Carclo

LN: CAR

£9.3m market cap

12.7p last close

Carclo is a specialist in high-precision plastic moulding principally in healthcare, optical and automotive applications. Its two main end markets are high volume medical consumables and low volume, very high value automotive lighting.

Investment summary

Carclo has announced that while the Technical Plastics and Aerospace divisions have started FY20 well, the costs associated with ramping up an unprecedented number of new low-volume lighting programmes at Wipac remain unacceptably high. Management is therefore reviewing its decision to move into the mid-volume vehicle market. We place our FY20 estimates and valuation under review until further information is provided when the FY19 results are announced towards the end of July.

Y/E Mar
Revenue (£m)
EBITDA (£m)
PBT (£m)
EPS (fd) (p)
P/E (x)
P/CF (x)
2017A 138.3 17.0 11.0 12.1 1.0 1.0
2018A 146.2 15.5 9.1 9.8 1.3 1.5
2019E 140.5 13.9 6.3 6.5 2.0 1.9
2020E N/A N/A N/A N/A N/A N/A
Last updated on 25/07/2019
Industry outlook

Wipac is working with its mid-volume customers on a plan to refocus the operation back on low-volume vehicle markets, for example supporting them in moving some lighting programmes to alternative suppliers. This move will enable Wipac to focus on improving the efficiency of the low-volume operation. We note that similar initiatives instigated last year to improve the margins in the Technical Plastics division had begun to deliver results in H219.

Last updated on 25/07/2019
Sector
TMT
Share price graph
Balance sheet
Forecast net debt (£m) 38.9
Forecast gearing ratio (%) 72
Price performance
%
1m
3m
12m
Actual (35.2) (40.9) (89.4)
Relative* (35.9) (41.2) (89.1)
52-week high/low 120.8p/12.7p
*% relative to local index
Key management
Mark Rollins Chairman
Sarah Matthews-DeMers FD

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