Carclo's (CAR) focus on customer service and the expansion of its manufacturing facilities translated into underlying growth in operating profits of 82 per cent in the six months to 30 September. Investors responded to the company's success in capitalising on robust demand for high-tech plastic and lighting solutions by sending the shares up 10 per cent in morning trading.
At the group's core technical plastics unit, adjusted operating profits rose 11 per cent to £2.5m. With the new Chinese facility in pre-production, and plans being finalised to expand plants in India and the Czech Republic, management is confident that the division's operating margin will continue to expand as overheads are tightly controlled. Carclo's LED technology arm similarly benefited from better manufacturing facilities, as well as the introduction of a "very unique" customer service programme, says chief executive Chris Malley.
Broker N+1 Singer expects adjusted EPS of 9.6p in the year to March 2016, rising to 11.1p in 2017 (FY 2015: 7.9p). But Mr Malley says the company's earnings guidance doesn't fully factor in potentially deferred revenues from Volkswagen's new all-electric car. The chief executive says he wouldn't be surprised to receive a call to collaborate on this project, which could prompt upgrades.
| CARCLO (CAR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 120p | MARKET VALUE: | £79m | |
| TOUCH: | 118-125p | 12-MONTH HIGH: | 170p | LOW: 80p |
| DIVIDEND YIELD: | 2.3% | PE RATIO: | 40 | |
| NET ASSET VALUE: | 56p* | NET DEBT: | 74% | |
| Half-year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 48.8 | -21.2 | -31.7 | 0.85 |
| 2015 | 57.2 | 4.1 | 4.5 | 0.90 |
| % change | +17 | - | - | +6 |
Ex-div: 3 Mar Payment: 5 Apr *Includes intangible assets of £23.6m, or 36p a share | ||||
