Carclo plc Update on trading and dividend (4776I)
31 August 2016 - 4:01PM
UK Regulatory
TIDMCAR
RNS Number : 4776I
Carclo plc
31 August 2016
31 August 2016
Carclo plc
("Carclo" or the "Group")
Update on trading and dividend
The Board is pleased to announce that the Group has continued to
trade well in the current financial year and the trading
performance remains in line with its expectations for the year
ending 31 March 2017.
Technical Plastics has had a very good start to the financial
year with demand from our healthcare customers as expected.
Following the award of additional production volume from a long
term Group customer, we have approved the expansion of our existing
Indian facility and expect this expansion to be completed by late
summer of 2017. Our strategies to win new programmes to fill the
expanded capacity at our new China facility are gaining traction,
with some initial programme wins secured in the first half of the
year.
In LED Technologies, our Wipac luxury and supercar lighting
business has performed well with good product demand and all of the
current design, development and tooling programmes are progressing
as planned. Wipac's new business wins and order pipeline have been
consistent with our targets. In addition, our Optics business has
seen strong demand in the first half of the financial year.
The Aerospace division has seen stable demand so far this year
and is expected to trade in line with our expectations.
We expect Group debt to be a little higher at 30 September 2016
than at 31 March 2016, primarily due to the impact of weaker
Sterling on the re-translation of our US dollar and Euro
denominated medium term loans. However, the Group has made modest
gains on trading and on the retranslation of overseas profits year
on year due to the weakness of Sterling.
Subsequent to the EU Referendum result on 23 June 2016,
corporate bond yields have decreased materially in the UK and, as
this yield is used to discount the Group's pension liability under
IAS 19 "Employee Benefits", if the corporate bond yield remains at
its current low level then this will result in a significant
increase in the Group's pension deficit as at 30 September 2016.
This likely increased IAS 19 pension deficit would have the effect
of extinguishing the Company's available distributable reserves, in
which case the Company will not be able to pay the final dividend
of 1.95 pence per share, declared on 7 June 2016, on 7 October 2016
to those members that were on the register at 26 August 2016.
Whilst the Board is disappointed that the final dividend is now
unlikely to be capable of being paid due to these legal and
accounting constraints, it intends to resume the Company's
progressive dividend policy once legal and accounting circumstances
allow.
The Board looks forward to a continuing positive trading
performance this financial year and to delivering good growth in
line with its expectations.
- ENDS -
Enquiries:
Carclo plc 01924 268040
Chris Malley, Chief
Executive
Robert Brooksbank,
Finance Director
Peel Hunt LLP 0207 418 8900
Justin Jones
Jock Maxwell Macdonald
Mike Bell
Weber Shandwick
Nick Oborne
Tom Jenkins 020 7067 0000
The information contained within this announcement is deemed by
the Company to constitute inside information stipulated under the
Market Abuse Regulation (EU) No. 596/2014. Upon the publication of
this announcement via the Regulatory Information Service, this
inside information is now considered to be in the public
domain.
Note to Editors
Carclo plc is a public company whose shares are quoted on the
London Stock Exchange.
Carclo's strategy is to develop and expand its key manufacturing
assets where there remain significant further opportunities to
drive value. To enhance profit margins and support customers the
Group has been investing in lower cost regions and new
technologies.
Approximately three fifths of Group revenues are derived from
the supply of fine tolerance, injection moulded plastic components,
mainly for medical products. The balance of revenue is derived
mainly from the design and supply of specialised injection moulded
LED based lighting systems to the low volume premium automotive
industry.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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