Trading update and director appointment

RNS Number : 5270N

Carclo plc

25 September 2019

 

25 September 2019

Carclo plc

Trading update and director appointment

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 holding its Annual General Meeting at 11.30am today at the Law Society, Chancery Lane, London.

The Technical Plastics ("CTP") and Aerospace Divisions have both performed ahead of expectations for the first five months of the current financial year, with CTP operating profits well ahead of the same period last year.

Whilst significant underlying operating losses continue to be incurred at Wipac, the main operating business in the Group's LED Technologies Division, increased levels of customer pricing support have helped mitigate this situation in recent weeks. As previously announced certain mid-volume programmes are being moved by customers to alternative suppliers, as part of the strategy to refocus Wipac back on its historic low-volume high-end vehicle markets. These moves are generating cash, as assets specific to the programmes are realised, which has assisted in the Group's recent net debt reduction.

Group net debt at the end of August 2019 was £26.6m, excluding the liabilities associated with operating leases, which compares favourably to the £35.9m reported, on the same basis, at the end of September 2018, the date of the Group's last published accounts. It should be noted that the level stated for the end of August 2019 excludes £7.4m of operating lease liabilities that are required to be treated as debt under IFRS16, which was implemented with effect from 1 April 2019. In light of the lower net debt levels, the Group's overdraft facility is being reduced by £5.0m at the end of September, leaving total bank facilities of £40.0m in place for the Group.

Discussions remain ongoing with parties interested in the potential acquisition of the Wipac business. Whilst their due diligence is at an advanced stage and they are in direct dialogue with Wipac's customers, there remains no certainty that a sale of Wipac will occur.

Preparation and auditing of the accounts for the year ended 31 March 2019 has made good progress in recent days, with completion expected in the coming weeks.

Antony Collins, who has been fulfilling the role of Chief Restructuring Officer since he joined the Group at the end of May 2019, is to be appointed as the Group Chief Executive and join the Board with effect from 1 October 2019. At this time Mark Rollins, the Group Chairman, will cease to act in an Executive capacity and will return to a Non-executive Chairman role.  It is currently planned that Antony will fill the Group Chief Executive Officer role on an interim basis whilst the ongoing restructuring of the Group is completed and a platform from which to set the long-term strategy is established. Antony will be attending the Annual General Meeting later today for shareholders wishing to meet him.

There is no information required to be disclosed pursuant to paragraph LR 9.6.13R of the Listing Rules of the Financial Conduct Authority in connection with Antony's appointment.

Separately, Paul Below, Group Finance Director designate, whose appointment was announced on 3 September 2019, has decided not to continue in the role and will leave the Group on 27 September 2019. In his place, Ed Watkinson is being appointed as Group Chief Finance Officer designate, commencing on 30 September 2019.  He is a Chartered Management Accountant with a twenty-year career in interim restructuring and finance roles and a strong track record of delivery in turnaround situations across a variety of industries in the publicly listed, private equity and privately-owned company environments. Ed will become the Group Chief Finance Officer when the current Group Finance Director, Sarah Matthews-DeMers, leaves the Group at the end of October as previously announced. It is currently planned that Ed will fill the Group Chief Finance Officer role on an interim basis and will not, at least initially, join the Board.

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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