Carclo aiming for magic touch with breakthrough technology

The Ossett-based company believes its technology can transform the $10bn market for mobile phone and tablet computer touch screens.

It has signed a deal with US-based Atmel, the semiconductor manufacturer, to launch XSense – touch screen sensors made from Carclo’s conductive inkjet technology (CIT).

Carclo’s CIT lays fine lines of copper to create considerably cheaper and thinner touch screens than those made using the conventional indium tin oxide.

It has signed an exclusive 10-year deal with Atmel, which is based in San Jose, California.

Carclo said that over the past six weeks, production samples have been supplied to eight major device manufacturers covering seven smartphone models and three tablets.

Carclo’s chief executive Ian Williamson, who confirmed he will retire in March 2013 after postponing his retirement two years ago, declined to be drawn on which eight smartphone and three tablet manufacturers are involved.

“Some are big names and some are names you’ve never heard of,” he said.

“We don’t know if we’ll get one manufacturer or all eight. It’s up to Atmel. To do all eight would be a challenge to bring up to full production.”

He estimated that the group will produce 100,000 screens a week once it starts shipping.

Apple and Samsung dominate both the smartphone and tablet markets.

Following a strategic review which considered whether to sell CIT, sell part of it or keep it, Carclo said it has decided to keep it in house in order to fully exploit its potential.

“I am pleased to report that after careful consultation with major shareholders, and careful consideration by the board, we have decided to retain and develop CIT as a core business within a technology-driven Carclo,” said Mr Williamson. In line with this decision the group has decided to appoint Chris Malley, the current chief executive of CIT, as group chief executive when Mr Williamson retires next year.

Mr Malley has been with Carclo for 13 years and has held a number of senior management positions.

Analysts gave the appointment the thumbs up.

Jon Lienard, at N+1 Brewin, said: “This is a strong appointment and reflects the future direction of the group.

“The immediate future is exciting for the group. XSense is about to be commercialised and the strategic decision has been taken to retain CIT within the group in order to best exploit its potential.”

N+1 Brewin is forecasting £2.7m of profit from CIT in the current year and £7.0m in 2014.

Yesterday Carclo announced a solid set of results for the year to March 31, which were in line with analysts’ expectations.

Group sales increased by 5.2 per cent to £93.3m.

Underlying operating profits from continuing operations rose 12 per cent to £6.6m.

Pre-tax profits fell from £6.8m to £5.5m following a £1.8m exceptional charge to cover the group’s exit from the automotive communications business.

Carclo said its diagnostic solutions business, which has developed a range of diagnostic devices for blood testing and other health checks, has seen “excellent technical progress”.

It said initial commercial discussions are underway with a potential partner.

Mr Lienard said: “We also note the strong progress being made by Carclo Diagnostics Solutions, where discussions with a potential commercial partner have begun, which could prove to be as exciting as CIT.”

Analyst Janardan Menon, at Liberum Capital, said: “While CIT’s ramp has taken longer to materialise than earlier expected, the outlook for this business is becoming even brighter than earlier believed.

“In addition, Carclo continues to develop new and high growth areas of business such as Diagnostic solutions.

“We remain excited by both the medium term and longer term outlook for the company and maintain our buy recommendation.”

Mr Williamson denied that the group is spread across too many areas and needs to slim down.

It relies on technical plastics and precision products for its current sales.

The group is a leader in high power LED lighting for supercars such as Aston Martin, Bugatti Veyron, Lamborghini and Rolls Royce.

“Our existing operations are well managed,” said Mr Williamson.

“Those cashflows are very important to us.

“There’s no compelling need to sell something. The group is well balanced and there are no current plans for divestment,” he add- ed.

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