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Carclo shares slump on profit warning as Technical Plastics division falls short

The plastics maker said that three new medical programmes for the division had been delayed by its customers before entering production at the end of the period
Car headlight
In its LED division, the firm said its Wipac exterior car light arm had won new programmes

Carclo PLC (LON:CAR) saw its shares slump in lunchtime trading Friday after saying trading in its first half had been below expectations due to an “underperformance” in its Technical Plastics division.

The plastics maker said in a trading update that three new medical programmes for the division had been delayed by its customers before entering production at the end of the period.

READ: Carclo shares plunge as Consort Medical withdraws from offer process

Carclo added that an operational improvement programme in the Technical Plastics business had delivered “price increases, efficiency opportunities and cost savings” that would positively impact margins in the second half.

In its LED division, the firm said its Wipac exterior car light arm had won new programmes, including the nomination for two mid-volume electric vehicles, leading to a “healthy level” of design and development contract profits.

However, the launch of all its planned new vehicle production programmes meant manufacturing costs had been higher than expected, although margins were expected to improve in the second half as production accelerated.

The firm’s smaller Aerospace division had performed slightly ahead of expectations, mainly due to higher margins and tight cost controls.

Looking ahead, Carclo said its expectations for the full year remained unchanged, with results being weighted toward the second half of the year.

The firm’s interim results are to be announced on 13 November.

Shares were down 5.8% at 81p.

-- Updates share price --

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Carclo Timeline

May 16 2016

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