Revenues and profits down at plastics manufacturer as demand slumps
Ossett-based high-precision plastics components provider, Carclo, has said it faced difficult market conditions compared to the prior year as it publishes its half-year results for the six months ended 30 September 2023.
The group says demand for diagnostic equipment fell with key customers adjusting to post-COVID requirements, but that demand from the aerospace sector remained robust.
Revenue from continuing operations declined by 7.2% to £66.9m (H1 2023: £72.2m) with the business also reporting a pre tax loss of £2.5m (H1 2023: £1.7m pre tax profit).
Underlying operating profit from continuing operations was £2.2m (H1 2023: £3.6m).
Frank Doorenbosch, chief executive officer said: “The Carclo team has responded robustly to the fall in demand by our major customers by adapting our business to achieve enhanced contribution margins through increased efficiency.
“This has allowed the group to maintain profitability from its manufacturing operations and to achieve a significant increase in cash generation in H1 2024 compared to H1 2023.
“This activity will continue through H2 2024 to place the group on a sound footing for FY 2025, so we are well placed to satisfy the future recovery in demand and retain our position as the trusted partner of major blue-chip customers, in markets with medium to long term demand.”
Carclo adds the tough market conditions are expected to continue in the near term, primarily in the US.
A major restructuring plan for its US business is being conducted to cut expenses and to drive operational efficiency, with the full year benefit expected to be realised in FY 2025.