Carclo reveals that strong trading momentum led to significant growth in revenue

The group, which is a provider of engineered services for the medical, diagnostics, optical, electronics and aerospace industries, has announced its results for the six months to 30 September 2021.

Total revenues for the period were £58.7m, an increase of 17.5% on the prior year and the underlying operating profit more than doubled to £3.7m.

Commenting on the results, Nick Sanders, Executive Chairman, said: "The group continued to make good progress in the first half of the financial year. In common with many companies, we experienced significant Covid-related operational headwinds, but despite these delivered a strong set of financial results. Our first half performance is ahead of our expectations even after the impact of one-off benefits is removed.

"Our primary focus has been to continue to ensure our employees and communities remain safe, whilst increasing output in line with customer demand. This has been achieved despite the continuing effect of mandatory lockdowns and production restrictions in some countries.

"Demand for CTP products in the medical and diagnostic sectors has continued to increase from both existing and new customers and we expect this will continue in the post-pandemic period. Labour shortages and increased labour costs, particularly in the US, increased raw material costs and extended logistic lead times have all presented significant challenges in the first half. We have responded by implementing a range of measures and have been able to mitigate some of the impact of cost pressures by increasing prices.

"While maintaining our usual high level of delivery performance has been difficult in recent months, and this situation will take some months yet to fully recover, we nevertheless have been able to strengthen our customer and supply chain relationships in working through these challenges together.

"Encouragingly, our CTP businesses in Asia have performed strongly in line with our strategy to grow more rapidly outside of our traditionally strong US and European markets.

"We have also benefited from strong demand for tooling with significant orders received for both replacement and new projects. Tooling orders are generally a precursor to production orders which provides us with optimism about future demand.

"Our Aerospace division is also showing the early signs of recovery with order intake in the first half exceeding sales. A number of new contracts with existing and some new customers have also been secured. It will however take some time for these orders to feed through into sales and profit."

"Subject to there being no significant deterioration in trading conditions as a result of supply chain or Covid-related disruption, the board expects the positive commercial momentum seen in the first half to continue, with further product sales growth in H2. Trading margins for the second half are expected to be slightly lower than H1, reflecting the current higher cost environment.

"Nevertheless, the board currently anticipates full year underlying trading will be slightly ahead of expectations, with the one-off benefits of the Covid-related grant income and contribution from discontinued operations incremental to this."