Carclo

Plastic components manufacturer Carclo grew pre-tax profits 27% to £4.6m in the year to March, thanks to a strong performance from its Technical Plastics division.

Though sales fell 7% to £81.2m, not helped by reduced demand from the aerospace sector, Carclo benefited from operating profits more than tripled to £4.13m within the Technical Plastics arm. 'We actually had a good recession’, explained CEO Ian Williamson, 'as the markets for our Technical Plastics division, generating two thirds of our revenue, were not affected by the recession, which is why we were able to improve our profit margin.’

Via Technical Plastics and another division, Precision Products, Yorkshire-based Carclo makes an array of products that are used in a number of industries including automotive, medical, optics and aerospace. On the Precision Products side, it manufactures a variety of lighting products for ‘supercars’, a market in which sales have proved especially strong despite wider downturn. Williamson was also keen to highlight the importance of Carclo’s extensive R&D division, where ‘we are developing a touch sensing technology for use in smartphones which could see us generating substantial sales in 2011’.

Analysts are forecasting healthy growth in profits to £7.2m and 35% EPS growth to 8.8p this year, placing the dividend-paying shares, first recommended by Growth Company Investor at 97.5p in 2007, on a rather frothy-looking p/e of almost 18 times. Having said that, Carclo has significant recurring revenue, has performed well through the recession and undoubtedly has a bright future. Book an element of profit if you have yet to do so, but be sure to stay invested in the story for the long-term.