Companies: CAR   

Recommended by Growth Company Investor at 97.5p in 2007, technical plastic components play Carclo, is a firm hold following a year to March of strong growth.

Carclo reported near-20% growth in ongoing operating profits (before one-off charges) to £5.7m last year, driven by an excellent performance from its Precision Products business as well as the ongoing migration of the Technical Plastics division towards higher-margin work.

A drop in profit before tax to £4.5m (2007: £7.2m) reflected £1.3m of one-off restructuring costs and the lack of any exceptional property disposal profits last year. Underlying earnings increased more than 38% to 10.5p and investors were treated to an increase in the total dividend from to 1.9p (2007: 1.6p) per share.

Significantly, management flagged up exciting progress in the Conductive Inkjet Technology (CIT) business, where the remaining minority shareholding was acquired last year and where recent investment is beginning to bear fruit. Working with a range of customers and partners on a diverse variety of applications, including touch-screen displays, photovoltaics and RFID, CIT has made the transition from R&D business to revenue generator and looks set to ‘add a step change to earnings’ in the medium term, particularly if touted commercial breakthroughs arise.

Fast growing, refinanced and with the CIT business offering extra spice, Carclo remains compelling investment fare and is well worth holding on to, despite the pull-back in the share price, with broker Brewin Dolphin having set a 12-month price target of 110p.

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Carclo	LSE	£49.73m	87.00p	0.50p
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Other company articles:
Carclo			12/06/2008
Carclo about to hit the big time			05/10/2007
Carclo poised for consistent growth			09/02/2007
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Small cap gloom remains			28/06/2004