CARCLO
Pretax profits rise 46.5% / Large increase in capital expenditure / Technical Plastics sees growth in medical and optical markets / Planning to exit business with Ford Europe
Encouraging financial results and excellent strategic progress was the assessment of chairman Christopher Ross when presenting the year-end trading performance of technology-led plastics group Carclo (Ossett, West Yorkshire / UK; www.carclo.co.uk). Profits before tax increased by 46.5% to GBP 6.8m (EUR 7.6m) as group turnover in the year to 31 March 2011 rose 9.1% to GBP 88.6m (EUR 99.2m). Net debt was 31% higher at GBP 19.1m (EUR 21.4m), principally due to a substantial increase in total capital expenditure, up to GBP 7.0m (EUR 7.8m) from GBP 2.8m (EUR 3.1m) the previous year. The expenditure included more moulding machines and clean room facilities for the medical business of Carclo Technical Plastics and substantial investment in the fine line production unit at Conductive Inkjet Technology.
Carclo Technical Plastics remains fractionally short of its target operating margin of 10%, but underlying operating profits increased 14.3% to GBP 5.0m (EUR 5.6m) on sales up 9.1% to GBP 55.8m (EUR 62.5m). Growth came mainly from medical diagnostic customers and from its proprietary LED optics, where sales improved 26.8% to GBP 3.5m (EUR 3.9m). Capital expenditure of GBP 3.4m (EUR 3.8m) included re-commissioning of a mothballed plant in Scotland and expansion of the new factory in Bangalore. New enquiries from China dropped markedly in the year’s second half and the business is experiencing more interest in shorter supply chains, particularly in the US. The factory in China is now expected to become less of a low-cost manufacturing base and more of a unit to support global customers in accessing the Chinese market.
Sales improved 8.5% to GBP 33.1m (EUR 37m) in Carlo Precision Products but a fall in the operating margin from 8.7% to 6.7% led to a decline in operating profit to GBP 2.2m (EUR 2.5m). The supercar LED lighting activity moved from its design and development phase into production, with fourth quarter sales four times ahead of the same period the previous year. During the next 12-18 months the business will withdraw from the supply of antennas and cables to Ford Europe, its last involvement in volume automotive products. This will hit sales by some GBP 8.0m (EUR 9.0m) but Carclo says: “We are confident that the capital and management resource will be more effectively applied in growing our LED activities.”
The activities of Conductive Inkjet Technology focus on the high-speed printing or patterning of pure metallic circuits on to plastic film. Four emerging markets have now been identified: printed electronics, touch sensors, organic LED lighting devices and organic photovoltaic devices. The partnership with Atmel Corporation (San Jose, California / USA; www.atmel.com), established in December 2009 – see Plasteurope.com of 11.12.2009 – has led to the supply of significant quantities of touch sensors over the last six months, which can now be produced at speed and at high yield on a roll-to-roll, web-based process. An early nomination has been received for a new concept smartphone, with production expected to start before the end of 2011. Plans for a production scale-up are progressing nicely, with key equipment already on order. Also, a new facility for production of high volumes of photosensitive film is expected to be in place by mid-2012.
According to chief executive Ian Williamson, there has been a noticeable change over the last 12 months in the way Carclo is viewed by the financial market. “Shareholders and investors are looking increasingly at the transformational opportunity presented by Conductive Inkjet Technology’s fine line technology in touch screen applications,” he says. “This is understandable because the profit potential of this one opportunity alone exceeds Carclo’s current profitability.”
e-Service:
Carclo full year results for the year results for the year ended 31 March 2011 as a PDF document
Carclo Technical Plastics remains fractionally short of its target operating margin of 10%, but underlying operating profits increased 14.3% to GBP 5.0m (EUR 5.6m) on sales up 9.1% to GBP 55.8m (EUR 62.5m). Growth came mainly from medical diagnostic customers and from its proprietary LED optics, where sales improved 26.8% to GBP 3.5m (EUR 3.9m). Capital expenditure of GBP 3.4m (EUR 3.8m) included re-commissioning of a mothballed plant in Scotland and expansion of the new factory in Bangalore. New enquiries from China dropped markedly in the year’s second half and the business is experiencing more interest in shorter supply chains, particularly in the US. The factory in China is now expected to become less of a low-cost manufacturing base and more of a unit to support global customers in accessing the Chinese market.
Sales improved 8.5% to GBP 33.1m (EUR 37m) in Carlo Precision Products but a fall in the operating margin from 8.7% to 6.7% led to a decline in operating profit to GBP 2.2m (EUR 2.5m). The supercar LED lighting activity moved from its design and development phase into production, with fourth quarter sales four times ahead of the same period the previous year. During the next 12-18 months the business will withdraw from the supply of antennas and cables to Ford Europe, its last involvement in volume automotive products. This will hit sales by some GBP 8.0m (EUR 9.0m) but Carclo says: “We are confident that the capital and management resource will be more effectively applied in growing our LED activities.”
The activities of Conductive Inkjet Technology focus on the high-speed printing or patterning of pure metallic circuits on to plastic film. Four emerging markets have now been identified: printed electronics, touch sensors, organic LED lighting devices and organic photovoltaic devices. The partnership with Atmel Corporation (San Jose, California / USA; www.atmel.com), established in December 2009 – see Plasteurope.com of 11.12.2009 – has led to the supply of significant quantities of touch sensors over the last six months, which can now be produced at speed and at high yield on a roll-to-roll, web-based process. An early nomination has been received for a new concept smartphone, with production expected to start before the end of 2011. Plans for a production scale-up are progressing nicely, with key equipment already on order. Also, a new facility for production of high volumes of photosensitive film is expected to be in place by mid-2012.
According to chief executive Ian Williamson, there has been a noticeable change over the last 12 months in the way Carclo is viewed by the financial market. “Shareholders and investors are looking increasingly at the transformational opportunity presented by Conductive Inkjet Technology’s fine line technology in touch screen applications,” he says. “This is understandable because the profit potential of this one opportunity alone exceeds Carclo’s current profitability.”
e-Service:
Carclo full year results for the year results for the year ended 31 March 2011 as a PDF document
14.06.2011 Plasteurope.com [219590-0]
Published on 14.06.2011