Almost half the Group's share price has been wiped off after its previously forecast stronger H2 underperformed.
Companies: Carclo plc
Plastics manufacturer Carclo (LON: CAR) shares have been hit hard today as Management has warned on full-year profits after delays in a number of large contracts.
Shares plummetted 47% to 65p on Monday morning after the Group announced its previously anticipated stronger second half performance was now unlikely to be achieved.
It said the "delay in the awarding of two large tooling and automation contracts" as well a delay in an expected increase in orders from a long-standing customer would mean FY17 profits would be "significantly below expectations".
Management also warned on profits for future years...
"As a consequence of some of these delayed projects and lower customer orders, the Board has now reduced its profit expectations for the 2018/19 financial year albeit these revised expectations will still represent healthy year-on-year growth.
The update went on to announce two board changes, with Robert Brooksbank leaving the Group in March after 14 years as FD. Michael Derbyshire is also leaving the Group after 6 years as Chairman. Non-Executive Director Mark Rollins will assume his position as Chairman at the Group's AGM in July.
Singers downgraded its forecasts in its note on the Group this morning, saying:
"We have reduced PBT in both FY18 and FY19 by 27%, resulting in EPS of 9.1p this year and 11.0p next year, with new contracts still expected to contribute.
We now forecast net debt to be £32.9m at 31/03/18, c.2.1x EBITDA, well within the covenant of 2.75x, falling to £29.4m next year."
They also said that whilst "there are good businesses within the Group, there is a long road of confidence-building ahead", and reduced their target price to 91p and moved to HOLD.
