Carclo Share Discussion Threads

[beeezzz] 06/12/2024 18:08

That's all well a good, shame the large medtech companies are not willing to pay more for Carclo medical products.....

Turnover is irrelevant profit is king, when Carclo are making less than 3% profit, any interruptions results will be negative...

Take a look at Income statement profits have halved from £7m to £3.3m.

[wigwammer] 06/12/2024 17:16

Sorry but anyone who believes the business can easily be taken elsewhere is simply naive. First,, the cost of producing the item is typically small in relation to the end selling price of the final product. The key therefore isn't cost, it is reliability of product and distribution. Second, the customer often makes joint investment in the machinery - they have sunk investment. Third, these are not simple things to produce in high volume - it requires expertise and often a close relationship between the research entity and manufacturer. Carclo is trusted by many of the largest medtech companies in the world, precisely because they have a reputation for these things. Interesting to note the people who invested in this company for years, but really have little clue about it. I would guess listening to the webcast they have a good chance of sealing more large contracts - but knowing that requires listening to the webcast! GLA

[hopeful holder] 06/12/2024 16:36

Removing tooling and just placing it in a new business never works. So often tacit knowledge is required to ensure the tools work, plus they can be quite specific for a process or machine. So whilst lifting and shifting tools on paper is great, in practice it doesn't work from my past experience.

[tradertrev] 06/12/2024 16:30

Blimey, what a bunch of Eeyores - no wonder our stock market is so cheap. Apparently none of our companies can ever prosper doing anything!

[beeezzz] 06/12/2024 15:35

One thing that must be realised Carclo are in a very competitive market place where margins are going to be continually squeezed.

I'm not sure who owns the tooling whether Carclo or clients, if clients which means they can easily take their business elsewhere.

[muffster] 06/12/2024 15:23

Not yet. Normally just before 5

[gleach23] 06/12/2024 14:35

Looks like it may have prompted a few sellers. The Stocko writer does admit to being a tad harsh.

[its the oxman] 06/12/2024 13:15

Disappointing write up on stockopedia. Cheap for good reason, but who knows. Not one to chase I would argue on a CR spike .

[wjccghcc] 06/12/2024 09:46

Fair points. However, I'm pretty sure the CFO said in the Q&A that interest costs would increase on the refinancing. Worth checking the webinar again.

[wigwammer] 06/12/2024 09:25

One more point - the gap between the accounting deficit and the actuarial deficit is around £45m, mainly driven by the uncertainty between what is considered a fair estimate of the deficit and what is considered a conservative estimate of the deficit (that's around 60p a share). The faster it is paid off, the quicker that uncertainty disappears. Given the growing nature of the sector and low cyclicality, an enterprise value of 1.2x sales wouldn't surprise me here. That's around £145m. You can play around with the deficit within that valuation and the stock always looks undervalued (also remember to take off the circa £27m debt). One should also note that the latest pension review is likely to use a materially higher discount rate, so we should see further reduction to the actuarial deficit.

[wigwammer] 06/12/2024 09:17

WJC - fair points. But 1) I didn't get the impression that interest costs would rise, from memory it was more resistance to the suggestion they would fall. 2) bear in mind the reason the market cap is so low is because the pension deficit is valued like debt by the market. So any faster repayment of the deficit should simply result in a transfer of value toward equity holders. One also needs to consider the current cost of the refinancing which has burdened recent cash flow, and that they are looking for ways to reduce the pension admin costs, which are material. I also thought it was interesting that we have seen consolidation within the sector, and that listing costs remain a key factor for Carclo. It wouldn't surprise me to see corporate interest at some point. ATB

[wjccghcc] 06/12/2024 09:13

Pension deficit will almost certainly improve but they're currently on a 15 year schedule of repair payments and on the webinar they said the trustees were keen to move to a 10 year schedule so payments will actually increase.

[ayl30] 06/12/2024 09:05

Pension revaluation due in Spring, that will improve position and make future payments easier?

[wjccghcc] 06/12/2024 08:53

The thing that concerned me from the IMC webinar was likely increased interest costs from the refinancing, likely increased pension payments as the trustees push for a 10 year timeframe to repair it as opposed to the 15 years currently, and the capex squeeze which can't go on for ever. The underlying business is progressing well but cash is going to be tight with these increased payments.

[spudders] 06/12/2024 08:50

Facts are better than dreams! GLA

[muffster] 05/12/2024 16:31

He hasn't. Will watch

[wigwammer] 05/12/2024 15:31

Not at all. The company is progressing just fine. I just think short term punters bought before the results on inflated near term expectations

[muffster] 05/12/2024 14:56

Investor meet must have been a poor show.

[johnrxx99] 05/12/2024 14:49

Well I didn't get right :-)

[wigwammer] 05/12/2024 09:04

Investor Meet Company presentation. 9am

[johnrxx99] 05/12/2024 09:01

Still got a big job to do on pensions.