Carclo reports weakened demand from customers in December; shares fall
Technology-led plastics group Carclo has reported that demand from some of its customers weakened in December and was slow to recover in January, according to an interim management statement issued on Thursday morning.
The group's Technical Plastics division experienced the lower demand from some customers but Carclo stated that schedules had returned to normal, with February starting well.
In the group's LED Technologies business segment, the company stated that the Wipac division's supercar lighting business had enjoyed a "solid start to its fourth quarter" while its precision engineering division continued to perform well.
Delays in Atmel supply chain
In December, the group reported that volume production of touch sensors had commenced and shipments of touch sensors had exceeded the minimum volume threshold in its agreement with Atmel Corporation.
However in today's announcement, the group reported there had been "a delay in the Atmel managed downstream supply chain associated with the differing manufacturing requirements between ITO and XSense touch sensors".
Carclo reported that the manufacturing issues had now been "largely resolved", adding that all parties were confident that the production ramp-up would commence "shortly".
The group stated that a $10m prepayment had been triggered but said it would not be received until full-scale production had resumed and Atmel had invoiced its customer.
CIT film sales to reduce in current quarter
Carclo also stated that validation of the Atmel US XSense facility was "imminent but not yet complete", explaining that this "will reduce CIT film sales in the present quarter relative to our previous expectations".
The group added: "Commercially, Atmel report continuing high interest in XSense with a further design nomination confirmed and a promising pipeline of projects. Plans are well advanced at Atmel for further increases in manufacturing capacity in the second half of 2013."
Approximately 40% of Carclo's turnover comes from the sale of precision products to the premium automotive and aerospace sectors. The remaining 60% is generated by sales of injection-moulded plastic components used in medical, optical and electronics products.
Carclo's shares were down 6.49% to 456p at 09:36 on Thursday.