Carclo

LN: CAR

£8.4m market cap

10.5p last close

Carclo is a specialist in high-precision plastic moulding principally in healthcare, optical and automotive applications. Its two main end markets are high volume medical consumables and low volume, very high value automotive lighting.

Investment summary

Carclo’s FY19 results show the deleterious impact of the issues at Wipac, which overshadowed profit growth at both the Technical Plastics (CTP) and smaller Aerospace divisions. Group revenues decreased by 1% y o y while underlying EBIT of £1.3m adjusted for exceptionals, including a price concession on exit from the mid-volume automotive business (effectively a revenue impairment), fell by £2.4m to £8.4m (unaudited). Our estimates remain under review until there is more clarity on the exit from Wipac.

Y/E Mar
Revenue (£m)
EBITDA (£m)
PBT (£m)
EPS (fd) (p)
P/E (x)
P/CF (x)
2017A 138.3 17.0 11.0 12.1 1.0 0.9
2018A 146.2 15.5 9.1 9.8 1.2 1.3
2019E 140.5 13.9 6.3 6.5 1.8 1.8
2020E N/A N/A N/A N/A N/A N/A
Industry outlook

The Technical Plastics (CTP) and Aerospace divisions both performed ahead of management expectations for the first five months of FY20, with CTP operating profits well ahead of the same period last year. Wipac continues to incur significant underlying operating losses although increased levels of customer pricing support have helped mitigate this. The transfer of assets for certain mid-volume programmes to alternative suppliers is generating cash, reducing group net debt at end August 2019 to £26.6m (excluding £7.4m operating lease liability) vs £35.9m at end September 2018.

Last updated on 18/11/2019
Sector
TMT
Share price graph
Balance sheet
Forecast net debt (£m) 38.9
Forecast gearing ratio (%) 72
Price performance
%
1m
3m
12m
Actual 7.5 7.5 (85.7)
Relative* 5.1 4.6 (86.5)
52-week high/low 82.8p/10.5p
*% relative to local index
Key management
Mark Rollins Chairman
Antony Collins CEO
Ed Watkinson FD

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