It is certainly a good summary of what an average investor might think. Why are Schroders buying? Carclo are a key supplier to the majority of the top 20 global medtech companies, a growing industry which tends to earn high double digit op margins. Carclo supply key components, typically constituting a very small part of the final cost structure, hence reliability is key. They often invest in both physical equipment and IP alongside the medtech. All of this explains why the company is likely to grow, earn higher margins and at lower cyclicality than most industrial suppliers. Sub £20m valuation due to pension deficit. But huge optionality given the long dated nature of the liability. Carclo may grow, see a step change in margin, rates may rise again...plenty of outcomes where Carclo multiples off a £20m base. Ps the U.K. constitutes sub 8% of sales, and is probably going to grow too.. ATB GLA |
I'm just an interested observer. |
That's a very good summary of your opinion, thanks.
May I ask why you are posting on this thread? You clearly don't invest in Carclo and there are many thousands of threads here you could chose. Do you have grievances against the company, for example an employee or pensioner. I don't wish to pry but I am curious. |
 hi valueinvturn.
There are a number of factors I think combine to make CAR a deeply unappealing investment, mainly, poor cashflow and high net debt, a very large pension fund that is in serious deficit and despite being a long time liability this deficit still needs to be paid from cashflow every year. Also the assumptions they use to calculate this deficit seem very generous in CAR's favour. For example I think they only expect a male pensioner of 65 to live to 82, whereas most other companies will predict an age of 86-87. This means if they can't get those assumptions past their actuary the deficit recovery payments may need to rise substantially for an already cash strapped company.
On the topic of cashflow, I think despite claiming a reduction in debt at the half year stage they actually burnt cash and hence the financial position has actually worsened.
To give you an example: there was a favourable working capital movement of £2m which went towards the £7m of cash generated. There was also a depreciation charge of £3m. Put against this however, they only spent £270k on property and plant, paid £2m in interest and £1.2m into the pension fund. I believe they lack the cash to currently invest in the business at the moment and after new loan drawings actually burnt a couple of million in cash effectively.
On the subject of margins I don't believe a plastic extruder will ever make a net margin of 10% in the long run and also the Government is already looking at ways to save on medical plastic waste as part of a wider drive to cut plastic use greatly. You can verify this for yourself with a simple Google search.
I believe Carclo's financial position is precarious and they will only survive with a fairly urgent fundraising which they may already be planning. |
You are but perhaps keep it to yourself. |
By all means filter me if you only want a rampers view of this worthless stock but I'm entitled to my opinion. |
Thankyou tradertrev, you have put succinctly what i suspect many of us were thinking. |
Arthur, not sure why you are spending your time on here or what your agenda is, but I won't have to read any more of your unsubstantiated negative nonsense any more. Filtered. |
And I'm quite sure every average investor would agree with you. But not schroders. ATB |
If I had £800bn of other people's money to play with I might be willing to chuck a tiny part of it at this junk, but not my own cash thanks. |
In fact, Schroders increased their stake in Carclo by 5% over the course of 2024. They are not in the habit of throwing money at worthless investments, whether for a special sits fund or otherwise. The most likely explanation of course, is they believe Carclo will rise in value (and they think you speak tosh) |
Also, check out the life expectancy assumptions in their pension deficit, they are very generous in CAR's favour.
And for God's sake look at both cash flow statements, they paint a worrying picture IMO. |
Schroders have nearly £800bn under management, a couple of million into CAR is a drop in the ocean for them, and then you'd have to know if it was in a special sits fund or something.
I still think these badly need a fundraising, after working capital movements they are actually burning cash. |
Schroders own over 18% of Carclo, adding a further 2% over summer 2024. Another bucket shop specialising in worthless investments, no doubt |
We are talking about First Equity of Salisbury House, London Wall, are we not ? And you think that they are a bucket shop ? |
Look up their website. |
And what evidence do you have to justify that suggestion , Arthur ? |
I think the William Black holding is just a bucket shop broker that helps larger shareholders get out of illiquid stocks |
And did you notice that the beneficiary is now shown as being Estate of William Black, so clearly William Black has recently died. I seem to recall that the last time i googled him his age was reported to be well into the 90's.
He was a former merchant banker incidentally. |
Black is a menace - in and out - not an investor |
Very encouraging that William Black has increased, but it does make you wonder where all the stock came from ! |
Wrong, looks like Black has increased his holding, maybe MM's pushed price lower to fill order... |
william black adds- that should be encouraging |
Customisable watchlists with full streaming quotes from leading exchanges, such as LSE, NASDAQ, NYSE, AMEX, Bovespa, BIT and more.
Hot Features
Premium
