Full Year Trading Statement and COVID-19 Update
Carclo plc
("Carclo" or "the Group" or "the Company")
Full Year Trading Statement and COVID-19 Update
Trading update for the year ended 31 March 2020 ("FY2020")
The Board is pleased to announce that trading for the continuing businesses during the second half of FY2020 reflected a continuation of the positive momentum seen in the first half of the year. Consequently, the Board expects to report, subject to audit, underlying results for the continuing businesses for FY2020 in line with its expectations.
The Technical Plastics Division performed strongly for the year as a whole, largely driven by increased volume as the business continued to secure a number of new programmes in its core medical market. The Aerospace Division also performed well, driven by increased volumes of spares orders and customers building inventory ahead of the UK's exit from the EU.
As previously announced, the Group successfully completed the exit from the loss-making businesses of the LED Division in December 2019.
The Group's net debt (including IFRS16 leases and subject to audit) at 31 March 2020 was £25.8m, (30 September 2019: £31.7m).
Impact of COVID-19
Whilst the initial outbreak of COVID-19 had limited impact on trading in final quarter of FY2020, disruption has been more extensive in the first quarter of the current financial year. During this period, the Group's primary focus has been to ensure the wellbeing of staff and the continued safe operation of its businesses. All applicable government advice has been followed across the different countries in which the Group operates. Pleasingly, it has been possible to keep most sites operational through the lockdown period, enabling the Group to continue to serve its customers many of whom operate in essential industries, particularly the medical diagnostic sector.
Given the division's focus on the medical market, overall demand across the Technical Plastics business has remained relatively resilient, with a number of its products being used directly in COVID-19 testing applications. Notwithstanding continued demand, the implementation of governmental guidance on social distancing and some limited shutdowns have impacted efficiency and throughput across the Group, which will inevitably have a negative impact on profitability.
Demand for the Aerospace business has been significantly impacted by the downturn in the aerospace sector.
Management has already taken action to mitigate these challenges, including accessing government support programmes where available and a reduction in variable costs where appropriate. The Board has taken a 20% cut in fees and salaries for the first quarter of the new financial year. The Group remains focused on ensuring operational continuity where it can; however, it remains very difficult to predict how the ongoing crisis will affect performance going forward.
Outlook
Given the current levels of uncertainty it is not possible for the Board to provide near-term guidance on expected financial performance. As previously reported, discussions continue with the Group's lending bank and pension trustees in order to agree a long-term financing position for Carclo. Whilst these negotiations remain ongoing, there can be no certainty that a satisfactory and affordable agreement will be reached. The Group will make further announcements as appropriate.
Timing of full year results
Mindful of the ongoing uncertainty presented by the COVID-19 situation, and the guidance from the Financial Conduct Authority that public companies should consider delaying preliminary announcements, the Board has decided to delay the publication of the Company's Full Year Results for the year ended 31 March 2020 beyond 30 June 2020, the date on which Carclo had previously expected to announce. The revised publication date will be published in due course.
Rights attaching to listed equity shares
In compliance with Listing Rule 9.2.6ER(1), the Company has forwarded to the FCA for publication a copy of its Articles of Association, which is the document that sets out the terms and conditions on which its listed equity shares were issued.
A copy of the Articles of Association have been submitted to the National Storage Mechanism and will shortly be available for inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism .
About Carclo plc
Carclo plc is a public company whose shares are quoted on the Main Market of the London Stock Exchange. The Group is a global provider of value-adding engineered solutions for the medical, optical and aerospace industries.
Enquiries:
Carclo plc 01924 268040
Matt Durkin-Jones - Chief Financial Officer
FTI Consulting 020 3727 1340
Nick Hasell / Susanne Yule
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