Carclo expects profits growth in plastics

HI-TECH company Carclo said its technical plastics division should see a 10 per cent increase in full year profits following growth in its medical and LED optics businesses.

The Ossett-based company has seen some order cancellations in recent weeks, but said these should be temporary and the division is set to enjoy a solid last quarter.

A ramp up in the production on a number of supercar lighting programmes has helped the group’s lighting division.

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Carclo said production efficiency continued to improve and its supercar lighting business was expected to deliver a significant boost to profits in the next financial year after winning design nominations on two new supercar lighting programmes.

Aston Martin, Bugatti Veyron and Lamborghini all source their LED lighting from Carclo.

The group said it continued to trade broadly in line with the expectations for the full year and its financial position was strong.

It added that the technical plastics division was expected to make further progress in profitability in the next financial year as a result of continued growth in its medical and optical businesses.

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Conductive Inkjet Technology (CIT) has made further significant progress and Carclo expects volume production to start during the second half of the 2011 calendar year.

The group’s shares fell seven per cent to close down 24.25p at 302.75p last night.

Analysts at Arden said in a note: “With the recent sharp rise in the share price, the market is now attributing substantial value to CIT – probably well in excess of £100m, so the recent emergence of a similar technology from 3M for touch screens is a concern.

“Combined with the demanding valuation and today’s downgrade, this leaves the shares looking fully valued. We have recently moved from ‘buy’ to ‘neutral’ and those investors with large positions should consider locking in some profits.”

Analysts at Brewin Dolphin cut their 2011 pre-tax profit forecasts by four per cent to £6.5m.