Carclo’s H120 results show that the remaining businesses following the exit from Wipac in December provide a basis for a sustainable group going forward. The continuing businesses generated £56.1m revenues and £3.3m underlying EBIT. However, there remain significant challenges in reaching agreement on long-term funding with the lending bank and pension trustee. Our estimates will remain under review until these are resolved.
The Technical Plastics division (CTP) increased revenues by 12% year-on-year to £52.4m through a combination of growth in the key medical diagnostic market, new programme wins and £1.3m favourable forex movements. CTP India, whose largest customer makes ATMs, also experienced a significant increase in market share and benefited from its key customer’s newest product ramping up in volume. As anticipated, activity in CTP Czech was lower following the loss of a major industrial customer as a result of acquisition, and the facility footprint was reduced. Underlying divisional EBIT rose by 45% to £4.6m. The EBIT margin improved by 2.0pp to 8.9%.
Aerospace revenues grew by 18% to £3.7m and underlying EBIT by 18% to £0.7m. This was driven by build rate increases at Airbus, market share gains by a key customer, improved levels of spares activity and a large customer increasing stocks ahead of Brexit.
Underlying central costs increased by £0.4m to £2.0m, primarily reflecting the portion of IT costs that had previously been charged to Wipac. There were also £1.9m exceptional advisors fees associated with the ongoing financial restructuring. These fees continue to be incurred, albeit at a lower level following the Wipac exit. While the group has negotiated financing and pension contributions through to January 2021, management is keen to secure long-term solutions swiftly.