Carclo Live Discussion

gretel 10 Jul 2017

Good news re the US acquisition [link] 7, 2017Precision Tool & Die deal paying off for Carclo"New York — British plastics firm Carclo plc is benefiting from its recent acquisition of U.S. injection molder/mold maker Precision Tool & Die LLC.The deal for Derry, N.H.-based Precision — completed in October — is allowing Carclo to do low-volume medical work in-house, according to business development manager Robert Strom.Medical products made by Carclo include lab pipettes and trays based on polystyrene or polypropylene, Strom said at the UBM Advanced Manufacturing Expo, held June 13-15 in New York.Carclo's optics line — including LED optics — also is seeing steady growth in the U.S., added Strom, who's based at the firm's Latrobe, Pa., location. Custom products in that line can be based on polycarbonate or acrylic.Carclo also does work with contract manufacturing of assemblies, as well as parts for IV bags, inhalers and surgical devices."

gretel 05 Jul 2017

Strong EPS growth forecast to 2021 It's worth recording here later period forecasts to highlight the growth due to come through from the mid-volume LED contract wins through to March'21 (I haven't got Peel Hunt's forecasts so have used Equity Development's): - to Mar'21 - 20.3p EPS (Equity Development forecast) - to Mar'20 - 17.6p EPS (Equity Development forecast) - to Mar'19 - 15.57p EPS (Peel Hunt forecast) - to Mar'18 - 13.05p EPS (Peel Hunt forecast) - to Mar'17 - 12.1p EPS - to Mar'16 - 10.1p EPS - to Mar'15 - 7.9p EPS - to Mar'14 - 6.1p EPS

gretel 28 Jun 2017

Re: Notes on Wednesday's presentation CAR's 31 minute presentation from last week can be seen and heard in its entirety here FYI:[link]

gretel 26 Jun 2017

Forward P/E of only 11.3 Peel Hunt have just released their forecast for next year to Mar'19 of 15.57p EPS.CAR now have a superb historic underlying earning record: - to Mar'19 - 15.57p EPS (Peel Hunt forecast) - to Mar'18 - 13.05p EPS (Peel Hunt forecast) - to Mar'17 - 12.1p EPS - to Mar'16 - 10.1p EPS - to Mar'15 - 7.9p EPS - to Mar'14 - 6.1p EPS

gretel 23 Jun 2017

Note son Wednesday's presentation Wednesday's presentation is now online for all to see:[link] brief further notes I made:- the auto LED division should win one new mid-volume programme per annum and grow exponentially after that. This will be "transformational" for CAR- each new win will bring in £8m-£11m of additional revenues per annum - and CAR have already won 3 such contracts in the last 18 months- the CEO was keen to point out the potential for CAR to win electric car contracts, specifically mentioning Tesla (who I think he mentioned were already a customer?)- CAR have extremely high visibility of revenues going forward, as1) medical customers are locked in once obtained - the longest contract to date has been going for 25 years so far, and the minimum contract length is 5 years(2) a typical contract life in the auto LED division is 10 years- in 4 years Group revenues have increased to £138m from £87m, operating profit to £12.5m from £5.6m and underlying PBT to £11m from £3.2m- the Chinese medical device market, where CAR are situated and expanding, is showing 30% CAGR- should be debt-free in 3 years' timeIMO the presentation was excellent and extremely convincing. The CEO and FD were both in attendance.The prospects for the two core divisions were laid out cogently and explicitly. For those new to CAR, the pension and dividend issues were summarised clearly and upfront, with the emphasis being on the return of the dividend asap as already published in the results following the restructuring of the group's distributable reserves.I'd have thought most attendees would have gone away excited and intrigued by the potential for Wipac and CTP to grow exponentially.In particular, the point was rightly emphasised of the long-term security and visibility of CAR's revenues going forward for some years - in both core divisions.

r21442 22 Jun 2017

Re: Peel Hunt reiterate Buy with 200p ta... ...sorry - four years ago

r21442 22 Jun 2017

Re: Peel Hunt reiterate Buy with 200p target Having had the good fortune to buy in at 90p seriously thinking of banking half and running the rest but the greed in me looks at where this was 8 years ago and dreams of getting back<yikes>

gretel 22 Jun 2017

Peel Hunt reiterate Buy with 200p target Peel Hunt today reiterated their Buy and 200p price target:[link] CAR also got a nice plug today in this article - though the writer is imo extremely misconceived in being a fan of "boring" CAR. Not only does CAR have a healthy concentration on the motor industry in its sexiest sectors (contrary to his article), but it also has exciting and global growth potential in both its core divisions:"Hello Share Smudgers. Companies which manufacture plastic bits and pieces have done rather well in my bag in recent years. But one I have not so far touched, yet ought to do so soon, is Carclo (CAR).I’m not generally a fan of companies which give a misleading impression of what they do in their names. And you would expect Carclo to concentrate on the motor industry, which it doesn't really (though it does supply lighting systems to some vehicles, including Aston Martins). Misnomers put people off investing in your company, rather like calling your firm a set of initials does.But that aside, Carclo is doing well. Based in West Yorkshire, it has many customers in the USA, Eastern Europe and China.A year’s results were announced a few weeks ago. They showed that profit before tax had more than doubled to £10.5m over the time before. Nice. Earnings per share rose from 3.3p last time to 11.5p. Compare that to some of the firms you’re currently invested in! The P/E ratio I have is a lowly 14.8.Underlying operating profits have grown year on year since 2013 at least. Another bright green light. And the company claims to have a perky order book. It boasts that it is on course to deliver ‘strong improvements over the coming years’.About 70% of sales are overseas, which means the poorly pound will improve the balance sheet. The firm’s lighting innovations are now a recognised world leader, too.This is one of those companies which makes boring, but essential stuff. In this case, parts for medical and electronic equipment together with lighting systems. Carclo invents, designs and flogs all these things and is blessed with a market seemingly keen to buy them."

gretel 20 Jun 2017

New 2 year highs now with decent buying coming in at 167p.

gretel 16 Jun 2017

New positive report from Edison too Edison yesterday issued a new update on CAR. They've increased their valuation range by some 20% to 181p-191p.Their forecasts are 12.9p EPS this year and 15.2p EPS next year, so the P/E's of 12.3 and 10.4 leave CAR still looking good value.The very attractive PEG of 0.69 makes CAR look even cheaper:[link]

gretel 15 Jun 2017

Tipped by Equity Development today Equity Development have today issued a 15 page report on CAR with a 200p valuation.In particular, EPS is predicted to jump from a historic 12.1p to 20.3p by March'21, which would support a 300p-400p share price on a decent rating:[link] is a leading global designer and contract manufacturer (FY17 sales 70% non-UK) of fine tolerance and often mission/safety critical components for the medical (46%), optics (5%), aerospace (5%) and luxury/supercar (27%) markets. Carclo has shown that you don’t have to be a ‘Silicon Valley’ tech start-up to deliver double-digit top line growth, as the group has been doing exactly this for years.Its strategy of dove-tailing front-end innovative design, prototyping and tooling capability, with back-end flexible manufacturing, global coverage and supply chain expertise, is proving a winning formula. In turn, helping to propel FY17 revenues to £138.3m (+16.2%, or 10% constant currency), EPS up 20% (12.1p) and EBIT margins to 9.0% (vs 8.4% LY).Better still, the vast majority of these volumes are tied to OEM platforms with typical life-spans of between 5-20 years. Hence providing excellent forward visibility and predictable earnings. We think the momentum (12.4% pa sales CAGR) built up over the past 4 years should continue - underpinned by the production of long-cycle end-user products, low client churn and secular growth.Our forecast revenues are set to expand at a 10% pa clip over the next 4 years, and even accelerate slightly once Wipac’s new mid-volume LED contracts come on stream from late 2019 onwards. EPS is predicted to jump 68% from 12.1p in FY17 to 20.3p by FY21, on turnover up 46% from £138.3m to £202.5m.Encouragingly for income seekers, the Board recognises the importance of sustainable and progressive dividends. After a suspension due to pension considerations affecting distributable reserves, the resumption of payments has been pencilled in for 12 months’ time.The stock at 152p appears lowly rated, trading on PER and EV/EBIT multiples of 11.9x and 9.8x respectively vs peer averages of >20x and c. 16x-17x.We calculate there is >30% disparity versus our 200p/share sum-of-the-parts valuation."

gretel 15 Jun 2017

Re: Tipped in this week's IC No, if you read the article it means they're sticking with their prior Buy recommendation. The IC doesn't give price targets.They quote Peel Hunt's forecasts - Peel Hunt of course have a 200p target.

Frankseluk6 14 Jun 2017

Re: Tipped in this week's IC But they are sticking with their 135p target.

gretel 14 Jun 2017

Stockdale Securities positive on CAR Stockdale Securities have just issued their fortnightly summary of the recent results season, with a nice summary of CAR's results including these extracts:"Carclo 147p; MCap £107mCarclo announced FY2017 results last week which showed a continued strong recovery. Carclo is a leading global manufacturer of fine tolerance parts for the medical, industrial, aerospace and luxury and supercar lighting markets. FY2017 revenues increased by 16.2% to £138.3m (10% at constant currency), reflecting strong growth at both Carclo Technical Plastics (CTP) and LED Technologies as well as the impact of weaker sterling on the retranslation of overseas sales. Underlying PBT increased by 25.9% to £11.0m. Technical Plastics reported revenues up by 24.6%, benefiting from prior investments in capacity expansion and currency tailwinds. LED revenues increased by 7.3% with successful product launches during the year for customers including Aston Martin and McLaren. Margins at CTP increased to 9.9% reflecting increased utilisation of its UK & US facilities. LED increased its operating margin to 13.6%. The group reported strong underlying cash generation of £16.6m.""The group’s strategy remains to create sustainable growth in revenues and operating profit through the development of innovative and highly efficient solutions for its customers, ensuring the benefits accrue from working with Carclo. The outlook for Technical Plastics is positive as it continues to facilitate strong revenue growth which is resulting in good margin appreciation. The performance of the division has been complemented by the acquisition of PTD, giving it further opportunities. In LED Technologies, Wipac has continued to perform well, benefiting from good product demand and its continuing ability to win new customer programmes and is expected to deliver significant growth into the future. The acquisition of FLTC adds skills, capabilities and further design resources to its supercar and luxury car lighting business which will help deliver its growth strategy.The group closed the year with a strong order book, encouraging sales momentum and an exciting pipeline of opportunities across its businesses."

gretel 09 Jun 2017

Tipped in this week's IC CAR have been tipped in the IC this week as follows:"Research analysts raised their target prices for Carclo (CAR) in unison on the publication of results for the year to March 2017, after the technical plastics group posted its fourth consecutive year of double-digit revenue growth. Granted, this year's numbers were partly helped by the fall in sterling - constant currency revenues were up a tenth*. But a record £87.8m intake in the core technical plastics division shows the group is adept at betting on the right niche products.This is critical, as Carclo's clients in the clinical products, electronics and car manufacturing sectors have a keen nose for costs. It also explains this year's diversification into electric vehicles, LED lighting and even artificial hearts, through the twin acquisitions of FLTC and Precision Tool and Die.Elsewhere, the ugly spike in the pension deficit that occurred after the post-referendum contraction in gilt yields has unwound enough for a dividend to be paid. However, as Carclo's pension scheme remains highly sensitive to corporate bond yields, management has taken the prudent step of delaying shareholder distributions until liabilities can be contained to a sustainable level.Analysts at Peel Hunt expect adjusted pre-tax profits of £13m and EPS of 13.3p in the year to March 2018, up from £10.7m and EPS of 11.7p in 2017.IC VIEW:Carclo shares trade on a forward earnings multiple of 11, which on the current profit growth trajectory looks cheap even if you take into account the suspended dividend and the sometimes delayed - though consistently high - return on capital employed. We're sticking with our original call (137p, 30 Apr 2015). Buy."