Annual Report 2017 - Carclo plc

1 Annual Report 2017 . index 3 Carclo PLC. 4 IN SUMMARY. 6 CHAIRMAN'S STATEMENT. STRATEGIC Report . 9 PRINCIPAL ACTIVITIES, BUSINESS MODEL &. STRATEGIC KPIS. 12 CHIEF EXECUTIVE'S REVIEW. 16 FINANCE DIRECTOR'S REVIEW. 20 DIRECTORS' REVIEW OF THE PRINCIPAL RISKS. FACED BY THE GROUP. 22 VIABILITY STATEMENT. 24 SOCIAL RESPONSIBILITY Report . 26 DIRECTORS AND ADVISERS. GOVERNANCE. 29 DIRECTORS' Report . 32 STATEMENT OF CORPORATE GOVERNANCE. 36 AUDIT COMMITTEE Report . 38 DIRECTORS' REMUNERATION Report . 55 RESPONSIBILITY STATEMENT OF THE DIRECTORS. IN RESPECT OF THE Annual Report . 56 INDEPENDENT AUDITOR'S Report 59 CONSOLIDATED INCOME STATEMENT.

2 60 CONSOLIDATED STATEMENT OF COMPREHENSIVE. INCOME. 61 CONSOLIDATED STATEMENT OF FINANCIAL. POSITION. 62 CONSOLIDATED STATEMENT OF CHANGES IN. EQUITY. 63 CONSOLIDATED STATEMENT OF CASH FLOWS. 64 NOTES ON THE ACCOUNTS. 98 COMPANY BALANCE SHEET. 99 COMPANY STATEMENT OF CHANGES IN EQUITY. 100 NOTES ON THE ACCOUNTS - CONTINUED. 106 FIVE YEAR SUMMARY. 107 INFORMATION FOR SHAREHOLDERS. 107 FINANCIAL CALENDAR 2017 /18. 108 GLOSSARY. 2. global manufacturer Global contract manufacturer to medical market Leading designer and manufacturer for luxury and supercar LED. Lighting Leading supplier of control cables Carclo is a leading global manufacturer of in Europe fine tolerance parts for the medical, industrial, aerospace and premium automotive lighting markets.

3 3. in summary Carclo plc is a public company whose shares are quoted on the Main Market of the London Stock The highlights for the year to 31 March 2017 are summarised below - Exchange. Financial Highlights Carclo 's strategy is to Year ended Year ended 31 March 31 March develop and expand 2017 2016. its key manufacturing 000 000. Revenue assets in markets Technical Plastics 87,814 70,473. where there remain LED Technologies 43,419 40,468. Aerospace 7,049 6,386. significant further CIT Technology - 1,647. opportunities to drive Total 138,282 118,974. shareholder value. To enhance profit margins Underlying* operating profit Technical Plastics 8,707 6,192.

4 And support its LED Technologies 5,885 5,364. customers, the Group Aerospace 1,303 1,329. CIT Technology - (113). has been investing across its global 15,895 12,772. footprint. Unallocated (3,397) (2,738). Total 12,498 10,034. Approximately three fifths of Group Exceptional items (541) (4,857). revenues are generated Operating profit 11,957 5,177. from the supply Underlying* profit before tax 11,019 8,752. Profit before tax 10,478 3,895. of fine tolerance, injection moulded Basic earnings per share Underlying* earnings per share plastic components, Total dividend per share mainly for medical Net debt 26,025 24,750.

5 Products. The balance of Group revenue is IAS 19 retirement benefit 32,503 23,216. obligations derived mainly from the design and supply of specialised injection moulded LED based lighting systems to the premium automotive industry. 4. Revenue increased by to million, reflecting continued strong sales progression across our businesses and a fourth consecutive year of double-digit growth Operating profit more than doubled to million from million in the previous year Divisional underlying* operating profit was million (2016 million) and Group underlying* operating profit was million (2016 million) up on the prior year Profit before tax of million (2016 - million).

6 Underlying*. profit before tax of million (2016 - million) up on the prior year Continuing growth in revenue and operating margins in Technical Plastics Another excellent performance by LED Technologies, once again driven by the Wipac luxury and supercar lighting business Completed acquisition of Precision Tool and Die (within the Technical Plastics division) and FLTC (Europe) (within the LED Technologies Division). Strong orderbook and momentum into the new financial year *Underlying is defined as before all exceptional items Commenting on the results, Michael Derbyshire, Chairman said - The Group's strategy over recent years has been to create sustainable growth in revenues and operating profits through the development of innovative and highly efficient solutions for our existing and new customers to ensure that they see real benefits accruing from working in partnership with us.

7 Our growth throughout the year has continued to be strong and was in line with the Board's expectations. This growth has driven a significant increase in profitability. We closed the year with an exciting pipeline of opportunities across our businesses and we expect the growth that we have seen in recent years to continue. I remain confident that our strategies are working and that we are well placed to increase . the Group's profitability through the coming years. Forward looking statements Certain statements made in these Report & accounts are forward looking statements. Such statements are based on current expectations and are subject to a number of risks and uncertainties that could cause actual events to differ materially from any expected future events or results referred to in these forward looking statements.

8 5. chairman's statement Overview Carclo has delivered another strong year of both revenue and profit growth from its core Technical Plastics ( CTP ) and LED Technologies businesses. In the year ended 31 March 2017 , Carclo reported double- digit growth in revenues for the fourth year in a row, which resulted in a increase in underlying operating profits. The Group has also continued to invest in its growth opportunities, both organically through the expansion of existing facilities, and by acquisition, with the purchase of Precision Tool and Die ( PTD ). and FLTC (Europe) ( FLTC ). The acquisition of PTD provides significant new capabilities to the Net exceptional charge of million (2016 - million).

9 CTP division and enhances its offering to the key, fast-growing related predominantly to property costs in respect of previously medical device sector. exited businesses Underlying profit before tax of million The acquisition of FLTC adds skills, capabilities and further design (2016 - million), up on the prior year resources to our LED Technologies Wipac supercar and luxury car lighting business which will help it to realise its growth strategy. Group reported profit before tax of million (2016 million). These acquisitions, the completed expansions of our CTP facilities in Mitcham, UK and Tucson, US, and the ongoing expansions of our Earnings per share increased to pence (2016 pence), CTP facilities in Bangalore, India and Mitcham, UK and our Wipac up facility in Buckingham support our previously stated long term Underlying earnings per share increased to pence objectives to grow revenue, increase underlying operating profit (2016 - pence), up margins and generate an improved return on investment.

10 Group capital expenditure (excluding items acquired as part of The highlights for the year were the acquisitions in the year) was million (2016 - million), reflecting our investment strategy to deliver sustainable growth and increase return on capital over the coming years Financial Net debt was in line with the Board's expectations at Revenue increased by to million, reflecting million; this was slightly higher than the prior year strong sales progression across our businesses and a fourth ( million) due to the level of investment in the year consecutive year of double-digit growth The Group's pension deficit net of applicable deferred tax under Divisional underlying operating profit was million IAS 19 Employee Benefits has increased to million (2016 - million) and Group underlying operating profit (2016 - million).