Carclo plc Update on contract cancellation (0222B)
30 May 2023 - 7:07PM
UK Regulatory
TIDMCAR
RNS Number : 0222B
Carclo plc
30 May 2023
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30 May 2023
Carclo Plc (the "Group")
Update on Contract Cancellation
Carclo Plc (LSE: CAR) is pleased to announce a positive
conclusion to commercial discussions with a leading global OEM
related to the cancellation of a future supply contract referred to
in the Group's announcement on 7 December 2022.
The original ten-year Framework Agreement, announced in December
2020, covered the supply of a range of components for use in
laboratory-based PCR diagnostic systems and was projected to
deliver incremental sales of between by GBP10m to GBP15m
annually.
Following the completion of the design and engineering phase, a
contraction in the end-market demand for COVID testing influenced
the customer's decision to suspend progression into the production
phase. Despite this, Carclo has largely fulfilled and received
payment for its design and engineering phase.
The Group has now signed a mutually satisfactory settlement
agreement with the customer concerning working capital and
recompense for business disruption. While the specifics of this
agreement remain confidential, it is expected to largely offset the
Group's financial exposure arising from the early termination of
the contract.
Carclo has also rapidly implemented a plan to repurpose the
production capacity assigned to this project. The majority of the
capital investments, inclusive of infrastructure such as buildings,
clean rooms, and state-of-the-art equipment, have been reallocated
to enhance projects with existing strategic partners.
Frank Doorenbosch, CEO, reflected on the situation: "The
cancellation, though regrettable, has served to highlight Carclo's
capacity for agility and resilience. We have responded promptly,
optimising our asset utilisation whilst continuing to focus on our
strategy on stability and balance sheet fortification. These
actions demonstrate our unwavering commitment to delivering
securing long-term shareholder value."
About Carclo plc
Carclo is a preferred and trusted partner of global customers,
providing high-precision critical components to the life sciences,
aerospace, optics, and technology industries.
LEI: 21380078MEM399JPI956
Enquiries:
Carclo plc
01924 268040
Frank Doorenbosch - Chief Executive Officer
David Bedford - Chief Financial Officer
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