Carclo – material improvement sees broker increase Target Price to 90p from 75p, shares now 70p

Mark Watson-Mitchell – 21.11.2025

This morning’s announcement from Carclo (LON:CAR) covers the Interim Results for the half-year to end-September.

Upon their publication analyst Andy Smith at Panmure Liberum stated that:

“The return to meaningful profitability has allowed us to use a range of different valuation methodologies to determine a revised target price of 90p.

In summary, the investment case has materially improved.”

The Business

With comprehensive, end-to-end manufacturing capabilities, Carclo is a global precision engineering group that designs, industrialises and manufactures highly reliable solutions for Life Sciences, Aerospace and Safety & Security markets, manufactured in-region, for-region. 

The Interims

To the end of September this year, the group has reported a 6.1% lower revenue of £57.2m (£61.0m), while its underlying operating profit was a convincingly 61.2% higher at £5.5m (£3.4m).

Net debt was 3.1% lower at £24.5m (£25.2m).

The full-year expectations remain unchanged reflecting the positive momentum that has been established in the first half.

Medium-term growth initiatives are concentrated on advancing the group’s presence within the Life Sciences sector, where demand for high-precision solutions remains robust.

It is also sustaining growth in its Speciality division, particularly within the aerospace segment.

Recent developments, such as the announcement of a significant contract renewal in July 2025, underscore the group’s long-standing strategic partnerships and the expanding markets for its products.

The Management has stated that it is confident in delivering sustainable profitable growth and enduring value for all of its stakeholders.

Management Comment

CEO Frank Doorenbosch stated that:

"I'm delighted with the progress we continue to make across the business.

Importantly, our IFR is now operating consistently at 0.6 demonstrating the enhanced safety and culture we have embedded across our operations.

The business portfolio delivers a solid platform from which it can continue to grow in a sustainable and profitable manner.

Significant opportunities exist in all our key market sectors.

The strategic focus is to continue the journey from being a volume provider to a focussed engineering business providing value solutions, which will contribute to our ongoing margin expansion and positive cash generation.

I am excited about the potential to build upon the foundations we have laid."

Broker’s View

Analyst Andy Smith, at Panmure Liberum, stated that:

“The two-year strategic reset has fixed operations and underpins strong foundations on which Carclo can strengthen its market position and growth potential.

We have lifted our target price from 75p to 90p and maintain our BUY recommendation.”

His estimates for the current year to end-March 2026 are for lower sales at £119.0m (£121.0m), but with fractionally higher pre-tax profits at £5.0m (£4.9m), lifting earnings up to 5.0p (4.3p) per share.

For the coming year, he looks for £125.0m sales, £7.2m profits, with 7.3p of earnings per share.

My View

This group's shares, now at 70p, are definitely edging higher, with my recent Target Price looking more than achievable.

(Profile 18.09.24 @ 38p set a Target Price of 50p*)

(Profile 28.04.25 @ 28.50p set a Target Price of 38p*)

(Profile 29.08.25 @ 47.40p set a Target Price of 60p*)

(Profile 07.11.25 @ 65.10p set a Target Price of 80p)

Asterisks * denote that Target Prices have been achieved since Profile publication.