Carclo

LN: CAR

£34.4m market cap

46.8p 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 has announced that the issues associated with initiating multiple low-volume lighting programmes in parallel that adversely affected H119 have continued throughout Q319. Progress on the mid-volume programmes, which have dedicated design teams and production cells, has been unaffected, other than a key milestone payment slipping into FY20 At the interim stage management believed that these issues would be resolved by the end of Q3, supporting a second half recovery, but now expects that second half profit levels will be similar to the first half. We revise our estimates, cutting EPS by 37% in both FY19 and FY20.

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 3.9 3.6
2018A 146.2 15.5 9.1 9.8 4.8 5.5
2019E 140.5 14.5 6.9 7.1 6.6 5.6
2020E 150.1 15.6 7.6 7.9 5.9 1.7
Last updated on 21/02/2019
Industry outlook

Following a 1.5pp year-on-year dip in margins in H119, initiatives to improve margins in Technical Plastics have started to deliver results but at a slower rate than management expected at the interims. The smaller Aerospace division continues to perform ahead of management’s expectations.

Last updated on 21/02/2019
Sector
TMT
Share price graph
Balance sheet
Forecast net debt (£m) 37.8
Forecast gearing ratio (%) 68
Price performance
%
1m
3m
12m
Actual (2.2) (40.8) (44.3)
Relative* (4.8) (41.9) (43.2)
52-week high/low 121.0p/45.0p
*% relative to local index
Key management
Mark Rollins Chairman
Sarah Matthews-DeMers FD