Carclo bucking trend as profits rise
TECHNICAL plastics group Carclo said today its markets were proving resilient as it posted a 10% rise in profits and reported growth across its businesses.
The Ossett-based business supplies plastic components and produces specialist lighting products for several high performance cars by Porsche, Lotus and Bentley but is increasing its focus on producing injection moulded plastic components for the medical, telecom and electronics sectors.
Announcing its interim results for the six months ended September 30 Carclo said pre-tax profits were up 10.1% to £2.6m and underlying operating profits, before exceptional charges, up 25.2% to £3.3m.
The group said that despite the downturn in the automotive markets its moves into other areas were paying dividends with its LED optics business growing rapidly, up 50% on the equivalent period last year.
The Precision Products division increased sales by 40.0% to £14.2m due to design and development revenues generated from contract wins in specialist lighting, whilst Technical Plastics delivered improved profits on higher medical sales.
However the group has not been completely immune from the economic downturn.
Carclo said that as a result of cost pressure in the UK – the significant increase in energy costs will impact the UK businesses in the second half.
However the group added that the increased profits from tooling contracts associated with the new medical programmes is expected to compensate for these higher energy costs.
Chairman Christopher Ross said: “Profit progression in the first half was good and was in line with our expectations. Many of the markets we serve are proving resilient and, for the most part, have not been impacted by the current economic downturn. In November we have seen a reduction in demand in automotive and electronics markets, but the continued strength of the specialist medical and optical businesses and design and development revenues will help to mitigate the impact on the group. Whilst global demand remains uncertain, we will maintain our focus on cost control and margin improvement.
“Our financing is secure, our strategy is sound and our businesses continue to trade well in a difficult and volatile environment.”
Carclo said net debt for the period was £15.9m with the increase attributed to the acquisition of Jacottet Industrie SA for a net cash cost of £1.6m as well as a £700,000 impact from the re-translation of predominantly US dollar denominated net borrowings.
The group increased its interim dividend by 8.3% to 0.65p.
