REG - Carclo plc - Trading Statement

CarcloAnnouncement

26/04/2024 07:00

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RNS Number : 1153M  Carclo plc  26 April 2024

26 April 2024

 

Carclo plc

("Carclo" or the "Group")

 

Full-Year Trading Update

 

Today, Carclo plc, a global leader in delivering high-precision critical
components to the life sciences, aerospace, optics, and technology industries,
provides an update on trading for the financial year ended 31 March 2024 ("FY
2024").

 

Trading Update

 

The Group trading performance exceeded the Board's previous expectations
during the second half year of FY 2024, showing improvement over the first
half year performance. This was achieved by focus on margin improvement and
the benefits of the restructuring undertaken in Europe and started in the US.

 

Cash generation was stronger than the Board's previous expectations. The
closing cash position was £6.0 million, with an undrawn revolving credit
facility of £3.2 million, giving total cash availability of £9.2 million.
This compares to £10.4 million, on the same basis, at the end of FY 2023.

 

Group net debt was £30.4 million (FY 2023 £34.3 million).

 

The Group has achieved covenant compliance through FY 2024.

 

Strategic Achievements and Financial Health

 

FY 2024 has been a year of substantial progress and strategic execution for
Carclo. Aligned with our core strategic priorities, we have taken significant
steps to strengthen our balance through focused capital investment to improve
efficiency, yield, quality, and safety. Rigorous management of working capital
is a cornerstone of our strategy.

 

We have achieved notable advancements in asset utilization by standardising
our processes and equipment, while cultivating a culture of best practice
sharing throughout the organisation, embodied by our "One Carclo" ethos. This
unified approach has streamlined our operations, markedly boosting our
operational agility and enabling us to respond more swiftly and effectively to
market dynamics.

 

H2 Financial Overview and Comparative Analysis

 

In the second half of FY 2024, our strategic initiatives began to bear fruit,
as evidenced by a detailed comparative analysis against the budget, previous
year's performance, and our forecasts.

 

Moreover, an analysis of profit and cash flow in Q4 shows a stronger
performance compared to Q3, indicating the positive trajectory we are on and a
robust response to market demands as the year progressed. This quarterly
insight not only demonstrates our operational success but also reinforces the
effectiveness of our strategic focus in driving financial health and
stability.

 

Carclo Technical Plastics (CTP)

 

We have redirected our efforts from unprofitable and non-core activities to
concentrate on margin enhancement. This disciplined approach in our financial
and operational management has solidified our financial health and
significantly boosted our profit margins. Carclo now enjoys a strong financial
foundation, demonstrating our dedication to prioritizing profitability over
mere revenue expansion.

 

Despite considerable market challenges, our Carclo Technical Plastics (CTP)
division has maintained a strong performance, driven by our commitment to
operational efficiency and responsiveness to market needs. The division has
skillfully navigated external pressures, continuing to uphold our standards of
quality and innovation.

 

Leveraging the success of our restructuring in EMEA, we are actively
progressing with consolidating our U.S. operations. This effort includes
recent facility closures and the strategic centralization of activities in
Pennsylvania. This initiative is crucial for optimizing our global footprint
and fully leveraging our resources. We expect to substantially strengthen
Carclo's position in the market by completing this restructuring within the
next six months.

 

Aerospace

 

The growth of our Aerospace division is sustained by our focus on specialist
precision solutions that elevate our competitive position. We have seen
significant success in the South Asian markets and consistent improvements in
our traditional markets. Our advanced precision technology capitalizes on
emerging opportunities in revitalizing markets, while easing supply chain
constraints boost our progress.

 

Looking ahead, we are planning investments to diversify our product range at
both operational sites. This initiative is designed to capitalise on evolving
market dynamics within the aerospace industry, ensuring that Carclo stays at
the forefront of technological advancements and market demand.

 

Sustainability and Innovation

 

Sustainability remains at the heart of our operations. We are dedicated to
integrating sustainable practices into every aspect of our business, from
reducing environmental impact to ensuring social and economic responsibility.
Our efforts are aimed at creating long-term value for all stakeholders while
maintaining the high standards of quality and service that define Carclo.

 

Governance and Stakeholder Engagement

 

We remain deeply committed to maintaining high standards of governance and
transparency, ensuring that our strategies and operations align with the best
interests of our stakeholders. The Board continues to work closely with all
partners to ensure that our strategic objectives are met with integrity and
accountability.

 

Outlook

 

Looking forward, Carclo is optimally positioned to continue on its journey to
deliver operational improvement and sustainable growth. The near term focus is
to ensure the successful execution of our US restructuring, which is expected
to yield significant benefits in FY 2025 and beyond.

 

In order to drive our competitive advantage and enhance shareholder value, we
remain focused on innovation in our products, processes, and services.

 

We are confident that this, combined with our strategic initiatives and
ongoing commitment to operational excellence, will enable us to meet future
challenges with continued success.

 

Enquiries

Carclo plc - 01924 268040

Frank Doorenbosch - Chief Executive Officer

Eric Hutchinson - Chief Financial Officer

 

About Carclo plc

Carclo plc is a public company listed on the Main Market of the London Stock
Exchange, known for its innovation, precision, and trusted partnerships across
essential industries.

 

LEI: 21380078MEM399JPI956

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