Carclo reaches pension deal ahead of results announcement

The Ossett-based firm said this will enable it to finalise an agreement with its bank over the extension of existing borrowing facilities for the next 18 months.

The firm also said it is holding discussions with possible purchasers of its LED division Wipac, which has incurred significant losses.

Carclo, a global manufacturer of fine tolerance injection moulded plastic parts mainly for the medical, automotive lighting and optics markets, issued the update ahead

of announcing its results for the year to March 31.

The firm said discussions have been taking place with the bank and the pension trustee in relation to the extension of the group’s borrowing facilities. The current bank facilities only extend to March 2020.

It added that the principal terms of the extended facilities have been agreed with the bank and both parties are now working to conclude the formal banking documentation.

Once finalised and documented, this agreement will allow the results for the year to March 31 to be completed and the accounts audited.

Carclo said that given the work required to do this, the group will not report its results for the 2019 financial year on July 23, as previously announced.

However, it said the preparation of the results and their audit are well advanced and, subject to finalising the banking documentation, the board hopes to be able to complete the required work and announce its results for the 2019 financial year by July 31, as required under the listingrules.

Speaking about current trading, the group said the first three months of the current year (April, May and June) have seen the Technical Plastics and Aerospace Divisions

performing better than the previous year with the Technical Plastics Division also well ahead of the board’s expectations.

As previously reported, Carclo said its LED Division, driven by the poorly performing Wipac business, has been incurring significant losses. It is anticipated that the customer support initiatives implemented at the beginning of July will result in an improving, albeit still loss-making, performance in the months ahead.

Carclo said a return to profitability now depends on the operational improvement elements of the turnaround plan being delivered. In the meantime, it said discussions are actively being pursued with potential purchasers for Wipac.