Carclo (CAR) has decided to exit its diagnostic solutions venture after a wide-ranging review into the next phase of its development concluded that it would be wiser to plough available funds into its already established units. While recognising the potential of bringing tools to diagnose bacterial infections, cardiac problems and certain cancers to market, management confirmed that the current annual £1.5m outlay may need to be upped without any guarantee of success.
Judging by the subsequent fall in the share price, investors weren't impressed. Aside from fretting over the growth prospects of this operation, the market was also concerned about the associated £1m closure costs and write-off of £4.9m of intangibles. Analysts at Peel Hunt were more optimistic, noting both the potential of the existing Wipac and Technical Plastic divisions and the positive impact the exit should have on cash flow.
