Directorate Change

RNS Number : 4298E

Carclo plc

04 July 2019

 

4 July 2019

Carclo plc ("Carclo" or the "Group")

Update and directorate change

Carclo plc ("Carclo" or the "Group"), a global manufacturer of fine tolerance injection moulded plastic parts mainly for the medical, automotive lighting and optics markets, issues the following update ahead of announcing its results, for the year-ended 31 March 2019, on 23 July 2019.

As announced on 11 June 2019, Wipac is working with its customers to implement a plan to refocus the operation on its historic low-volume high-end vehicle markets where it had previously been financially successful. This strategy is likely to result in a non-cash write down of some project assets in the accounts for the year ending 31 March 2019 and work is currently ongoing to quantify the amount of the write down.

As well as managing the smooth exit of certain programmes, which will significantly reduce the Group's cash requirements for working capital and capital expenditure, a detailed plan is being put in place to turn around the financial and operational performance of the ongoing Wipac business. The plan has two major elements to it: customer support and operational self-help. The objective of this plan is to return Wipac to a position of profitability and cash generation over the next 18 months. Today the Wipac business is incurring significant losses.

Whilst the Group has been preparing this plan it has received a number of approaches from parties, both trade and financial, interested in the potential acquisition of Wipac. Discussions with these parties are at an early stage and there is no certainty that a sale of Wipac will occur.

The Aerospace and Technical Plastics Divisions continue to perform slightly ahead of expectations for the current financial year.

Separately, Sarah Matthews-DeMers, Carclo Group CFO, has informed the Board that she will be leaving the Group at the end of October to take up a similar role with a growing AIM listed company. A search for her replacement will commence shortly. The search continues for a permanent Group CEO, a role which has been filled on a temporary basis by Mark Rollins, Chairman, since the middle of January this year.

As previously announced, discussions remain ongoing with the bank, pension trustee and other stakeholders in relation to the extension of the Group's borrowing facilities, which are currently due to mature in March 2020. During the past week, Wipac has received Euro 8.7m for outstanding tooling balances from its customers. This money has been used to pay suppliers and to fund an expiring short-term £2.0m overdraft facility. As part of the ongoing discussions, the March net debt to EBITDA banking covenant test has again been deferred by the bank, this time until 31 July 2019.

Certain information contained in this announcement would have constituted inside information (as defined by Article 7 of Regulation (EU) No 596/2014) ("MAR") prior to its release as part of this announcement and is disclosed in accordance with the Company's obligations under Article 17 of those Regulations.

Enquiries:
Carclo plc                                                          01924 268040
Mark Rollins - Executive Chairman Sarah Matthews-DeMers - Finance Director FTI Consulting                                                  020 3727 1340 Nick Hasell / Susanne Yule

 

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