NEWSFLOW

Carclo (#CAR) – mixed trading update, argues focus on cash conversion and margin improvement “beginning to reflect positively on our balance sheet”

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Carclo – full-year results, can it really now “approach the future with unwavering optimism”?

Previously on components company Carclo (CAR), in May with the shares up to 14p I wrote “pleased to announce” contract cancellation conclusion, but still what about those banking covenants? and concluded ahead of its year ended 31st March 2023 results detail I still avoided. What then now, on the results announcement and the shares currently at 12p?

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Carclo – “pleased to announce” contract cancellation conclusion, but still what about those banking covenants?

Components company Carclo (CAR) states that it “is pleased to announce a positive conclusion to commercial discussions with a leading global OEM related to the cancellation of a future supply contract referred to in the group's announcement on 7 December”. With the shares currently responding approaching 17% higher to 14p, how ‘pleasing’ is the contract cancellation agreement?

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Carclo – trading statement emphasises signs of improvement and “medium term” optimism… but it’s still got to reach the medium term first!

Previously writing on company now describing itself as “a preferred and trusted partner of global customers, providing high-precision critical components to the life sciences, aerospace, optics, and technology industries”, Carclo (CAR) in December with the shares down to 11.5p I noted ‘profit warning and banking covenants ‘discussions’ (as warned here)… continue to avoid’. The shares last closed at 12.475p but are currently down to 11p on the back of a “trading statement”.

NEWSFLOW

Carclo (#CAR) – expects FY performance below prior year, notes continuing discussions with lending bank HSBC

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Carclo – profit warning and banking covenants ‘discussions’ (as warned here)

Previously writing on company describing itself as “a global provider of value-adding engineered solutions for the medical, optical and aerospace industries”, Carclo (CAR) last week with the shares down to 13p I noted it stating it “evaluating the financial impact and taking mitigating actions” following a contract cancellation, but how many mitigating actions can it take?!. Now a further “trading update”.

NEWSFLOW

Carclo (#CAR) – anticipates H2 “materially lower than previous expectations”, discussing covenant amendments with bank

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Carclo – already anticipating ‘limited headroom on its interest cover covenant’, now a contract cancellation!

A “Contract Cancellation” announcement from Carclo (CAR), which includes that the contract was “expected to deliver incremental sales of between £10m and £15m annually for the life of the contract with the board's most recent expectation being that production volumes would start building from the last quarter of the current financial year”. So what of a current share price response down approaching 9% at 13p, a £9.5 million market cap?

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Carclo – argues “strong” demand, so why are the shares slumping?...

Carclo (CAR) “is pleased to report that the business expects to report a strong performance for the year” and that “demand in the group's key markets remains strong coming into the new financial year”. So what of a current share price of 24.5p, down nearly 10%?!...

NEWSFLOW

Carclo (#CAR) – CEO Antony Collins “step down… with immediate effect” following board “re-evaluated the management structure”