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Despite the enormous opportunity in tablets and smartphones, Carclo's bread and butter technical plastics division is still the core of the business and sales here came under pressure during the half. Revenues fell 7 per cent to £26.4m, with a £0.6m fall in operating profits to £1.3m. Management believes that the timing of sales will even out over the full year. Additionally, sales at LED Technologies were lower at £11.5m, although the performance is not really comparable with last year due to the division's exit from car communications.
Chief executive Ian Williamson said the market was very varied. However, the first contribution to profits from the restructured conductive inject technology business should come through in the fourth quarter when the first tablet computers containing Carclo's sensor technology are rolled out.
The production delays have prompted broker N+1 Singer to cut its full-year profit forecast from £9.5m to £7.4m, giving a revised EPS of 9p.
|ORD PRICE:||414p||MARKET VALUE:||£269m|
|TOUCH:||410-414p||12-MONTH HIGH:||510p||LOW: 285p|
|DIVIDEND YIELD:||0.6%||PE RATIO:||50|
|NET ASSET VALUE:||85p*||NET DEBT:||20%|
|Half-year to 30 Sep||Turnover (£m)||Pre-tax profit (£m)||Earnings per share (p)||Dividend per share (p)|
Ex-div: 27 Feb
Payment: 9 Apr
*Includes intangible assets of £41.8m, or 64p a share
Carclo has performed well in what are difficult markets, but, with the shares priced at 46 times forecast earnings, cashing in on gains is a tempting option. Hold.
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