Half Yearly Report

RNS Number : 5068R
Carclo plc
20 November 2012
 



 

 

20 November 2012

Carclo plc

("Carclo" or "the group")

 

Half year results for the six months ended 30 September 2012

 

Carclo plc, the technology led plastics group, today announces a solid first half performance in line with the board's expectations.

 

 

Highlights

 

·       Conductive Inkjet Technology ("CIT") has made its first production shipment for touch sensors for a low volume smartphone and is in the final stages of production validation for a high volume tablet computer

 

·      Technical Plastics had lower turnover of £26.4 million (2011 - £28.3 million) as expected due to timing delays on the recognition of sub contract tooling revenues. Underlying operating profits reduced to £1.3 million (2011 - £1.9 million). The second half of the year is expected to be much stronger than the first half of this year

 

·      LED Technologies benefited from growth in its supercar lighting business and improved manufacturing efficiencies which together resulted in underlying operating profits improving to £0.9 million (2011 - £0.7 million). Turnover of £11.5 million (2011 - £16.3 million) was lower due to the exit from the automotive communication business in 2011

 

·       Precision Engineering had a strong first half generating underlying operating profits of £0.7 million (2011 - £0.6 million)

 

·      Carclo Diagnostic Solutions ("CDS") has continued to make good technical progress and there is now significant external interest in the formation of commercial partnerships to exploit this technology

 

·       July's equity placing raised £12.6 million for the group to use for investment in technology and debt reduction

 

·       Profit before tax of £1.9 million (2011 - £1.3 million)

 

·       Basic earnings per share increased to 2.3 pence (2011 - 1.6 pence)

 

·       Interim dividend increased to 0.80 pence per share (2011 - 0.75 pence)

 

Commenting on the results, Michael Derbyshire, chairman, said -

 

"Our businesses continue to win new contracts despite the uncertain global economic environment. We expect a stronger second half trading performance and our core operations remain on track to deliver a satisfactory year. Contract awards throughout our businesses, coupled with further capital investment in infrastructure and technology support our confidence in the future growth of the group.

 

We are now starting to see the first substantial rewards from the significant investment in CIT and anticipate a good maiden contribution from CIT's touchscreen business in the final quarter and rapid growth thereafter. Our CDS business has also made considerable progress and has attracted a high level of interest from a wide range of potential partners.

 

The balance sheet has been strengthened by the equity fund-raising and our financing is secure."

 



Enquiries

 

 

Carclo plc

020 7067 0700 (today)

Ian Williamson, chief executive

01924 268040 (thereafter)

Robert Brooksbank, finance director




Weber Shandwick Financial

020 7067 0700

Nick Oborne


Stephanie Badjonat


Robert Cook


 

 

A presentation for analysts will be held at 9.30 a.m. on 20 November 2012 at the offices of Weber Shandwick Financial, 2 Waterhouse Square, 140 Holborn, London EC1N 2AE.

 

 

Notes to editors

 

 

 

About Carclo

 

Carclo plc is a technology led plastics group. It is a public company whose shares are quoted on the London Stock Exchange.

 

Approximately three fifths of revenues are derived from the supply of fine tolerance, injection moulded plastic components, which are used in medical, optical and electronics products. This business, Carclo Technical Plastics, operates internationally in a fast growing and dynamic market underpinned by rapid technological development.

 

Approximately two fifths of revenues are derived from the supply of specialised precision components to the premium automotive and aerospace industries and LED optics for a wide range of end applications. Carclo is a leader in the development of high power LED lighting for supercars.

 

Carclo's strategy is to develop new technologies and products to drive future growth. Its investment in Conductive Inkjet Technology is at the heart of the newly emerging market for very low cost printed electronics.

 

 

 

Forward looking statements

 

Certain statements made in this announcement are forward looking statements. Such statements are based on current expectations and are subject to a number of risks and uncertainties that could cause actual events to differ materially from any expected future events or results referred to in these forward looking statements.

 

 

 

 

Chairman's statement

 

Overview                                                                              

 

Carclo has continued to trade in line with the board's expectations in the first half of the current financial year and the group is expected to generate a stronger second half performance . Conductive Inkjet Technology made the first production shipments for touch sensors in September and is in the final stages of production validation for a high volume tablet computer with volume shipments before the end of the calendar year that will trigger the $10.0 million prepayment from our commercial partner.

 

In our newly created LED Technologies division the benefits of withdrawing from the volume automotive communications market can be seen in increased margins with further growth in our supercar lighting business. In Precision Engineering our aerospace businesses continue to perform well. Technical Plastics continues to develop its strongposition in the medical diagnostics and electronics sectors. Carclo Diagnostic Solutions continues to make excellent technical and commercial progress.  

 

Underlying operating profits of £2.2 million were marginally down on the prior year with better performances by LED Technologies and Precision Engineering offsetting an expected reduction in operating profits in Technical Plastics.

 

The net finance charge of £0.3 million (2011 - net credit of £0.3 million) reflects the reduction in the net IAS 19 pensions financing credit.

 

The group generated a profit before tax in the six months to 30 September 2012 of £1.9 million (2011 - £1.3 million), with the better result largely due to the £1.2 million charge taken in 2011 in respect of the costs of exiting the volume automotive communication business offset by the reduction in the IAS 19 financing credit. Consequently, basic earnings per ordinary share increased by 43.8% to 2.3 pence.

 

Financial position

 

In July we completed an equity placing raising £12.6 million net of costs, and as a result net debt at 30 September was £11.4 million, well below the year-end net debt of £18.0 million and the net debt of £19.0 million a year ago. This represents gearing on assets (excluding the net pension deficit) of 15.2% (2011 - 31.3%). Cash generated from operations was £1.6 million (2011 - £4.9 million) with working capital increasing by £2.2 million (2011 - reduction of £1.0 million) reflecting the build-up of development and tooling work-in-progress. Capital expenditure in the six months to 30 September 2012 increased to £3.8 million (2011 - £1.9 million) as we invested in the new Cambridge facility for CIT and purchased the Technical Plastics facility in Bangalore. Investment in new technologies continued at a high level with £1.7 million (2011 - £1.0 million) invested in development costs at CIT and CDS.

 

As at 30 September 2012 the total drawings on the group's £20.0 million medium term loan facilities were £17.5 million. These committed facilities run until November 2015. The facilities are competitively priced in the current market, and the group has significant levels of headroom on its main banking covenants. The group also has available overdraft facilities totalling £11.5 million.

 

The board has declared an increased interim dividend of 0.80 pence per ordinary share. The dividend will be paid on 9 April 2013 to shareholders on the register on 1 March 2013. The shares will trade ex-dividend from 27 February 2013.

 

 

 

Operating review

 

Technical Plastics

 

Technical Plastics reported revenues of £26.4 million, down 6.7% on the same period last year. Operating profits, before rationalisation costs, reduced by £0.5 million to £1.3 million. This is mainly due to the timing of profit recognition on new customer funded tooling and development projects and consequently this situation is expected to reverse in the second half.

 

New business awards, both from existing and new customers, have been better than expected and this provides a driver for future growth in this business. In particular, we expect significant levels of growth to come from our US operations.

 

We have continued to invest to support the growth of our medical and electronics businesses and have brought forward the planned capacity expansion in the US to accommodate the new contract awards. This will involve a substantial redevelopment of our Latrobe facility in 2013. During the first half of the year we acquired the land and buildings occupied by our operations in Bangalore. This has provided the necessary footprint to service increasing manufacturing volumes today, and an ability to expand further as demand increases.

 

The effect of some customer specific weakness in schedules should be compensated by new business awards and the profit from development and tooling projects in the second half of the financial year.

 

LED Technologies

 

In this financial year we have formed an LED Technologies division to increase our focus on this growing market. This new division combines the LED Optics business previously reported within Technical Plastics and the Wipac supercar lighting business previously reported within Precision Products.

 

The LED Technologies division generated sales of £11.5 million and operating profits of £0.9 million. Sales in the prior year of £16.3 million and operating profits of £0.7 million are not directly comparable as they include Wipac's high volume automotive communication business which we withdrew from in March 2011. However, the improvement in profitability reflects the success of Wipac's LED based supercar lighting business coupled with the benefits of exiting the lower margin automotive communication business. Wipac has continued to win new supercar lighting programmes and these will generate significant design, development and tooling revenues over the next two years. The LED Optics business has benefited from the change in management and sales have started to increase in the latter part of the period.

 

Precision Engineering

 

The aerospace businesses showed good growth over the prior year with turnover of £4.0 million (2011 - £3.6 million) and operating profits of £0.7 million (2011 - £0.6 million). These businesses continue to achieve strong margins and cash generation.

 

Conductive Inkjet Technology ("CIT")

 

At CIT there has been an intense focus on the commercialisation of our Fine Line Technology for touch screen applications. The Cambridge pilot line achieved full production validation from our partner in early September, and the first production shipment for a low volume smartphone was achieved at the end of September. Further shipments are underway for this programme. We are in the final stages of production validation for a high volume tablet computer with a major tier 1 customer. A large pre-production batch is in build at the end customer and our schedules show volume shipments commencing before the end of the calendar year. The first production shipment on this programme will trigger the $10.0 million prepayment from our commercial partner.

 

This is a high volume programme and it will take most of the initial capacity on the Cambridge pilot line. The Colorado production line operated by our partner is expected to achieve full production validation before the end of the year which will immediately double available capacity. In a change of approach by our partner, the Cambridge and Colorado lines will be expanded in tandem. The capacity of the Cambridge line will be increased three-fold by April 2013.

 

Planning of the new production facility in Cambridge is well underway. The new high speed coating line will be operational early in the new financial year. A second high speed coating line (to be operated as a 'hot' second source by CIT) will be installed in Colorado soon after. This will increase the surge capacity on coated film to 1 billion 3.1" screen equivalents. Further equipment is on order to increase the finished sensor production capacity at Colorado through the balance of 2013.

 

Engagement with customers is at a high level which gives us confidence that our increasing capacity will be utilised in full. Technical progress throughout the year has enabled CIT touch sensors to have optical performance at least equivalent to Indium Tin Oxide ("ITO") and CIT expects to benefit from significant customer take-up due to its compelling technical advantages; which include edgeless borders, curved surfaces, greater linearity, thinner materials and in the case of larger screens, savings on component cost due to our greater electrical performance.

 

CIT's other core technologies have continued to progress well and CIT will soon be expanding its product offering within its Printed Electronics business with the addition of further capabilities which will facilitate a more rapid commercialisation of its unique interconnect technology. Our projects on electrodes for Organic Photovoltaics and Organic Lighting have continued and we expect these projects to complete successfully in 2013.

 

Carclo Diagnostic Solutions ("CDS")

 

Carclo Diagnostic Solutions was formed to retain and develop ownership of the patents related to the hardware developments made by Carclo in support of Platform Diagnostics Limited. We have continued to make excellent technical progress and have proof of concept devices for the three micropoc families - lite, cat and pro. We are well advanced in discussions with a commercial partner which will see micropoc products launched commercially towards the end of 2013. Further information on these developments will be released upon their completion.

 

Risks and uncertainties

 

In the annual report to shareholders in June 2012 we provided a detailed review of the risks faced by the group and how these risks are managed. We continue to face, and proactively manage, the risks and uncertainties in our business and there has been no significant change in the risks faced by the group.

 

Outlook

 

Our businesses continue to win new contracts despite the uncertain global economic environment. We expect a stronger second half trading performance and our core operations remain on track to deliver a satisfactory year. Contract awards throughout our businesses, coupled with further capital investment in infrastructure and technology, support our confidence in the future growth of the group.

 

We are now starting to see the first substantial rewards from the significant investment in CIT and anticipate a good maiden contribution from CIT's touchscreen business in the final quarter and rapid growth thereafter. Our CDS business has also made considerable progress and has attracted a high level of interest from a wide range of potential partners.

 

The balance sheet has been strengthened by the equity fund-raising and our financing is secure.

 

Michael Derbyshire

Chairman

 

 

 

 

 

Condensed consolidated income statement 

 

 


Six months ended

30 September

 2012

unaudited

Six months ended

30 September 2011

 unaudited


Year ended

 31 March

2012

audited


Notes

£000


£000


£000

 

Revenue

 

4

 

40,030


 

46,997


 

93,267

Underlying operating profit







 

Operating profit before exceptional items


2,201


2,280


6,645

     - rationalisation costs

5

 -


(155)


(528)

     - exit of Ford volume automotive communication business

5

-


(1,180)


(1,560)

     - exceptional credit in respect of retirement benefits


-


-


300








After exceptional items


2,201


945


4,857








Operating profit

4

2,201


945


4,857








Finance revenue

6

4,179


4,932


9,855

Finance expense

6

(4,477)


(4,597)


(9,214)








Profit before tax


1,903


1,280


5,498








Income tax expense

7

(419)


(269)


(856)








Profit after tax but before loss on discontinued operations

1,484


1,011


4,642








Loss on discontinued operations, net of tax

8

(14)


(26)


(19)








Profit after tax

1,470


985


4,623








Attributable to -














Equity holders of the parent


1,471


985


4,637

Non-controlling interests


(1)


-


(14)



1,470


985


4,623















Earnings per ordinary share

9






   Basic - continuing operations


2.3 p


1.6 p


7.5 p

   Basic - discontinued operations


0.0 p


0.0 p


0.0 p








   Basic - total


2.3 p


1.6 p


7.5 p








   Diluted - continuing operations


2.3 p


1.6 p


7.5 p

   Diluted - discontinued operations


0.0 p


0.0 p


0.0 p








   Diluted - total


2.3 p


1.6 p


7.5 p

 

 

 

Condensed consolidated statement of comprehensive income

 


Six months ended

30 September

2012

unaudited

Six months ended

30 September

2011

unaudited


Year ended

31 March

2012

audited

             £000


   £000


          £000







Profit for the period

1,470


985


4,623







Other comprehensive income -






Foreign exchange translation differences

(845)


151


(546)

Actuarial losses on defined benefit scheme

(1,750)


(12,975)


(16,700)

Taxation on items taken directly to equity

450


3,244


3,459







Other comprehensive income, net of income tax

(2,145)


(9,580)


(13,787)







Total comprehensive income for the period

(675)


(8,595)


(9,164)







Attributable to -












Equity holders of the parent

(674)


(8,595)


(9,150)

Non-controlling interests

(1)


-


(14)


(675)


(8,595)


(9,164)













 

 

 

Condensed consolidated statement of financial position

 


 

30 September

2012

unaudited


 

30 September

2011

unaudited


 

31 March

2012

audited


Notes

             £000


   £000


          £000

Assets


Intangible assets

11

41,853


37,180


40,827

Property, plant and equipment

12

29,929


29,328


27,983

Investments


6


1,002


6

Deferred tax assets


11,266


9,878


10,818








Total non current assets


83,054


77,388


79,634








Inventories


12,244


12,140


11,704

Trade and other receivables


17,110


17,638


16,754

Cash and cash deposits

                      

10,610


8,491


9,485

Non current assets classified as held for sale

13

350


215


350








Total current assets


40,314


38,484


38,293








Total assets


123,368


115,872


117,927








Liabilities







Interest bearing loans and borrowings

17,539


-


19,135

Deferred tax liabilities


5,948


5,139


5,922

Retirement benefit obligations

14

24,055


21,186


22,597







Total non current liabilities

47,542


26,325


47,654







Trade and other payables

12,955


15,092


14,335

Current tax liabilities

2,138


1,910


2,208

Provisions

-


200


130

Interest bearing loans and borrowings

4,441


27,468


8,326







Total current liabilities

19,534


44,670


24,999







Total liabilities

67,076


70,995


72,653







Net assets

56,292


44,877


45,274













Equity






    Ordinary share capital issued

18

3,245


3,089


3,090

    Share premium


20,807


8,668


8,296

    Other reserves


3,584


3,584


3,584

    Translation reserve


3,343


4,885


4,188

   Retained earnings


24,206


24,651


25,008








Total equity attributable to equity holders of the parent

55,185


44,877


44,166

Non-controlling interests

1,107


-


1,108

Total equity

56,292


44,877


45,274







 

 

 

Condensed consolidated statement of changes in equity

 

 

Attributable to equity holders of the company

















Non-



Share

Share

Translation

Other

Retained


controlling

Total


capital

premium

reserve

reserves

earnings

Total

interests

equity


£000

£000

£000

£000

£000

£000

£000

£000

Current half year period - unaudited

 









Balance at 1 April 2012

3,090

8,296

4,188

3,584

25,008

44,166

1,108

45,274










Profit for the period

-

-

-

-

1,471

1,471

(1)

1,470










Other comprehensive income -









Foreign exchange translation differences

-

-

(845)

-

-

(845)

-

(845)

Actuarial losses on defined benefit scheme

-

-

-

-

(1,750)

(1,750)

-

(1,750)

Taxation on items above

-

-

-

-

450

450

-

450

Transactions with owners recorded directly in equity -









Share based payments

-

-

-

-

91

91

-

91

Dividends to shareholders

-

-

-

-

(1,070)

(1,070)

-

(1,070)

Exercise of share options

1

19

-

-

-

20

-

20

Issue of shares net of costs

154

12,492

-

-

-

12,646

-

12,646

Proceeds from sale of own shares

-

-

-

-

6

6

-

6

Balance at 30 September 2012

3,245

20,807

3,343

3,584

24,206

55,185

1,107

56,292










Prior half year period - unaudited









Balance at 1 April 2011

3,078

8,189

4,734

3,584

34,746

54,331

-

54,331










Profit for the period

-

-

-

-

985

985

-

985










Other comprehensive income -









Foreign exchange translation differences

-

-

151

-

-

151

-

151

Actuarial losses on defined benefit scheme

-

-

-

-

(12,975)

(12,975)

-

(12,975)

Taxation on items above

-

-

-

-

3,244

3,244

-

3,244

Transactions with owners recorded directly in equity -









Share based payments

-

-

-

-

89

89

-

89

Dividends to shareholders

-

-

-

-

(926)

(926)

-

(926)

Exercise of share options

11

479

-

-

-

490

-

490

Proceeds from sale of own shares

-

-

-

-

19

19

-

19

Performance share plan awards

-

-

-

-

(531)

(531)

-

(531)

Balance at 30 September 2011

3,089

8,668

4,885

3,584

24,651

44,877

-

44,877










Prior year period - audited


















Balance at 1 April 2011

3,078

8,189

4,734

3,584

34,746

54,331

-

54,331









-

Profit for the period

-

-

-

-

4,637

4,637

(14)

4,623










Other comprehensive income -









Foreign exchange translation differences

-

-

(546)

-

-

(546)

-

(546)

Actuarial losses on defined benefit scheme

-

-

-

-

(16,700)

(16,700)

-

(16,700)

Taxation on items above to equity

-

-

-

-

3,459

3,459

-

3,459

Transactions with owners recorded directly in equity -









Share based payments

-

-

-

-

183

183

-

183

Dividends to shareholders

-

-

-

-

(1,390)

(1,390)

-

(1,390)

Exercise of share options

3

41

-

-

-

44

-

44

Proceeds from sale of own shares

-

-

-

-

19

19

-

19

Performance share plan awards

9

66

-

-

(187)

(112)

-

(112)

Acquisition of subsidiary with non-controlling interests

-

-

-

-

-

-

1,122

1,122

Taxation on items recorded directly in equity

-

-

-

-

241

241

-

241










Balance at 31 March 2012

3,090

8,296

4,188

3,584

25,008

44,166

1,108

45,274

 

 

 

Condensed consolidated statement of cash flows

 


Six months ended

30 September

2012

unaudited

Six months ended

30 September

2011

unaudited


Year ended

31 March

2012

audited


Notes

£000

£000


£000

Cash generated from operations

15

1,578


4,864


10,417







Interest paid

(430)


(315)


(620)

Tax paid

(460)


(301)


(734)







Net cash from operating activities

688


4,248


9,063







Cash flows from investing activities






Proceeds from sale of property, plant and equipment

36


46


405

Interest received

11


11


13

Cash flows on discontinued operations

(14)


(26)


(70)

Acquisition of business undertaking, net of cash acquired


-


-


(239)

Acquisition of property, plant and equipment


(3,833)


(1,857)


(4,120)

Acquisition of intangible assets - computer software

(21)


(9)


(66)

Investment in Platform Diagnostics Limited, whilst an associate

-


(12)


(250)

Development expenditure

(1,671)


(987)


(2,567)







Net cash from investing activities

(5,492)


(2,834)


(6,894)







Cash flows from financing activities






Proceeds from issue of share capital net of costs

12,646


-


-

Proceeds from exercise of share options

20


490


44

Proceeds from sale of own shares

6


19


19

Drawings on term loan facilities

350


-


500

Repayment of borrowings

(1,600)


-


-

Cash outflow in respect of performance share plan awards

-


(531)


(112)

Dividends paid

(1,533)


(1,358)


(1,358)







Net cash from financing activities

9,889


(1,380)


(907)







Net increase in cash and cash equivalents

5,085


34


1,262

Cash and cash equivalents at beginning of period

1,159


(100)


(100)

Effect of exchange rate fluctuations on cash held

(75)


103


(3)








Cash and cash equivalents at end of period

16

6,169


37


1,159







 

 

 

Notes on the accounts

 

 

1.       Basis of preparation

 

The condensed consolidated half year report for Carclo plc ("Carclo" or "the group") for the six months ended 30 September 2012 has been prepared on the basis of the accounting policies set out in the audited accounts for the year ended 31 March 2012 and in accordance with the Disclosure and Transparency Rules of the UK Financial Services Authority and the requirements of IAS 34 "Interim Financial Reporting" as adopted by the EU.

 

The financial information is unaudited, but has been reviewed by the auditors and their report to the company is set out on page 21.

 

The half year report does not constitute financial statements and does not include all of the information and disclosures required for full annual statements. It should be read in conjunction with the annual report and financial statements for the year ended 31 March 2012 which is available either on request from the company's registered office, Springstone House, PO Box 88, 27 Dewsbury Road, Ossett, WF5 9WS, or can be downloaded from the corporate website - www.carclo-plc.com

 

The comparative figures for the financial year ended 31 March 2012 are not the company's statutory accounts for that financial year.  Those accounts have been reported on by the company's auditors and delivered to the Registrar of Companies.  The report of the auditors was (i) unqualified, (ii) did not include a reference to any matters which the auditors drew attention by way of emphasis without qualifying their report and (iii) did not contain statements under Section 498 (2) of the Companies Act 2006.

 

The half year report was approved by the board of directors on 20 November 2012 and is being sent to shareholders on 30 November 2012.  Copies are available from the company's registered office and can also be downloaded from the corporate website. 

 

The group financial statements have been prepared and approved by the directors in accordance with International Financial Reporting Standards as adopted by the EU ("Adopted IFRSs"). 

 

The group meets its day-to-day working capital requirements through its banking facilities. The group's business activities and financial position, the factors likely to affect its future development and performance, and its objectives and policies in managing financial risks to which it is exposed are disclosed in the group's 2012 Annual Report and Accounts. After making enquiries, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. The group therefore continues to adopt the going concern basis in preparing its condensed interim financial statements.

 

2.       Accounting policies

 

The accounting policies, methods of computation and presentation applied by the group in this condensed consolidated half year report are the same as those applied by the group in its annual report and financial statements for the year ended 31 March 2012.

 

There have been no new standards, amendments or interpretations that have impacted Carclo during the current financial year.

 

 

3.       Accounting estimates

 

The preparation of the half year financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses. In preparing these half year financial statements, the significant judgements made by management in applying the group's accounting policies and the key source of estimation uncertainty were the same as those applied to the audited consolidated financial statements as at, and for the year ended, 31 March 2012.

 

 

4.       Segment reporting

 

At 30 September 2012, the group was organised into four, separately managed, business segments - Technical Plastics, LED Technologies, Precision Engineering and Conductive Inkjet Technology.  These are the segments for which summarised management information is presented to the group's chief operating decision maker (comprising the main board and general executive committee).

 

Formerly the group reported three business segments, Technical Plastics, Precision Products and Conductive Inkjet Technology. Following the combination of the LED optics business previously contained within Technical Plastics and the Wipac supercar lighting business previously contained within Precision Products to form LED Technologies, the directors receive and report results over the four segments detailed above. Consequently the group has restated the previous segmental reporting to provide comparatives under the new segmentation.

 

The Technical Plastics segment supplies fine tolerance, injection moulded plastic components, which are used in medical, optical and electronics products.  This business operates internationally in a fast growing and dynamic market underpinned by rapid technological development.

 

The LED Technologies segment develops innovative solutions in LED lighting, and is a leader in the development of high power LED lighting for supercars.

 

The Precision Engineering segment supplies systems to the manufacturing and aerospace industries

 

The Conductive Inkjet Technology segment undertakes applied research into the digital printing of conductive metals onto plastic substrates.

 

Transfer pricing between business segments is set on an arm's length basis. Segmental revenues and results include transfers between business segments. Those transfers are eliminated on consolidation.

 

The segment results for the six months ended 30 September 2012 were as follows -

 


Technical  Plastics

LED

Technologies

Precision Engineering

Conductive Inkjet Technology

Unallocated

Eliminations

Group total


£000

£000

£000

£000

£000

£000

£000









Consolidated income statement
















Total revenue

26,430

11,540

4,024

267

-

(2,231)

40,030

Less inter-segment revenue

(2,231)

-

-

-

-

2,231

-









Total external revenue

24,199

11,540

4,024

267

-

-

40,030









Expenses

(22,852)

(10,673)

(3,345)

(281)

(678)

-

(37,829)









Underlying operating profit

1,347

867

679

(14)

(678)

-

2,201









Rationalisation costs

-

-

-

-

-

-

-









 Operating profit

1,347

867

679

(14)

(678)

-

2,201









Net finance charge







(298)

Income tax expense







(419)

Loss on discontinued operations, net of tax







(14)









Profit after tax





1,470









Consolidated statement of financial position
















 Segment assets

62,459

17,034

6,274

22,058

15,543

-

123,368

 Segment liabilities

(13,122)

(3,550)

(1,410)

(837)

(48,157)

-

(67,076)









Net assets

49,337

4,864

21,221

(32,614)

-

56,292









 

 

The segment results for the six months ended 30 September 2011 following restatement as a result of a change in operating segments in the period were as follows -

 


Technical  Plastics

LED

Technologies

Precision Engineering

Conductive Inkjet Technology

Unallocated

Eliminations

Group total


£000

£000

£000

£000

£000

£000

£000









Consolidated income statement
















Total revenue

28,327

16,275

3,551

37

-

(1,193)

46,997

Less inter-segment revenue

(1,193)

-

-

-

-

1,193

-









Total external revenue

27,134

16,275

3,551

37

-

-

46,997









Expenses

(25,248)

(15,593)

(2,999)

(182)

(695)

-

(44,717)









Underlying operating profit

1,886

682

552

(145)

(695)

-

2,280









Rationalisation costs

(100)

(24)

-

-

(31)

-

(155)

Exit of Ford volume automotive     communication  business

-

(1,180)

-

-

-

-

(1,180)









   Operating profit

1,786

(522)

552

(145)

(726)

-

945









   Net finance income







335

   Income tax expense







(269)

   Loss on discontinued operations, net of tax







(26)









   Profit after tax







985









Consolidated statement of financial position















   Segment assets

58,793

19,658

6,642

18,471

12,308

-

115,872

   Segment liabilities

(8,411)

(6,527)

(2,011)

(2,099)

  (51,947)

-

(70,995)









   Net assets

50,382

13,131

4,631

16,372

(39,639)

-

44,877









 

 

The segment results for the year ended 31 March 2012 following restatement as a result of a change in operating segments in the period were as follows -

 

 


Technical  Plastics

LED

Technologies

Precision Engineering

Conductive Inkjet Technology

Unallocated

Eliminations

Group total


£000

£000

£000

£000

£000

£000

£000









Consolidated income statement
















Total revenue

57,696

30,907

7,516

296

-

(3,148)

93,267

Less inter-segment revenue

(3,148)

-

-

-

-

3,148

-









Total external revenue

54,548

30,907

7,516

296

-

-

93,267









Expenses

(49,906)

(28,739)

(6,310)

(493)

(1,174)

-

(86,622)









Underlying operating profit

4,642

2,168

1,206

(197)

(1,174)

-

6,645









Rationalisation costs

(326)

(159)

-

-

(43)

-

(528)

Exit of Ford volume automotive     communication business

-

(1,560)

-

-

-

-

(1,560)

Exceptional credit in respect of retirement benefits

-

-

-

-

300

-

300









   Operating profit

4,316

449

1,206

(197)

(917)

-

4,857









   Net finance income







641

   Income tax expense







(856)

   Loss on discontinued operations, net of tax







(19)









   Profit after tax







4,623









Consolidated statement of financial position















   Segment assets

57,992

17,327

7,177

19,416

16,015

-

117,927

   Segment liabilities

(9,448)

(4,105)

(2,175)

(742)

(56,183)

-

(72,653)









   Net assets

48,544

13,222

5,002

18,674

(40,168)

-

45,274

 

 

5.          Rationalisation costs

 


Six months ended

30 September

2012

Six months ended

30 September

2011

Year ended

31 March

2012

 


£000


£000


£000

 







 

Redundancy costs

-


(124)


(342)

 

Other operating expenses

-


(31)


(186)

 


-


(155)


(528)

 

Exit of Ford volume automotive communication business

-


(1,180)


(1,560)

 







 

Total

-


(1,335)


(2,088)

 







 

 

All rationalisation costs relate to the group's UK operations

 

 




 

 

6.         Net finance (charge) / income

 


Six months ended

30 September

2012

Six months ended

30 September

2011

Year ended

31 March

2012


            £000


   £000


         £000







Finance revenue

11


11


13

Finance expense

(352)


(315)


(651)

Other finance revenue - retirement benefits

4,168


4,921


9,842

Other finance expense - retirement benefits

(4,125)


(4,282)


(8,563)







Total

(298)


335


641

 

 

7.         Income tax expense

 

The half year accounts include a tax charge of 22.0% of profit before tax (2011 - 21.0%) based on the estimated average effective income tax rate for the full year. The group's effective tax rate continues to run at a lower level than the underlying UK tax rate of 24.0% (2011 - 26.0%) as the group continues to benefit from previously unrecognised prior period tax losses and tax planning initiatives. 

 

 

 

8.         Loss on discontinued operations, net of tax

 


Six months ended

30 September

2012

Six months ended

30 September

2011

Year ended

31 March

2012


£000


£000


£000







Costs incurred in relation to non current assets held for sale

-


(26)


(70)

(Loss) / profit on disposal of surplus property

(14)


-


51







Total

(14)


(32)


(19)

 

 

9.         Earnings per share

 

The calculation of basic earnings per share is based on the profit attributable to ordinary shareholders of the company divided by the weighted average number of ordinary shares outstanding during the period.

 

The calculation of diluted earnings per share is based on profit attributable to ordinary shareholders of the company divided by the weighted average number of ordinary shares outstanding during the period (adjusted for dilutive options).

 

The following details the profit and average number of shares used in calculating the basic and diluted earnings per share -

 

Six months ended

Six months ended


Year ended

30 September

30 September


31 March


2012


2011


2012


£000


£000


£000







Profit after tax from continuing operations

1,484


1,011


4,642







Loss attributable to non-controlling interests

1


-


14







Profit attributable to ordinary shareholders from continuing operations

1,485


1,011


4,656







Loss on discontinued operations net of tax

(14)


(26)


(19)







Profit after tax attributable to ordinary shareholders of the parent

1,471


985


4,637







Six months ended

Six months ended


Year ended

30 September

30 September


31 March


2012


2011


2012


Shares


Shares


Shares







Weighted average number of ordinary shares in issue in the period

63,199,731


61,649,931


61,715,997







Effect of share options in issue

343,839


315,035


336,894







Weighted average number of ordinary shares (diluted) in the period

63,543,570


61,964,966


62,052,891

 

The following table summarises the earnings per share figures based on the above data -

 

Six months ended

Six months ended


Year ended

30 September

30 September


31 March


2012


2011


2012


Pence


Pence


Pence







Basic - continuing operations

2.3


1.6


7.5

Basic - discontinued operations

-


-


-







Basic - total

2.3


1.6


7.5







Diluted - continuing operations

2.3


1.6


7.5

Diluted - discontinued operations

-


-


-







Diluted - total

2.3


1.6


7.5

 

 

10.       Dividends paid and proposed

 

 Ordinary dividends per 5 pence share declared in the period comprised -

 

Six months ended

Six months ended

Year ended

30 September

30 September


31 March


2012


2011


2012


£000


£000


£000







Final dividend for 2010/11 (1.50 pence per share)

-


926


926

Interim dividend for 2011/12 (0.75 pence per share)

-


-


464

Final dividend for 2011/12 (1.65 pence per share)

1,071


-


-








1,071


926


1,390

 

The directors are proposing an interim dividend of 0.80 pence per ordinary share for the half year ended 30 September 2012. The dividend payment totalling £0.519 million will be paid on 9 April 2013 to shareholders on the share register at close of business on 1 March 2013.  The proposed dividend has not been provided in the half year accounts.

 

 

11.       Intangible assets

 

The movements in the carrying value of intangible assets are summarised as follows -

 

Six months ended

Six months ended

Year ended

30 September

30 September


31 March


2012


2011


2012


£000


£000


£000







Net book value at the start of the period

40,827


36,406


36,406







Additions

1,692


996


2,632

Acquired through business combinations

-


-


2,649

Amortisation

(181)


(199)


(395)

Effect of movements in foreign exchange

(485)


(23)


(465)







Net book value at the end of the period

41,853


37,180


40,827

 

 

Included within intangible assets is goodwill of £20.9 million (2011 - £21.2 million). The carrying value of goodwill is subject to annual impairment tests by reviewing detailed projections of the recoverable amounts from the underlying cash generating units. At 31 March 2012, the carrying value of goodwill was supported by such value in use calculations. There has been no indication of subsequent impairment in the current financial year.

 

 

12.       Property, plant and equipment

 

The movements in the carrying value of property, plant and equipment are summarised as follows -

 

Six months ended

Six months ended

Year ended

30 September

30 September


31 March


2012


2011


2012


£000


£000


£000







Net book value at the start of the period

27,983


29,950


29,950







Additions

3,951


2,033


3,734

Depreciation

(1,708)


(1,707)


(3,321)

Disposals

-


(23)


(41)

Transfer to non current assets held for sale

-


-


(350)

Impairment arising on site rationalisation

-


(980)


(1,701)

Effect of movements in foreign exchange

(297)


55


(288)







Net book value at the end of the period

29,929


29,328


27,983

 

 

13.      Non current assets classified as held for sale

 

As at

As at

As at

30 September

30 September


31 March


2012


2011


2012


£000


£000


£000







Surplus land and buildings

-


215


-

Plant and equipment held for sale

350


-


350







Net book value at the end of the period

350


215


350

 

At 30 September 2012, surplus machinery with a net book value of £0.350 million has been reclassified as held for sale. This machinery, which relates to the assets held in respect of the exit from the Ford volume automotive communication business, continues to be actively marketed.

 

14.       Retirement benefit obligations

 

At 31 March 2012, the group had a retirement benefit liability, as calculated under the provisions of IAS 19  "Employee Benefits", of £22.597 million. Since the start of the current financial year, equity markets have risen which has resulted in the scheme's assets increasing in value by £5.153 million to £155.317 million. However, a reduction in the discount rate used to evaluate the scheme's liabilities, from 4.9% at the start of the period to 4.3%, has resulted in the value of the liabilities increasing by £6.611 million to £179.372 million. As a consequence the scheme deficit, on an IAS 19 basis, has increased from £22.597 million at 31 March 2012 to £24.055 million at 30 September 2012.

 

 

15.       Cash generated from operations

 


Six months ended

Six months ended


Year ended


30 September

30 September


31 March



2012


2011


2012



£000


£000


£000








Operating profit


2,201


945


4,857








Adjustments for -







Pension fund contributions in excess of service costs


(249)


(217)


(1,591)

Depreciation charge


1,708


1,707


3,321

Amortisation of intangible assets


181


199


395

Share of losses in associated company


-


7


13

Exceptional tangible fixed asset write down, arising on rationalisation of business


-


1,180


1,701

Provision for site closure


(130)


-


130

Profit on business disposal


-


-


(2)

Profit on disposal of other plant and equipment


(36)


(23)


(30)

Exceptional credit in respect of retirement benefits


-


-


(300)

Share based payment charge


91


89


183








Operating cash flow before changes in working capital


3,766


3,887


8,677








Changes in working capital











(Increase) / decrease in inventories


(658)


269


572

(Increase) / decrease in trade and other receivables


(515)


1,192


1,939

Decrease in trade and other payables

(1,015)


(484)


(771)








Cash generated from operations


1,578


4,864


10,417

 

 

16.       Cash and cash equivalents

 



As at


As at


As at


30 September

30 September


31 March



2012


2011


2012



£000


£000


£000








Cash and cash deposits


10,610


8,491


9,485

Bank overdrafts


(4,441)


(8,454)


(8,326)










6,169


37


1,159

 

 

17.       Net debt

 

The net movement in cash and cash equivalents can be reconciled to the change in net debt in the period as follows -

 


Six months ended

Six months ended


Year ended


30 September

30 September


31 March



2012


2011


2012



£000


£000


£000








Net increase in cash and cash equivalents

5,085


34


1,262

Net repayments of term loan borrowings

1,250


-


-










6,335


34


1,262








Effect of exchange rate fluctuations on net debt


271


91


(136)










6,606


125


1,126








Net debt at start of period


(17,976)


(19,102)


(19,102)








Net debt at end of period


(11,370)


(18,977)


(17,976)

 

 

18.       Ordinary share capital

 

Ordinary shares of 5 pence each -




Number of shares


£000








Authorised at 30 September 2011, 31 March 2012 and 30 September 2012


80,000,000


4,000






Issued and fully paid at 31 March 2011


61,561,702


3,078

Shares issued on exercise of share options


221,500


11






Issued and fully paid at 30 September 2011


61,783,202


3,089






Shares issued on exercise of share options


13,500


1






Issued and fully paid at 31 March 2012


61,796,702


3,090






Shares issued on placing of shares for cash


3,078,240


154

Shares issued on exercise of share options


23,500


1






Issued and fully paid at 30 September 2012


64,898,442


3,245








 

On 9 July 2012, Carclo issued 3,078,240 new shares for cash at a price of 431.0 pence per share. The share placing raised £12.646 million after associated costs. The shares are fully paid.

 

In the six months ended 30 September 2012, options over 23,500 ordinary shares were exercised at an average exercise price of 83.7 pence per share. The shares are fully paid.

 

 

19.       Related parties

 

Identity of related parties

The group has a related party relationship with its subsidiaries, its directors and executive officers and the group pension schemes.

 

Transactions with key management personnel

Full details of directors' remuneration are disclosed in the group's annual report.  In the six months ended 30 September 2012, the directors' remuneration amounted to £0.323 million (2011 - £0.263 million).

 

Ian Williamson is a non executive director of Suprajit Engineering Limited ("Suprajit"), a manufacturer of automotive components based in Bangalore, India. Suprajit has provided assistance in the establishment of Carclo's Technical Plastics facility in India including the lease of a manufacturing and storage facility in Bangalore. Payments totalling £0.004 million have been made to Suprajit for these services in the six months to 30 September 2012 (2011 - £0.023 million). Additionally during the period the group paid £0.804 million to purchase the freehold land and buildings of said manufacturing and storage facility.

 

Group pension scheme

Carclo manages a pensions department which administers the group pension scheme. The associated investment costs are recharged to the schemes in full. The costs in the six months ended 30 September 2012 amounted to £0.198 million (2011 - £0.196 million). From 1 April 2007, it has been agreed with the trustees of the pension scheme that, under the terms of the recovery plan, Carclo would bear the scheme's administration costs whilst ever the scheme was in deficit, as calculated at the triennial valuation. Carclo incurred an administration cost of £0.233 million which has been charged against the IAS 19 pension scheme deficit (2011 - £0.217 million).

 

 

20.      Post balance sheet events

 

In October 2012, the group injected £0.980 million in cash into the group pension scheme in accordance with the agreed funding plan.

 

21.      Seasonality

 

There are no specific seasonal factors which impact on the demand for products and services supplied by the group, other than for the timing of holidays and customer shutdowns. These tend to fall predominantly in the first half of Carclo's financial year and, as a result, revenues and profits are usually higher in the second half of the financial year compared to the first half.

 

22.       Responsibility statement

 

We confirm that to the best of our knowledge -

 

•        the condensed set of financial statements has been prepared in accordance with IAS 34 "Interim Financial Reporting" as adopted by the EU;

 

•        the interim management report includes a fair review of the information required by -

 

(a)     DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and

 

(b)     DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could do so.

 

By order of the board

 

Ian Williamson - chief executive

Robert Brooksbank - finance director

 

20 November 2012

 

 

 

 

Independent review report to Carclo plc

 

 

Introduction

 

We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 September 2012 which comprises the condensed consolidated income statement, the condensed consolidated statement of comprehensive income, the condensed consolidated statement of financial position, the condensed consolidated statement of changes in equity, the condensed consolidated statement of cash flows and the related explanatory notes. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

 

This report is made solely to the company in accordance with the terms of our engagement to assist the company in meeting the requirements of the Disclosure and Transparency Rules ("the DTR") of the UK's Financial Services Authority ("the UK FSA"). Our review has been undertaken so that we might state to the company those matters we are required to state to it in this report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company for our review work, for this report, or for the conclusions we have reached.

 

Directors' responsibilities

 

The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the DTR of the UK FSA.

 

The annual financial statements of the group are prepared in accordance with IFRSs as adopted by the EU. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU.

 

Our responsibility

 

Our responsibility is to express to the company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.

 

Scope of review

 

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by the Auditing Practices Board for use in the UK. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

 

Conclusion

 

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 September 2012 is not prepared, in all material respects, in accordance with IAS 34 as adopted by the EU and the DTR of the UK FSA.

 

 

Mike Barradell

Audit director

For and on behalf of KPMG Audit Plc

Leeds

 

20 November 2012

 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
IR GGGUAGUPPGRB

Companies

Carclo (CAR)
UK 100

Latest directors dealings