manufacturing group after year of disruption
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Listed manufacturer Carclo says its revenue from continuing operations fell 2.7% to £107.6m (2020: £110.5m) in its preliminary results for the year ended 31 March 2021, released today.
The Wakefield-based company made a pre-tax profit of £6.7m (2020 loss of £545,000), while underlying operating profit from continuing operations decreased by £2.5m to £4.8m (2020: £7.3m).
Carclo, which makes fine tolerance injection moulded plastic parts, says despite the pandemic significantly disrupting its businesses around the world, it has restructured, refinanced and created a “streamlined and simplified” business model.
The firm says it has stabilised its operations and its performance is steadily improving.
It notes its largest division, Carclo Technical Plastics (CTP) recovered well despite temporary plant closures in the first quarter due to the pandemic, with customers and suppliers experiencing significant operational disruption throughout the year.
In spite of these problems, CTP total sales were broadly the same as the prior year.
Carclo’s Aerospace division was “severely impacted” by the downturn in the sector as a whole, resulting in a significant reduction in order intake throughout the year.
In response, the business adjusted its cost base to mitigate the impact of reduced post-COVID volumes and applied the Government support schemes available to the business.
Carclo says these measures resulted in a positive cash generation for the division, despite the worst economic conditions in the aviation sector for decades.
Nick Sanders, Carclo executive chairman, said: “Despite a challenging period for the Group, the continuing businesses performed strongly in 2020/21 and ended the year on an improving trend.
“Following the exit of the loss-making LED business and the completion of a three-year agreement with the Group’s lending bank and pension trustees, Carclo now has a more stable platform from which to develop the business.
“The management structure has been simplified and the senior management and Board significantly strengthened.
“Whilst COVID-19 continues to create some uncertainty over our near-term performance, the Board believes the operating businesses within the Group have attractive long-term growth opportunities, particularly within the medical diagnostics market where the CTP business is well positioned.
“Alongside investing to deliver its organic growth strategy, the Board is working closely with Carclo’s pension trustees on the Group’s defined benefit pension deficit.
“Delivering a reduction in the pension deficit over time will be a key element in translating the performance of the underlying business into value creation for shareholders.”