Carclo celebrates deal to use its technology in new phone project

Ossett-based Carclo’s innovative Conductive Inkjet Technology (CIT) will be used on the phone’s touch sensors, replacing the expensive Indium Tin Oxide sensors that are currently used on all smartphones.

Carclo’s chief executive Ian Williamson said: “This is a huge profit opportunity for us. Our touch sensors are around half the cost of the equivalent Indium Tin Oxide ones. At the moment, Indium Tin Oxide is the only material that is used on touch sensors, but indium is very rare and tin is expensive.”

He added that Indium Tin Oxide also uses a very expensive manufacturing process which is brittle.

“There has been a worldwide search on for a replacement,” said Mr Williamson. “We had the great fortune to have the CIT process to lay down incredibly thin lines of copper which are so thin they can’t be seen.”

Carclo believes CIT can be used for a whole range of applications including smartphones, tablets, PCs and laptops.

“It’s better than Indium Tin Oxide as more light goes through the screen, it’s more conductive and so it’s more sensitive.”

He said the price of copper, which has been falling recently, is not an issue as an infinitesimal amount is used in the CIT sensor.

He was speaking yesterday as the group announced a 47 per cent increase in pre-tax profits to £6.8m for the year to March 31.

The total dividend was increased by 10 per cent to 2.2p per share and the group’s shares closed up two per cent last night, a rise of 5.75p to 300.75p.

The technical plastics division, which supplies plastic components for the medical, optical and electronics markets, saw underlying operating profits rise 14.3 per cent to £5.0m, helped by increased sales of medical diagnostic and LED optical products.

The precision products division reported a 15.4 per cent fall in underlying operating profits to £2.2m. The group said a ramp-up in production on a number of supercar lighting programmes helped the lighting business following a number of delays in the first half.

As a consequence the second half was much stronger.

It said that two new supercar lighting contract wins will drive significant growth in the new financial year.

A number of top of the range supercars such as Aston Martin, Bugatti Veyron and Lamborghini all source their LED lighting from Carclo.

The company is in discussions with Ford to exit the volume automotive communications business over the next 12 to 18 months, allowing it to redeploy resources to accelerate the growth of the specialist LED lighting business. This would mean a complete exit from the volume business.

Trading at the aerospace businesses was described as stable, profitable and cash generative.

Analyst Jon Lienard at Brewin Dolphin said: “Carclo has reported a solid set of full year results, in line with expectations.

“More significantly, further progress has been made at CIT and volume production for a new concept smartphone, which will trigger a $10m prepayment from Atmel (Carclo’s touch sensor partner), remains on track for the second half of this calendar year.

“Further investment is already being planned in new capacity to accommodate demand for high volumes of photosensitive film.”

Mr Williamson said that over the past year there has been a significant change in how Carclo is viewed by the financial market.

“Shareholders and investors are looking increasingly at the transformational opportunity presented by Conductive Inkjet Technology’s Fine Line Technology in touch screen applications.

“This is understandable because the profit potential of this one opportunity alone exceeds Carclo’s current profitability.

“But we do have substantial businesses in medical plastics, LED optics and high end LED lighting. These businesses are growing strongly and, with the right strategic focus, will continue to deliver the core growth for the group.”

There are no plans to hive off these other parts of the business, however Mr Williamson said the group has appointed an adviser to work out how the group can get the best value from them.

Mr Lienard said: “An increasing number of growth opportunities also exist in the group’s traditional businesses, which alongside the potential of CIT, further underpin the investment case.

“Momentum in the touch screen project appears to be gathering and positive newsflow in coming months should drive upside to our price target.”

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