Carclo PLC
19 September 2001
Carclo plc
COMPLETION OF DISPOSAL AND RATIONALISATION OF THE
TELETRONICS BUSINESSES
Completion of Disposal
As previously announced on 17 September 2001, the wire
manufacturing business and operating assets of Joseph
Sykes Brothers have been purchased by Bekaert, a Belgian
publicly quoted company. Cash proceeds of £5.6million
have been received, representing a premium of
approximately £1million over the estimated book value of
operating assets transferred on completion. Carclo has
retained £1.8 million of working capital which will be
converted to cash in due course.
In addition we have exchanged conditional contracts for
the sale of the Halifax site formerly occupied by Lee
Smith Wires and expect to receive cash proceeds of £2
million on completion of the sale in October.
Rationalisation of the Teletronics Businesses
In the trading statement issued at the AGM earlier this
month we stated that we were reviewing our UK teletronics
manufacturing capacity following the sharp downturn in
demand for telecom components. The conclusions from this
review are as follows:
* CTP Silleck Scotland will be closed and the
remaining business absorbed within an enlarged CTP Davall
operation. The costs of closing this business will be in
the region of £3.8 million of which approximately half
will be cash costs of redundancy and reorganisation.
* At CTP Alan, acquired in December 2000, action has
been taken to reduce the cost base. However, the board
believes that some impairment of the goodwill
provisionally associated with this acquisition needs to
be recognised and this is currently being evaluated.
* In addition we have decided to withdraw from the
manufacture of CD boxes at CTP White Knight and redevelop
the Eastbourne plant as a production unit for our growing
medical plastics business. The cost of withdrawal is
provisionally estimated at £2.1 million, of which
approximately 25% will be the cash cost of redundancies
and reorganisation.
We continue to expand our production capacity overseas.
Some of the plant and equipment released by the above
closure programmes will be redeployed to our overseas
operations.
The board of Carclo is determined to take early action to
protect the overall value of the group in the face of
this downturn and to concentrate resources on businesses
which continue to create value.
For further information please contact:
Carclo plc
Ian Williamson, Chief Executive 01924 330 500
Chris Mawe, Finance Director
Golin/Harris Ludgate
Peter Gaze/Trish Featherstone 0207 324 8888