Carclo finds stability after its exit from loss-making division
THE YORKSHIRE-BASED plastics firm Carclo said it had developed a more stable platform over the last year after it decided to exit a loss-making business and gained support from its lending bank.
Carclo’s revenue from continuing operations increased by 4.9 per cent to £110.5m in the year ended March 31, 2020.
Underlying operating profit from continuing operations increased by £0.9m to £7.3m.
The statutory operating profit from continuing operations was £1.8m with statutory loss before tax from continuing operations being £0.5m.
Over the year, the business successfully concluded the exit of the loss-making LED division and reduced its net debt and the pension deficit by £5.5m and £3.5m respectively.
Carclo also concluded a new three-year funding arrangement with the company’s main creditors, HSBC and the pension scheme, to secure their continued support through to July 2023.
Commenting on the results, Joe Oatley, the company’s chairman, said: “Despite a challenging period for the group, the continuing businesses performed strongly in 2020.
“Following the exit of the lossmaking LED business and the completion of a three-year refinancing agreement with the group’s lending bank and pension trustees, Carclo now has a more stable platform from which to develop the business.
“Whilst the Covid-19 situation creates some uncertainty over the near-term performance of the group, the board believes that the operating businesses within the group have attractive long-term growth prospects, in particular within the medical diagnostics market where the CTP business is well positioned.”
Mr Oatley added: “Alongside investing to deliver its organic growth strategy, the group is working closely with its pension trustees to reduce the relative scale of the group’s defined benefit pension deficit.
“Delivering a reduction in the pension deficit over time will be a key element in translating the performance of the underlying business into value creation for shareholders.”