Carclo (LON:C1Y) has refocused investment in its established businesses (Technical Plastics and LED Technologies), where a differentiated offer and long-term relationships with customers provide good earnings visibility and more certainty of a return. This strategy delivered strong revenue and profits growth during H117. This growth appears set to continue, underpinned by long-term relationships with blue-chip customers. We leave our estimates and indicative valuation broadly unchanged and introduce our estimates for FY19.
Operating divisions continue to perform well
Group revenues grew by 11% year-on-year during H117 to £63.3m. This was primarily the result of growth in Technical Plastics. Pre-exceptional EBIT rose by 19% to £5.6m with underlying operating margin rising by 62bp to 8.8%, as CTP’s margins got closer to management’s medium-term target of 10%. Noting the strong first half revenue growth, we raise our FY17 revenue estimate but leave the PBT estimate unchanged, while noting the potential for upside if sterling remains weak.
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