17th Apr 2019 09:52
LONDON (Alliance News) - Shares in Carclo PLC dropped on Wednesday as the company said that higher costs and lower revenue will result in annual profit below expectations.
Carclo shares were trading down 30% at 19.50 pence each.
The company, which manufactures fine tolerance injection moulded plastic parts, said it expects annual profit for the year ended March 31 to fall below the board's expectations due to higher than expected cost of scrap, freight and production labour.
The company attributed the higher costs to an "unprecedented number of new programmes" in an unstable manufacturing environment.
Furthermore, Carclo generated lower development and tooling revenue, as fewer new contracts were awarded during the year, impacting profitability.
Exceptional costs associated with reorganising the Wipac business and restructuring the Czech Technical Plastics facility were "broadly as anticipated" in the range of GBP1.5 million to GBP2.0 million, Carclo noted, of which GBP400,000 was non-cash in nature.
Furthermore, exceptional costs of around GBP3.0 million associated with the equalisation of guaranteed minimum pensions are to be charged in the year.
Nonetheless, the company said its Technical Plastics and Aerospace Divisions traded as expected in the year with a "much-improved performance" in the second half.
"Overall, both the Technical Plastics and Aerospace Division saw year-on-year improvements in operating profits, with the Aerospace Division significantly ahead," Carclo added.
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