Better than expected first half performance at manufacturing group

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Listed manufacturer Carclo has hailed significant growth in both revenues and underlying operating margins in its half year results for the six months ended 30 September 2021 as figures returned to pre pandemic levels.

The Wakefield-headquartered business, which makes fine tolerance injection moulded plastic parts, recorded total revenues of £58.7m, up 17.5% on the prior year (H1 2021: £50m) and back to pre-pandemic levels (H1 2020: £56.1m).

Statutory profit before tax from continuing operations was £4.4m (H1 2021: £865,000 loss), and the company made a statutory operating profit of £5.8m (H1 2021: £0.2m).

Carclo says demand for Technical plastics (CTP) products in the medical and diagnostic sectors has continued to increase from both existing and new customers and it expect this will continue in the post-pandemic period.

It warns labour shortages and increased labour costs, particularly in the US, increased raw material costs and extended logistic lead times have all presented significant challenges in the first half.

But it has responded by implementing a range of measures and has managed to mitigate some of the impact of cost pressures by increasing prices.

The company adds it has benefited from strong demand for tooling, with significant orders received for both replacement and new projects.

Its Aerospace division is also showing the early signs of recovery with order intake in the first half exceeding sales. A number of new contracts with existing and some new customers have also been secured.

Nick Sanders, Carclo executive chairman, said: “The Group continued to make good progress in the first half of the financial year.

“In common with many companies, we experienced significant Covid-related operational headwinds, but despite these delivered a strong set of financial results.

“Our first half performance is ahead of our expectations even after the impact of one-off benefits is removed.

“Central costs have been well managed, and our continued focus of cash management has again delivered good cash headroom and reduced bank debt. 

“The Group has also worked closely with the Pension Trustees to develop enhancements to the pension schemes which improve scheme benefits and reduce the overall deficit.

“Subject to there being no significant deterioration in trading conditions as a result of supply chain or Covid-related disruption, the Board expects the positive commercial momentum seen in the first half to continue, with further product sales growth in H2.

“Trading margins for the second half are expected to be slightly lower than H1, reflecting the current higher cost environment.

“Nevertheless, the Board anticipates full year underlying trading will be slightly ahead of expectations.”