Carclo’s milestone in $10m payment from US

The agreement relates to the shipments of touch sensors. The deal with Atmel, which is led by chief executive Steve Laub, was welcomed by City analysts.

Carclo believes its technology can transform the $10bn market for mobile phone and tablet computer touchscreens.

The technology allows developers to make larger, lighter, less power-hungry, sleeker designs for smartphones, tablets and other products.

The company declined to say whether the shipment was for tablets or other mobile devices.

In its interim management statement, which was issued last month, Carclo provided an update on volume production of touch sensors, which are based on the company’s conductive inkjet technology’s (CIT) fine line technology (FLT).

Yesterday’s statement from Carclo, which is based in Ossett. West Yorkshire, added: “Production in the downstream manufacturing chain restarted after the Chinese New Year, and the immediate customer requirements have been fulfilled.

“While shipments did not reach the intended levels, this tablet programme represents an important milestone in the adoption of FLT, and the experience gained will be invaluable in the rollout of FLT into future programmes.

“Atmel has reported additional significant design wins for XSense products (touch screen sensors derived from the company’s conductive inkjet technology) which will support CIT’s planned growth in the second half of this calendar year.

“Our new facility in Cambridge will be operational in May 2013.”

The company’s interim management statement also noted the “weaker schedules” in technical plastics in December and early January.

Carclo’s statement added: “Firm demand returned in February and is continuing in March, but we do not expect to recover the sales shortfalls in December and January.

“This will result in lower sales in technical plastics than originally forecast for the full year. As expected there has been a very good inflow of new contracts in LED technologies and trading in precision engineering remains strong.”

As previously announced, Chris Malley will take over from Ian Williamson as chief executive of Carclo tomorrow. Carclo will announce its preliminary results for the year on June 11, 2013.

In a note, analysts from Liberum Capital said: “Though there have been significant delays in the ramp of CIT’s touchscreen sensor production, such delays are not entirely unexpected when moving a completely new technology into volume production using multiple design and manufacturing partners.

“However the receipt of the $10m pre-payment signals that these issues have now been resolved, paving the way for the expected ramp in volumes to various customers in the second half of this year.

“We expect customer demand to be strong. We believe the recent weakness in the share price represents an attractive buying opportunity on the stock, with future news flow likely to turn increasingly positive.

“We therefore reiterate our strong buy recommendation and 500p price target on Carclo.”

Analysts from N+1 Singer added: “The receipt of the $10m prepayment is an important milestone and a validation of the technology. While volumes have been lower than expected on the Asus tablet programme, the learning experience has been important and the upcoming tablet design wins, some of which we expect to use the specific benefits of XSense promise much later in the year.

“Capacity increases are on track with previous pronouncements, and the next couple of years continue to look transformational for the group. We await more details on the design wins in coming months.”

Carclo also has a supercar lighting business, which supplies lights for top of the range cars such as Aston Martin, Bugatti Veyron, Lamborghini and Rolls Royce, and precision engineering businesses.

Carclo was established in 1924 as a manufacturer of card clothing, a wire product which was used in the combing of textile fibres prior to spinning.

Decision to go hi-tech paid off

When the outgoing chief executive, Ian Williamson, joined Carclo in 1995, the company was big in card clothing – which is where the name comes from.

But by the mid-1990s textiles was a declining sector.

It was Mr Williamson’s brainwave to transform the company into a hi-tech printed electronics special- ist.

The company is well known for its conductive inkjet technology – or CIT – which lays fine lines of copper directly on to plastic.