Stockbrokers see Carclo Engineering’s new technical plastics division – embracing recent acquisitions as well as businesses transferred from other divisions – as the company’s big hope, and forecasts on trading this year are distinctly upbeat compared with last year’s dismal performance.
Watchers are cheered too by signs that stainless steel prices have stabilised. Their collapse last year ran the Lee Steel Strip arm into stock losses, cutting group profits year on year by 25% pre-tax to £13.6m.
Cost savings from closures, sales, and mergers in the specialist wire division will also help performance this time. Mitchell Teager of broker Albert E Sharp forecast £18m pre-tax with earnings back to the level of two years ago at 20.5p and a dividend up from 10.75p to 11p.
The improved outlook has so far done little for the shares which slog along close to the year’s low of 185p. Optimists take heart from FKI’s bid for steel wire-maker Bridon, and speculate that Carclo’s wire interests too may attract a suitor.