Lower sales to hit Carclo profits
CARCLO said this morning that despite enjoying strong trading in the second half of the year, lower than expected sales at one of its divisions will impact on group profitability.
The Ossett-based technical plastics company said that the group’s operating businesses, as expected, are enjoying stronger trading in the second half of the financial year but that “lower than previously expected sales at Conductive Inkjet Technology (CIT) will reduce the forecast profitability of CIT and hence of the group in the second half.”
It said that sales of coated film in the second half are set to be ahead of the first half sales number, but below the board’s previously disclosed estimated range due to a slower than anticipated ramp up in production on the programs which are using XSense touch sensors.
Carclo said: “The market for XSense and other metal mesh solutions is growing rapidly as adoption begins to gain traction at the expense of ITO touch sensor solutions in this $5 billion market. At the same time we have seen competition in the market increase for all touch solutions, which is causing pricing pressure; while we expect developments in the touch sensor market to become clearer during 2014, this is likely to reduce coated film revenues and margins versus our previous estimates. The product capabilities of XSense are strong and we remain confident that it can gain a significant market share in this rapidly growing market.”
Meanwhile, the group said its Technical Plastics, LED Technologies and Precision Engineering businesses are all performing in line with the board’s expectations.
“The group’s balance sheet is strong and its funding remains secure. The board looks forward to sales and profits progression across the group in the coming financial year,” the company said.
Carclo saw pre-tax profit in the six months to September 30 2013 come in at £1.8m, an increase from £1.1m from the previous year.
Revenue shot up by 13% to £45m at the company, which makes injection moulded plastic components used in medical, optical and electronics products, including the lights of supercars.
