Carclo plc
Annual report and accounts 2026
Engineering precision for
life-critical performance
We don’t just make components,
we engineer confidence
Contents
Strategic report
At a glance
1
Our performance
3
Our identity
4
What we do
5
Chair’s statement
7
Chief Executive Officer’s business review
8
Our markets
12
How we create value
15
Why we win
16
Our strategy
17
Key Performance Indicators
19
Chief Financial Officer’s review
20
Our people
26
Stakeholders and Section 172
27
Responsible operations
28
Task Force on Climate-related Financial
Disclosures (“TCFD”)
33
Principal risks and uncertainties
42
Viability statement
49
Corporate governance
Chair’s introduction to governance
50
Statement of corporate governance
50
Our Board
51
Our Directors
52
Board and Committee activities
53
Audit & Risk Committee report
55
Nomination Committee report
58
Directors’ remuneration report
61
Directors’ report
76
Statement of Directors’ responsibilities
79
Financial statements
Independent auditor’s report
80
Consolidated income statement
87
Consolidated statement of comprehensive income
88
Consolidated statement of financial position
89
Consolidated statement of changes in equity
90
Consolidated statement of cash flows
91
Notes to the consolidated financial statements
92
Company balance sheet
146
Company statement of changes in equity
148
Notes to the Company financial statements
149
Additional information
Information for shareholders
160
Five-year summary
164
Glossary
167
Company and shareholder information
168
Visit us online
For further information
visit us at our website.
carclo.co.uk
Global footprint
Revenue mix
At a glance
A precision platform built for scale
Eleven sites across three continents. Two divisions. One operating model — and a reason behind every part of it.
Manufacturing Solutions |
77.5%
CTP Division
Speciality Division
Speciality |
14.0%
Design & Engineering |
8.5%
£114.2m
Revenue
11
Sites
Europe, the Americas, Asia
907
Employees
Engineers, technicians, scientists
2
Divisions
CTP, Speciality
Why the platform matters
Lean, regional factories, each with a defined role. Specialisation
is what delivers on time and on margin.
Three continents means we qualify and supply where our
customers operate — and de-risk their supply chains.
The platform is pointed at life-critical and mission-critical work,
where qualification is the barrier to entry.
Specialised
not generalist
Scaled
close to customers
Selective
regulated markets
Customer presence
Our facilities
Carclo plc
Annual report and accounts 2026
1
Additional information
Financial statements
Corporate governance
Strategic report
At a glance
continued
Two divisions, one operating model
Carclo Technical Plastics (“CTP”)
Precision plastics for life-critical applications
Two major business units, Design & Engineering
and Manufacturing Solutions, operate
across multiple sites, transforming customer
requirements into engineered solutions,
including product design, tooling, prototyping
and process engineering. Manufacturing
Solutions provides high-precision injection
moulding on a global scale. The division serves
two main markets:
•
In vitro diagnostics (“IVD”), supplies
components such as cuvettes, microfluidic
cartridges and analyser modules to six of
the top ten global IVD OEMs. The global IVD
market is projected to have an annual growth
of 5% to 7%.
•
Drug delivery produces injection pens,
autoinjectors and inhalers. The injectable
drug delivery segment is valued at around
$690 billion, with annual growth of 8% to
16%, depending on the product.
European sites
•
Mitcham, England, UK.
•
Automated for long-run volumes.
•
Brno, Czechia.
•
Central European medium-run
production hub and innovation centre.
American sites
•
Latrobe, Pennsylvania, US.
•
Two areas: one automated for long-run
volumes, one a medium-run production
hub.
•
Greensburg, Pennsylvania, US.
•
Dedicated long-run welding facility and
our Design & Engineering centre.
•
Export, Pennsylvania, US.
•
Automated for long-run volumes.
Asian Pacific sites
•
Taicang, Jiangsu, China.
•
Asia Pacific production hub for long runs.
•
Bangalore, Karnataka, India.
•
Asia Pacific production for medium runs.
£98.2m
Speciality
Precision machining for aerospace and motion
Two business units: Aerospace (“Aero”) and
Light & Motion (“L&M”) precision engineering
with sector expertise for demanding
environments. Precision machining now
accounts for 62% of divisional output, up
from 27% in three years (33% CAGR). The
aerospace repair, maintenance and overhaul
market is projected to reach $121 billion by
2030, growing at 4.7% CAGR.
Speciality sites:
•
Musselburgh, Scotland, UK.
•
Cable assemblies and machined
components for civil and defence
aerospace.
•
Chartres, France.
•
Aerospace mechanical cable assemblies,
with machined components recently
added.
•
Aylesbury, England, UK.
•
Light & Motion: automotive lighting,
sensing and precision optics.
£16.0m
Light & Motion
Automotive lighting, sensing and
precision optics.
Aerospace
Flight-control cable assemblies and
machined components for civil and
defense aerospace.
£10.8m
£5.2m
Read more — how the platform creates value, on page 15 — the markets it serves, on page 12 — the strategy that scales it, on page 17
At a glance
continued
Design & Engineering
Concept design, tooling and
prototyping for regulated device
programmes.
Manufacturing Solutions
Precision and micro injection
moulding, welding, assembly, printing
and supply chain solutions.
£9.7m
£88.5m
2
Financial statements
Additional information
Corporate governance
Carclo plc
Annual report and accounts 2026
Strategic report
Our performance
Foundations laid. Precision 2030 begins.
The turnaround is complete. Revenue strategically reset, profit transformed, balance sheet rebuilt. Every condition to deliver the
Precision 2030
growth plan is now in place.
Precision 2030 – unveiling new targets following the turnaround:
8%+
Organic revenue CAGR
10%+
ROS
25%+
ROCE
≤
0
.5x
Leverage
Foundation 01
Revenue, strategically reset
Foundation 02
Profit, transformed
Foundation 03
Financial strength, rebuilt
Foundation 04
Strategic roadblocks, cleared
Cash generation now funds the growth
Precision 2030 calls for.
Profit transformed through smaller but higher
margin revenue base. Current returns already
within Precision 2030 target range.
Four roadblocks that had constrained the
equity story — each one addressed in the year.
The runway for Precision 2030 is now clear.
Deliberate exit of low-volume, low-margin
business in the US, releasing constraints and
providing launchpad for Precision 2030.
£114.2m
5.8% YoY
Group revenue (FY25: £121.2m)
£12.6m
28% YoY
Underlying operating profit (FY25: £9.8m)
£23.9m
24% YoY
Net debt (FY25: £19.2m)
Complete
Refinancing
Three-year multi-currency facility with BZ
Commercial Finance, agreed April 2025.
Agreed
Pension valuation
One-off £5.1m contribution to release
security for refinancing.
Maintained
Safety, IFR
1
Incident frequency rate (“IFR”) sustained
at 0.7 (FY25 0.7)
98%
UK renewable electricity
Group ESG profile materially strengthened
ahead of TCFD reporting (FY25 98%)
3.7p
3x FY25
Basic EPS (FY25: 1.2p)
£12.0m
37% YoY
Cash generated from operations
(FY25: £19.1m)
Asset Utilisation Rate (FY25: 3.38)
3.51
3.7% YoY
1.
IFR defined in glossary on page 167.
Financial statements
Additional information
Corporate governance
Carclo plc
Annual report and accounts 2026
3
Strategic report
Our identity
Engineering precision for
life-critical performance
We make the components inside the products people use to inject, inhale, fly with and
rely on. When failure is not an option, precision is the only answer.
Our purpose
The investment case
Three reasons to own Carclo — and each one is the argument of a later section of this report.
Our strategy
Operational excellence
Specialised, lean, regional factories delivering on
time and on margin.
Growth and scale
Deeper customer relationships and broader
reach across the US, EMEA and APAC.
Technology and differentiation
Materials leadership and drug-delivery
innovation, built on our proprietary C-Mould and
Syncura platforms.
Excel
Expand
Innovate
Our core values
Grow together
Challenge, improve, repeat
Act as one
Speak openly
Own the outcome
Built on three pillars and a foundation
of financial discipline
Precision 2030
our growth plan
Life Science, Aerospace and Safety & Security — demand driven
by demographics, regulation and structural change, not the
economic cycle.
Decades of regulatory qualification, global scale and embedded
customer relationships that create high barriers to entry.
A turnaround delivered. ROS and ROCE are already above the
floor required to deliver Precision 2030 financial targets.
1.
Resilient, high-growth markets
2.
A defensible business model
3.
Improving financial returns
Read more — our markets, on page 12
Read more — how we create value, on page 15
Read more — our strategy, on page 17
Read more – our strategy, on page 17
10%+ ROS
1
≤
0.5x leverage
Sustainable material
25%+ ROCE
2
8%+ organic revenue CAGR
A qualified pipeline
1.
ROS defined in glossary on page 166.
2. ROCE defined in glossary on page 166.
Financial statements
Additional information
Corporate governance
Carclo plc
Annual report and accounts 2026
4
Strategic report
What we do
What we make, why those markets
are growing, and how we win
What we make
We make the precision components inside products that cannot fail.
A century and a half of precision engineering — and a business built for growth.
Life Science
Above-GDP growth
Aerospace
Decade-long programmes
Safety & Security
Low cyclicality
For more information see our markets on page 12
Diagnostic disposables
Consumables inside
blood-analysis instruments
Auto-injectors and pens
Devices that deliver GLP-1
and biologic drugs
Inhalers
Dose-delivery components
for respiratory care
Pharmaceutical packaging
Closures and packaging
that protect medicines
Flight-control cables
Cables that move and
hold aircraft controls
LED optics
Lenses and reflectors for
safety-critical lighting
Why that matters
Three markets with
structural demand
where products are qualified over years
and supplied for decades.
Diagnostics and drug delivery, where
ageing populations and the shift to
injectable medicines drive demand that
grows ahead of GDP.
Components are qualified over years, then
supplied across the life of the airframe. Rising
defence budgets add to that.
Specialised products with long lives, serving
markets that hold up when others slow.
Financial statements
Additional information
Corporate governance
Carclo plc
Annual report and accounts 2026
5
Strategic report
What we do
continued
Decades of relationships and regulatory qualification
open the door — and keep it open.
C-Mould, Syncura, materials science and micro-moulding
turn a hard brief into a manufactured reality.
Customers leave with a solved problem, not just a part
— which is why they come back with the next one.
Trust
We earn the right to be there
Technology
We have the means to deliver
Transformation
We turn the challenge into the solution
Our journey
From a 19th-century precision workshop to a transformed,
growth-focused platform and now into Precision 2030.
1876
1924
2008
1997
2022
2025
2026
Bruntons founded at
Musselburgh — 150 years
of precision engineering.
Carclo is born. Founded
as a maker of card
clothing – the precision
wire used to comb textile
fibres.
Going global. CTP
scales internationally:
India, China, Czechia,
US; building the global
medical and drug-delivery
device platform that
defines Carclo today.
The pivot to plastics.
Carclo refocuses on
higher-growth precision
plastics and speciality,
divesting its metals
heritage to become a
technology-led plastics
company.
New leadership
takes the helm, the
turnaround starts.
Refinancing completed
with BZ Commercial
Finance; balance sheet
reset.
Foundations laid.
Precision 2030 growth
phase begins.
How we win
Three steps, in sequence. Each one earns the next.
Financial statements
Additional information
Corporate governance
Carclo plc
Annual report and accounts 2026
6
Strategic report
Chair’s statement
Dear shareholder
I am pleased to report a year of stability and
delivery for Carclo. Our operational performance
and quality has been excellent across all of the
Group sites throughout the year. Our US business
achieved a much-improved performance as
we completed our first full year following the
restructure that was completed in FY25. We
have now delivered three consecutive years of
improvement in our key financial measures of
Return on Sales (“ROS”) and Return on Capital
Employed (“ROCE”), exceeding our medium-term
targets of 10% ROS and 25% ROCE for FY26.
Our Speciality business has delivered very strong
growth since its formation, when we combined our
Aerospace and Speciality Optics businesses, with
underlying earnings growing by more than 50%
since FY24.
With the turnaround completed, operational
performance embedded across the Group
and financial performance on our key metrics
delivered, we are now entering the growth
phase of our strategy. We are well positioned in
structural growth markets of life sciences and
aerospace. Our strategy is designed to deliver
meaningful organic growth while maintaining
financial and capital discipline.
This will ensure we will continue to strengthen our
financial position and improve the health of our
balance sheet while delivering top-line growth.
You can read more about our Precision 2030
growth strategy in the Chief Executive Officer’s
business review on page 8.
Our commitment to the safety and wellbeing
of our people continues unabated and our
environmental initiatives are becoming an
integral part of our operations and product
development. These achievements reflect our
ongoing commitment to delivering value, building
trusted relationships, and positioning Carclo for
long-term success.
The Board
Ian Tichias has completed his first full year as
Chief Financial Officer, and I am very pleased
with the positive impact he has made. His clarity
in financial management, disciplined approach
and forward-looking mindset have brought real
value as we enter a phase of growth. Ian has built a
strong team around him to ensure we continue to
improve our governance and stewardship of the
Company.
We are now aiming to strengthen the Board and
are in the process of recruiting an additional
Non-Executive Director. I will have completed
nine years on the Board of Carclo next year and
this will provide potential succession for my role
as well as broadening our skills and experience.
This year also marks our first full year operating
under the UK Corporate Governance Code 2024,
effective for us from 1 April 2025. I am pleased to
confirm that the Company has complied with the
Code throughout the year, except for Provision
29, which takes effect from 1 April 2026 and for
which our preparations are well underway. We
have also introduced a Deferred Bonus Plan,
approved by shareholders at the 2025 AGM,
to further align our executive rewards with the
long-term interests of all shareholders.
Our people
All that we have accomplished in FY26, and
throughout recent years of transformation,
is a testament to the outstanding quality and
commitment of our people. Across every site,
function and level of the organisation, our
colleagues have shown skill, dedication and a true
sense of pride in Carclo’s achievements.
On behalf of the Board, I want to express my
sincere thanks to every member of our team.
It is your contribution that forms the foundation
of our business.
Looking to the future
The foundations of our business are strong. We
are well positioned in markets with structural
growth characteristics and have a clear growth
strategy going forward. We will deliver this growth
while maintaining the financial discipline and
operational rigour that have defined our recovery.
I look forward to reporting further progress in the
year ahead.
Joe Oatley
Chair
30 June 2026
Strong
foundations
Joe Oatley, Chair
Financial statements
Additional information
Corporate governance
Carclo plc
Annual report and accounts 2026
7
Strategic report
Chief Executive Officer’s business review
Strategy is delivering.
The next phase is growth
Three years ago, we set out three objectives
for the business: a safer and more sustainable
company, operational excellence in every site,
and a stronger, more resilient balance sheet.
This, all with the overarching objective to deliver
a sustainable Return on Sales of 10% and a
Return on Capital Employed of 25%. Our FY26
results show the strategy has delivered on all
fronts, ahead of our own schedule. From these
foundations, our Precision 2030 plan sets out
where we are taking the business from here.
What we worked towards
The objectives set in October 2022, following my
appointment as CEO, were not glamorous. They
were the conditions Carclo had to meet before we
could credibly speak about anything else.
The work that followed had three strands. Firstly,
operational excellence across every site: we
delivered lean, regional factories, each with
a clearly defined and focused role, delivering
enhanced asset utilisation, on-time delivery and
our target margin. Secondly, financial resilience.
We reduced the debt burden through stronger
cash generation, better asset utilisation and strict
working capital control.
Finally, a cultural reset: One Carclo, with a single
quality standard across three continents, and with
safety and environmental stewardship embedded
in how we run every shift in every site.
In FY26, the three strands came together. The
factory specialisation programme across the CTP
Division is complete, with every site now carrying
a defined role inside our global network.
We delivered on our promises
The numbers for the year reflect this progress.
Return on Sales increased to 11.0% (FY25:
8.1%), passing the 10% target we set in 2022.
Return on Capital Employed reached 29.1%
(FY25: 24.4%), passing the 25% target set in the
same year. Underlying operating profit grew by
28.1% to £12.6 million. Positive operating cash
generation saw cash generated from operations
at £12.0 million (FY25: £19.1 million).
Group revenue of £114.2 million was below
FY25 due to lower D&E activity in CTP driven
by lengthy sales and validation cycles which
reflect the criticality of the products we produce
for customers.
During the past four years we made difficult
decisions to exit low-margin, short-run work,
mostly in the US, and we worked through
the planned wind-down of the critical asset
revitalisation programme in our Design &
Engineering business, the multi-year cycle of
rebuilding and upgrading mould and back-end
automation across the network. This was a
keystone to create a revitalised Carclo: a better
not bigger business, that is more agile, more
coherent and financially healthier one.
CTP Division
CTP generated revenue of £98.2 million in the
year (FY25: £107.0 million). Within that headline
number, the mix has improved materially. The
completion of our operational excellence plan in
the US has delivered, as planned, a consistent and
sustainable contribution from our life sciences
work across the globe.
Design & Engineering
Design & Engineering (“D&E”) is where customer
projects are turned into manufacturable
products, and where much of our innovation
work sits. D&E revenue of £9.7 million
(FY25: £13.6 million) reflects the planned end
of the asset-revitalisation cycle that ran from
FY23 to FY26. The programme aimed to optimise
our manufacturing footprint, and the completion
of this programme has resulted in a more
efficient manufacturing base with higher capacity
utilisation.
The order book and the pipeline tell a different
story to the headline. New design verification
protocols and enhanced simulation capability
are compressing time-to-market on regulated
programmes. C-Mould, our proprietary tooling
platform, produces production-ready tools in
weeks rather than months, and continues to
deliver market-leading qualification timelines.
One example from the year, a 2K-moulded
component for a drug delivery device programme,
combining two materials shots in a single
moulding step and thereby replacing a four-piece
component, was qualified to the point of
regulatory submission within three months of the
first customer brief; an outstanding achievement
most competitors cannot hit.
Engineered
for growth
Frank Doorenbosch, Chief Executive Officer
Financial statements
Additional information
Corporate governance
Carclo plc
Annual report and accounts 2026
8
Strategic report
Chief Executive Officer’s business review
continued
We delivered on our promises
continued
CTP Division
continued
Design & Engineering
continued
The Life Tech Solutions team operates as our
innovation incubator, tightly aligned to where
customer demand will be in three to five years’
time. New developments in proprietary closures,
drug-delivery solutions and connected inhalers
all moved forward during the year; their role in
our growth plan is set out under the Innovate
section below. We also built and began piloting
the Carclo AI Framework, with a six-person
working group operating to a 60-day mandate
and a costed strategy. Five use cases have been
prioritised, from in-line vision quality control at
our regulated sites to AI-assisted computer-aided
manufacturing in Speciality. The focus is
engineering productivity; we will report outcomes
when there are meaningful ones to report.
Manufacturing Solutions
Manufacturing Solutions, with its repeat,
programme-based revenues, is the long-term
value creation engine of CTP. Revenue of £88.5
million (FY25: £93.4 million) largely reflects
the volume rebalancing across the network and
the effect of foreign exchange rate movement.
On a like-for-like basis, taking into account the
effect of product lines we exited in the prior year
and at constant currency, MS revenues were
in line with the prior year.
Having completed
the strategic realignment of the portfolio, the
business is now focused on delivering consistent
operational performance following this portfolio
restructuring. The US business has, as planned,
come through its restructuring with materially
higher operating margins, and is now an accretive
part of the Group, and the unified Pennsylvania
operation runs to the same operational and
quality standard as our EMEA and APAC sites,
delivering the same margin performance.
The standout site this year was Brno in Czechia.
Volumes grew strongly, and we made significant
progress on integrating new projects and
solutions. The site also took the lead on our
new pharmaceutical packaging and closures
growth vector, which we expect to be a material
contributor by FY29.
China continued to grow steadily, supporting our
global in vitro diagnostics (“IVD”) programme
now including regional life science customers.
India is a strategic opportunity for the Group.
Alongside our established ATM and optics work,
we are completing the site’s diversification
towards life sciences, with our main customer’s
IVD programme as the anchor. We also gained
local life science customers in an important,
high-growth market. Capacity that previously
supported declining adjacencies is now being
qualified for high-volume diagnostic disposables
and drug delivery systems, and we expect the
India site to look materially different in mix and
margin profile in the future. In the UK, our site in
Mitcham is focused on high-volume production
runs. It delivered on plan, with regulated work
from the life sciences sector continuing to grow.
During the year we completed the global rollout
of our polymer price and energy adjustment
mechanism, indexed quarterly. This is a
structural change for the business. It moves the
conversation with customers from defensive
price negotiation to transparent pass-through,
and it protects gross margin through commodity
cycles. This has been an important process in
times where input cost can rise due to geopolitical
changes. The sales team led the work and the
discipline is now embedded across the Group.
Speciality Division
Speciality revenue grew 12.5% in the year to
£16.0 million (FY25: £14.2 million), with operating
margins reaching 22.4%. From mid-2026 the
aerospace parts of the division will operate closer
together, and with technology exchange we are
exporting 150 years of precision engineering at
Bruntons Musselburgh, Scotland to our global
customer base. Bruntons has a clear brand equity
in aerospace. In Jacottet, our facility in Chartres
in France, we have invested in new machinery
capacity, allowing them to expand their offering
from cable solutions to include the precision
machining components, allowing a consistent
combined European offer.
Aerospace
Our Aerospace business delivered a third
consecutive year of record orders. The franchise
in streamline wire, the aerodynamically profiled
bracing wire used on aircraft structures, and
in-flight control cables for the main helicopter
platforms continued to grow. The product
lifecycle is worth explaining: once a component
is qualified on an aircraft platform, it is typically
supplied for the life of that platform, often
decades. That makes the work slow to win and
very hard to displace. Continued investment in
machined components, at both our Musselburgh
and Chartres sites, opened further opportunities
across civil airframes and helicopter platforms.
Beyond the strategic customers with a long
history at Bruntons, we made progress on
adjacent OEM relationships, in particular in
Defence. NATO defence spending, now indexed
to a higher floor, supports a multi-year demand
environment for the components and assemblies
we produce. Record civil European aerospace
backlogs are a second and the future growth of
this business is supported by both growth trends.
The Speciality leadership team continued to
broaden the customer base and to grow its
precision machining output. The business we have
built is meaningfully different from the one we
started with.
Light & Motion
Light & Motion is a small part of the Group, and
we have positioned it accordingly. Fresnels, our
passive infrared optics business, grew in the
year and is now a part of our Safety & Security
offering, with a focus on leisure mobility lighting
and new geographies. Coil, which supports the
visually impaired, has a new brand and distribution
strategy. None of it is dramatic. It is the right
positioning of capital and attention.
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
9
Chief Executive Officer’s business review
continued
We delivered on our promises
continued
Safety and people
Our incident frequency rate in FY26 was stable
at 0.7 (FY25: 0.7). The two-year reduction from
2.3 in FY24 is substantial, but the discipline has
to be renewed every day. Our third annual Safety
Week reinforced the same principle in every site:
every colleague has the stop-work authority.
During the year we have focused on
strengthening the team for the growth journey;
Steve Lents joined in April 2026 as VP Global
Sales, Andrew Sargisson focused on global
business development and Lee Dodd on Life Tech
Solutions. These appointments are structural
enablers for the growth phase. We have also
strengthened the finance team leadership below
Board level to provide better management
information and improved
financial controls
across the Group.
Sustainability and Project Zelda
Project Zelda, our programme on waste
reduction, energy and yield, continued to deliver
throughout the year. UK operations now run on
98% CO₂-neutral electricity. CO₂e per £1 million
of revenue improved by a further 18% during the
year. APAC continued to progress towards CO₂
neutrality, and we have begun the equivalent
groundwork in the US. The full details can be
found in our TCFD disclosure. The principle
is simple: less waste and less energy is good
manufacturing practice, and the environmental
benefit comes from the same work.
Next steps: Precision 2030
Completing a turnaround does not, on its own,
tell you where a business is going. It gets you back
to the starting line. We have done that work, and
the question of whether Carclo can deliver on its
commitments has been answered positively. What
matters from here is growth, in scale and in pace.
Precision 2030 is how we intend to deliver it.
Precision 2030 is our five-year plan that sets
out how we will deliver sustainable organic
growth while maintaining our financial discipline.
Our Precision 2030 headline targets are:
•
Organic revenue growth at a compound annual
rate of more than 8% across the plan period.
•
Net debt of less than 0.5x EBITDA by FY31.
•
While ensuring new work continues to deliver
on our minimum 10% ROS and 25% ROCE
targets.
These targets are organic. We anticipate that
we will be in a position to consider bolt-on
acquisitions in the later years of the plan. Any
future acquisition will be assessed under a
disciplined buy-and-build criteria and would
accelerate the trajectory and represent upside to
these targets.
Precision 2030 rests on two pillars: Expand and
Innovate, building on the foundations we have
just delivered. Expand is the key driver of revenue
growth through the plan. Innovate keeps that
growth defensible and provides longer-term
margin upside potential.
Expand
We will grow on the platform we have built,
through three areas of activity:
Deeper relationships with
existing customers
Carclo serves six of the top ten IVD OEMs, with
an average customer tenure of more than 15
years. Our largest customer relationship alone
runs across around 60 separate programmes,
in multiple sub-sectors, capabilities and
geographies. During the year we secured a
five-year contract renewal with this customer,
evidence that the partnership approach works
both ways.
In Aerospace we agreed a three-year contract
renewal with our major customer in the
commercial aircraft segment, demonstrating that
every part of the business contributes to stability
and growth.
The next layer of growth is more programmes,
more components and more value-add per
component at the customers where that trust
already exists.
Entering adjacent segments where
demand growth is structural
In drug delivery, our pen and auto-injector
capability is still relatively modest, but it has
earned us credibility and we have already
won new, smaller contracts on the back of it.
The opportunity we are aiming at is the rising
demand for self-injectable GLP-1 therapies:
the new generation of diabetes and weight-loss
treatments.
In pharmaceutical packaging and closures, we
are entering a large and steady market that is
moving in our direction. The growth in biologic
medicines and in device-based delivery is raising
the technical bar for the components that contain
and dispense those drugs. Seals and closures now
must do more, interact less with the medicine
inside, and survive sterilisation. Liquid silicone
rubber (“LSR”), micro-moulding and proprietary
materials are what let us meet that bar. These
are not commodity capabilities. They are hard
to qualify, and once a customer designs our
component into a regulated product, that work
tends to stay with us for years. This is higher-value
engineering that broadens our Life Sciences base
beyond diagnostics. It is a clear example of what
the Innovate pillar is meant to do: technology
that opens new revenue and makes the wider
relationship stick.
In wearables, we expect to benefit from growth
in continuous glucose monitors, patch pumps
and smart pens, devices that combine precision
plastics with electronics and sit directly on the
patient. In veterinary care, projects already
running give us a foothold in a higher-value
adjacency that is less contested.
In defence, spending is rising. The sector
demands the high standard of quality and
accreditation, which Bruntons already
delivers for our civil aerospace business. That
accreditation is what positions us to deliver in the
defence sector, and once a part is qualified the
demand is sustainable.
Reaching customer bases
we have historically under-served
In APAC our focus for growth is life sciences.
We have long produced for the global giants; the
opportunity now is with the many smaller local
players we have never seriously courted.
In India, we sit in the heart of a growing aerospace
industry. By building on the metal machining
capabilities we already operate there, we are
creating new routes to market for the Aerospace
business. These are categories we have
under-played in the past.
Innovate
Innovate is where we build intellectual property
of our own, and it matters for clear commercial
reasons.
When the technology, the material or the product
is ours, the customer designs their product
around something only we can supply. Once we
are designed in, we are difficult to design out.
The relationship deepens well beyond price, and
the margins are structurally higher. Owning the
technology also opens doors to new segments
and new customers, in pharmaceutical packaging,
drug delivery and wearables. Revenue of this kind
is more dependable and harder to dislodge, and
that is what creates lasting value in a business like
ours. That is what Innovate is for: building things
our competitors cannot offer.
We are investing in three areas, detailed below.
Not every programme will succeed, and the plan
does not need them all to. The growth we have
committed to is carried by the wider business.
What Innovate adds is durability, turning that
growth into a business that holds its position and
its margins over time.
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10
Chief Executive Officer’s business review
continued
Next steps: Precision 2030
continued
Innovate
continued
Proprietary technology
We are investing in a range of new manufacturing
capabilities. Our liquid silicone rubber capability
at our Czechia site gives us a certified position
in a material the device market increasingly
demands. Micro-moulding, which we can deliver
in the US and EMEA, producing components
measured in fractions of a millimetre, is what
the next generation of drug-delivery devices
and wearables requires, and few suppliers can
make it at production quality. C-Mould, our new
tooling platform, turns tool production from
months to weeks, which gives us a time-to-market
advantage on every new programme we quote.
New fusion-bonding metallurgies and 3D metal
printing improve the mould tools themselves. In
plain terms, better ways of joining metals inside
the tool gives us better cooling and material flow,
and that is what makes tight tolerances achievable
at production speed.
Proprietary materials
We are developing new stopper solutions for
injectable drug packaging, where tightening US
and EU regulation is pushing the market towards
engineered alternatives and rewarding the
supplier that moves first. We are also working on
unbreakable barrier vials that replace glass with
engineered plastic, removing the breakage risk
that matters most in biologic packaging.
Proprietary products and services
We are working with partners on standardised
drug-delivery engines: pre-approved internal
architectures that customers can customise
on the outside while the engine remains ours,
cutting their development time and keeping the
intellectual property with Carclo. One example
is the development of connected inhalers,
integrated with our proprietary Syncura digital
layer for adherence tracking and dose verification.
We also run innovation as an open process rather
than a closed one. The Carclo Sandbox is how we
do that, a space where we work with innovation
partners to bring ideas in from outside and take
them through to a commercial product. We gain
more ideas to draw on and we reach a workable
solution faster. We also avoid having to build
every capability in-house.
The direct revenue contribution from Innovate
within Precision 2030 is modest but this
understates its role. Innovate is the reason
existing customers stay, and the reason new ones
come to us when the problem is difficult to solve.
It is also what raises quality growth while Expand
delivers value, keeping more higher-margin
proprietary work.
What the growth phase asks of us
Operational Excellence was a leadership-driven
reset of our entire organisation. Expand and
Innovate cannot be delivered in the same way.
They need three behavioural changes across the
organisation, and all three are already underway.
Firstly, we are repositioning from order takers to
value engineers. Every customer conversation
now starts with a problem worth solving rather
than a part number, and engineering insight has
to walk into the meeting alongside sales. What
makes this real this year is the new talent joining
our Customer Partnership team.
Secondly, we are moving from defenders to
hunters. During the turnaround we defended
the base. The growth phase needs the opposite
reflex: to go and find the customers, segments
and geographies that do not come to us on their
own. Examples we are targeting are veterinary
care, defence and the Indian aerospace market:
none of these turn up at the door.
Thirdly, we are moving from reactive engineering
to proprietary IP. Historically we engineered to a
customer brief, and the customer owned the IP
that came out of it. To grow on our terms, we need
platforms that are ours, that we can sell many
times over, and that are difficult for a competitor
to copy. The LSR capability, the inhaler platform
and the Sandbox are early examples of a much
bigger shift.
Underneath all three sits a broader change, from
a turnaround culture to a growth culture. In a
turnaround, leadership cascades the plan and
the team executes. In a growth phase, the team
identifies opportunities and leadership clears the
path. The move into life sciences in India started
at the site itself. The AI Working Group grew from
the teams, and so did the Sandbox. The mindset
is already changing, and Precision 2030 makes it
the operating model.
Outlook
Three years ago, Carclo was a business facing
significant financial and operational challenges.
Through a sustained focus on operational
excellence we have addressed those issues,
and today Carclo has a strong foundation and a
disciplined plan for sustainable growth.
Market conditions across the Group are currently
mixed. In Aerospace, demand remains strong
and we are well-positioned to benefit from
sustained sector growth in both civil and defence
applications, supported by the additional capacity
now in place.
In Life Sciences, conditions are more varied: parts
of the portfolio continue to perform well, while
demand from certain diagnostics customers
has been softer in the early part of this year. In
particular, a notably weaker respiratory virus
season has reduced testing volumes across the
diagnostics industry, leading some customers to
adjust inventory levels; an effect we expect to be
temporary. We anticipate demand strengthening
as we move through the year as a number of
our new growth initiatives come on stream and
accordingly expect trading to be weighted
towards the second half and to deliver positive
organic revenue growth for the full year.
The last three years have asked a great deal of
the people at Carclo, and they have delivered.
The phase ahead will ask different things of us. It
needs more ambition and more initiative, and a
real curiosity about where the next opportunity
lies. I see those qualities in the business already.
To everyone who helped get us here, and to those
joining us now: thank you.
Frank Doorenbosch
Chief Executive Officer
30 June 2026
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
11
Our markets
Three markets where failure is not an option
Where we play — and the precision platform that makes us hard to displace in all three.
Diagnostics, drug delivery and
pharmaceutical packaging.
Flight-control cables and machined
components for mission-critical systems.
Gear technology, personal protection and
sensing optics for safety-critical applications.
Ageing populations, tightening regulation and
safety mandates drive demand that holds through
the economic cycle.
Structural, not cyclical
Components are qualified over years and then
supplied for the life of the programme – long-term,
defensible revenue.
Qualified in, hard to displace
One platform, every market
Different processes, one standard. Moulding for
plastics, machining for metal, optics for light. All held
to the same precision and qualification rigour across
all three markets.
Design & Engineering
Precision moulding
Materials science
Assembly and decoration
Regulatory qualification
Life Science
Aerospace
Safety & Security
Life Science
Aerospace
Safety & Security
Why these markets
Where we play
Core capability
Applied selectively
Growth
Annual market growth
structurally above GDP
Demand
An industry backlog of civil aircraft
maintenance and overhaul
Resilience
Sensitivity to the
economic cycle
One platform, every market
Financial statements
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Annual report and accounts 2026
12
Our markets
continued
The forces shaping our markets
Four structural
forces and what
each one means
for Carclo
The same trends that grow our markets
also raise the barriers around them.
For each force: what it is, what it means,
and what we are doing about it.
01
Demographics
and chronic disease
02
Regulation raises
the barrier
The patient base that injects, inhales and
is diagnosed is expanding structurally.
Tightening regulation is a cost to enter
and a moat once you are in.
The force
Ageing populations and rising chronic-disease prevalence,
requiring frequent dosing and growing trend of
self-administration at home. Amplified by the GLP-1 wave
and the shift to biologics.
What it means
Sustained, above-GDP demand for the auto-injectors,
inhalers and diagnostic disposables built around those
therapies.
Carclo’s response
2K moulding for pen injectors, IVD disposables at scale, and
the India facility’s pivot to life sciences assembly.
The force
Medical, aerospace and materials regulation keeps tightening
traceability, qualification and ever-higher standards of
evidence.
What it means
Higher barriers to entry. Incumbents with a regulatory track
record are protected; switching supplier is slow and costly for
the customer.
Carclo’s response
Decades of qualifications already held, a strengthened
internal control framework, and continued cleanroom
investment.
Life Science
Life Science
Aerospace
1 in 6
people worldwide will be aged over 65 by 2050
Years
to qualify a regulated component
and it is rarely re-tendered once approved
6–8%
annual growth in diagnostics and drug delivery
Standards tightening
medical and aerospace standards tightening year on year
Safety & Security
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Annual report and accounts 2026
13
Our markets
continued
The forces shaping our markets
03
Fleet renewal and
defence demand
04
Reshoring and the
materials transition
Aerospace demand is visible years out
and defence budgets are rising.
Customers want supply de-risked, closer to
home and made from better materials.
The force
Civil aerospace backlogs are at record highs while NATO
members lift defence spending past the 2% floor.
What it means
Long visibility on demand for flight-control cables and
machined components, supplied across the life of the
airframe.
Carclo’s response
Capacity investment at Bruntons, Musselburgh, and
components qualified for programmes that run for decades.
The force
After years of disruption, customers are de-risking supply
chains by qualifying regional partners and demanding more
sustainable materials.
What it means
Our three-continent platform becomes a qualification
advantage; the materials shift opens a genuine differentiation
lever.
Carclo’s response
Specialised regional factories, the C-Mould and Syncura
platforms, and sustainable materials through the LifeTech
incubator.
Life Science
Life Science
Aerospace
Aerospace
A decade
of civil aircraft production is already on order
3
continents let customers qualify supply close to where
they operate
Increasing spend
NATO 2% GDP spend increasing to 5% target
Entering qualification
sustainable materials now entering qualification
Safety & Security
Safety & Security
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Carclo plc
Annual report and accounts 2026
14
Global talent
A dedicated team of 907 One Carclo
members.
Global platform
Eleven specialised sites across three
continents.
Trusted qualifications
Decades of regulatory approvals that are hard
to replicate.
Materials and technology
Proprietary platforms (C-Mould and Syncura),
micro-moulding and sustainable materials.
Capital and discipline
A refinanced balance sheet and cash-
generative operations.
How we create value
What we put in
How we turn it into precision
The value that comes out
Shareholders
3.7p
Statutory Basic EPS
Employees
0.7
Incident Frequency Ratio
Customers
98%
Orders On Time In Full
Environment
21%
Reduction in CO
2
emissions per £m revenue
Communities
7 Projects
See Responsible Operations on page 8
What we put in, how we turn it into precision
A single operating model converts our resources into life-critical components and into measurable value for every stakeholder.
The foundation
Every step is underpinned by financial discipline
The engine that supports Precision 2030
1.29x
FY26 Net debt/EBITDA
66
%
FY26 Cash conversion
Disciplined
Capital allocation
1.
Engineer
2.
Industrialise
3.
Manufacture
4.
Sustain
Concept, design, tooling and
prototyping — solving the
hardest briefs before a part is
made.
Qualify and validate to
regulated standards, then
scale the process for
repeatable production.
Precision moulding,
machining, assembly and
decoration across our
specialised regional factories.
Supply for the life of the
programme — reliably, and
with continuous improvement
built in.
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15
Why we win
Capability that is hard to build, and harder to copy
We win the hardest briefs because we deliver the whole precision-engineering stack; proprietary process technology, the full span
from first concept to finished part, and the engineering depth behind both. The same capability that delivers Precision 2030.
Our proprietary C-Mould and Syncura platforms
don’t just make parts — they let us simulate, predict
and control the process. We take the risk out of the
hardest briefs before a tool is cut.
Proprietary process technology
From first concept to a qualified, assembled,
decorated part — under one roof. The customer
carries no integration risk, and we capture the whole
value chain.
The full span, no handoffs
A capability like this cannot be hired in a quarter or
bought off a shelf. It is generations of know-how,
precision heritage and process platforms built in-house.
Depth bought with decades
Why these markets
Read more — the markets this capability wins in, our markets, page 12
Read more — how it converts into value, how we create value, page 15
Design & Engineering
Concept, tooling and prototyping. The hard brief is solved here — before a tool is ever cut.
Precision moulding and machining
Micro-moulding, 2K moulding and precision-machined components — our core technical act, at the tolerances life-critical work demands.
Materials science
Advanced polymers, fusion bonding and 3D printing, and high-performance sustainable materials developed in the LifeTech incubator.
Assembly and decoration
Automated assembly and finishing, delivered to a qualified, repeatable standard.
The capability stack
We deliver every layer of the precision-engineering stack,
integrated, so each layer makes the next one stronger.
Proprietary technology
C-Mould and Syncura
— our proprietary platforms that
let us simulate, predict and control what we make.
Engineering depth
Engineers, technicians and material scientists
— and, at
Bruntons, 150 years of precision heritage.
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16
Our strategy
Precision 2030
a clear path for sustainable growth
Optimised returns built on financial discipline,
and clear-eyed about the levers that unlock the next step change.
The levers for the next step change
M&A
upside potential
Innovate
makes it durable
Expand
the growth
Excel
the platform
01
Demonstrate
sustained growth
A multi-year revenue trajectory — not one good year.
02
Innovation
Invest in proprietary capability to deliver novel solutions.
03
Scale
the business
An organic and inorganic path to critical mass.
FY26 — Today
£114.2m
Foundations laid. Returns already at target.
Destination
Global scale and returns
At 8%+ organic revenue CAGR.
Lean regional factories, on time
and on margin.
Deeper share of wallet in anchor accounts,
adjacent segments, and wider reach across
the US, EMEA and APAC.
Proprietary C-Mould and Syncura platforms,
plus drug-delivery and connected devices.
Disciplined buy-and-build, above the
organic plan.
8%+
Organic revenue CAGR, FY26 to FY31
<0.5x
Net Debt / EBITDA, a conservative ceiling
>10%
Return on sales,
11.0% today
>25%
Return on capital employed,
29.1% today
Financial statements
Additional information
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Strategic report
Carclo plc
Annual report and accounts 2026
17
Our strategy
continued
Strategy in action
Precision 2030 in action: three pillars, three proofs
Specialised, lean, regional factories
delivering on time and on margin.
Deeper customer relationships and broader
reach across the US, EMEA and APAC.
Materials leadership and drug-delivery
innovation, built on C-Mould and
Syncura platforms.
Initiatives
In action
In action
In action
Initiatives
Initiatives
Specialised
manufacturing centres
Deepen customer
co-development
C-Mould and Syncura
platforms
Regional
factory focus
Geographic reach
(US, EMEA)
Drug delivery and
pharma closures
Back-end
automation
New market
adjacencies
Sustainable
materials
Margin expansion
through integration
Disciplined
buy & build
Engineering-led
sales
Each pillar, its Precision 2030 targets and initiatives, and a transformation already delivered in the year; proof that the plan is working.
Pennsylvania
one site, one standard
Closed Tucson and streamlined
automation, unified quality systems.
The proof:
3.5x asset utilisation
, with US
complexity and cost materially
reduced.
India pivot
from optics to life sciences
Extended the Bangalore facility
capabilities towards Life Sciences for
Indian and South Asian markets.
The proof:
Regional IVD capability scaled
— new precision moulding and
automated assembly.
Sustainable
engineering the alternative
The LifeTech Solutions incubator is
developing next-generation polymer
alternatives that meet regulation
without compromising performance.
The proof:
Sustainable material replacements
entering qualification
with life
science platform customers.
Excel
Operational excellence
Expand
Growth & scale
Innovate
Technology & differentiation
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Annual report and accounts 2026
18
Key Performance Indicators
Measured on what matters
Eight measures that track Precision 2030 by pillar, year on year. The trajectory matters as much as the level.
Profits and returns are moving in the right direction. The strategy is working and these are the metrics we will be held to.
Revenue
Net debt
Return on Sales
Incident frequency rate
Underlying operating profit
Cash generated from operations
Return on Capital Employed
UK renewable electricity
Key to strategic pillars:
Expand
Excel
Foundation
Performance
Discipline and responsibility
£114.2m
5.8% YoY
£23.9m
24% YoY
11.0%
2.9pp YoY
0.7
Sustained
£12.6m
28% YoY
£12.0m
37% YoY
29.1%
4.7pp YoY
98%
98%
FY25
FY26
£114.2m
FY25
£121.2m
FY24
£132.7m
FY26
£23.9m
FY25
£19.2m
FY24
£29.5m
FY26
11.0%
FY25
8.1%
FY24
4.9%
FY26
0.7
FY25
0.7
FY24
2.3
FY26
£12.6m
FY25
£9.8m
FY24
£6.6m
FY26
£12.0m
FY25
£19.1m
FY24
£18.6m
FY26
29.1%
FY25
24.4%
FY24
13.1%
FY26
98%
FY25
98%
FY24
50%
A deliberate quality reset, exiting low-margin
US volume.
Increase largely driven by one-off £5.1 million
pension contribution.
Exceeds our 10% target.
Focus on safe environment sustained.
Margin rebuilt off a smaller,
sharper revenue base.
Funding the growth from within.
>80% conversion target.
Above 25% target; more than doubled over
two years.
Substantially decarbonised UK operations;
emissions disclosure in TCFD.
Financial statements
Additional information
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Strategic report
Carclo plc
Annual report and accounts 2026
19
Chief Financial Officer’s review
Improved performance,
positioned for growth
Ian Tichias, Chief Financial Officer
Overview
The Group delivered a resilient operating
performance against a backdrop of
macroeconomic weakness, achieving its key
financial targets ahead of schedule. The drivers of
this performance were continued improvements
in efficiency and the successful execution of our
move to higher margin business.
The positive operational performance enabled
the achievement of the Group’s medium-term
targets for the key metrics of Return on Sales
(“ROS”) and Return on Capital Employed
(“ROCE”). ROS improved to 11.0% (FY25: 8.1%),
ahead of the 10% target, while ROCE improved
to 29.1% (FY25: 24.4%), ahead of the 25%
target, both set in 2022, which now become the
reference point for the business in the future.
The accomplishment of these targets is directly
related to the actions taken over the past three
years to restructure the business, focusing on
advanced process optimisation, increased asset
utilisation and efficiency, improved pricing, better
purchasing and a drive to reduce waste while
demonstrating robust cost management.
Underlying EBITDA (see page 22 for more detail)
was £18.6 million, up 14% (FY25: £16.4 million)
driven by exiting low-margin, short-run work and
concentrating the portfolio on regulated markets.
As a result, underlying operating profit of £12.6
million increased by 28% (FY25: £9.8 million).
Net finance charges for the period were
£7.4 million (FY25: £4.9 million), of which
£3.5 million relates to non-cash items,
accordingly bank and lease interest was broadly
in line with the prior year. Profit before tax
increased to £4.8 million (FY25: £2.7 million).
Adjusting items were £0.3 million (FY25: £2.3
million), and statutory earnings per share
increased to 3.7p (FY25: 1.2p).
We also completed a refinancing of our primary
external financing facility and agreed a deficit
recovery plan for the Group’s UK defined
pension benefit plan at the beginning of the year.
Together, the operating performance and the
financial measures we have taken provide a sound
platform for the implementation of the Group’s
Precision 2030 growth plan.
We use a range of KPIs to manage performance
of the business and to measure progress against
our strategic goals, these are highlighted and
discussed throughout this report. These KPIs are
set out on page 19. A reconciliation of statutory
results to other non-GAAP financial measures is
provided on pages 159 to 162.
Financial performance
Revenue
Group revenue during the period was
£114.2 million, a decline of 5.8% or 3.7% on a
constant currency basis over the prior year
(FY25: £121.2 million).
This year is the first full reporting year following
the strategic portfolio reset. In FY25, we
completed the planned exit from small series,
non-scalable business and the closure of the
Tucson, Arizona site. Revenue of £2.2 million was
recognised in FY25 in relation to products not
transferred to other sites.
The business operates with two divisions, CTP
and Speciality. The CTP division reported full year
revenue, of £98.2 million (FY25: £107.0 million).
The CTP division operates through with two
revenue streams, Design & Engineering (“D&E”)
and Manufacturing Solutions (“MS”).
MS revenue within CTP (excluding foreign
exchange impacts and the site closures in FY25)
was in line with the prior year, at £88.5 million
(FY25: £93.4 million or £91.0 million on a
constant currency basis, inclusive of £2.2 million
exited and not transferred to other sites). Strong
growth in China and Czechia was partially offset
by lower revenues in India, due to reduced
demand in customers’ end markets. UK revenue
was broadly in line with the prior year with
US revenue 4% lower in local currency as we
streamlined the product portfolio. The nature
of D&E revenue is such that fluctuations in the
level of annual revenues are not unusual, given
it is project driven. Following the completion of
significant D&E projects in prior years, which
saw significant investment from long standing,
established customers in specific projects, there
has been lower activity during FY26, primarily
in the US. Since these investment programmes
have concluded, focus has turned to ongoing
regular business. While there was an increase in
the second half of FY26, the full year revenue for
D&E was £3.8 million (28.2%) lower than FY25
at £9.7 million. During the year we worked on
193 projects, the majority of which we expect
to convert into production contracts.
Financial statements
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Strategic report
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Annual report and accounts 2026
20
Chief Financial Officer’s review
continued
Financial performance
continued
Revenue
continued
The Speciality Division reported full year revenue of £16.0 million (FY25: £14.2 million), an increase
of 12.5%. Continued growth in Aerospace revenues, driven by increased demand as well as expanded
precision machining capabilities, delivered a third consecutive year of record Aerospace sales. An
analysis of divisional revenue and operating profit is provided in the table below.
£000
FY26
FY25
Change
Change %
CTP
MS revenue
88,487
93,443
(4,956)
-5.3%
D&E revenue
9,730
13,555
(3,825)
-28.2%
Total CTP revenue
98,217
106,998
(8,781)
-8.2%
Operating profit
15,089
12,373
2,716
+21.9%
Operating profit %
15.4%
11.6%
+3.8%
Speciality
Total Speciality revenue
15,994
14,221
1,773
+12.5%
Operating profit
3,584
2,801
783
+27.9%
Operating profit %
22.4%
19.7%
+2.7%
Group revenue
114,211
121,219
(7,008)
-5.8%
Central costs
(6,409)
(7,594)
1,185
-15.6%
Group operating profit
12,264
7,580
4,684
+61.8%
Group operating profit %
10.7%
6.3%
+4.5%
Our top five customers accounted for 70% of revenue (FY25: 68%) with tenure for these customers
being on average 23 years. For our largest customer, we produced 25 different products. This
demonstrates both the highly-regulated nature of the markets in which we operate as well as the depth
of customer relationships underpinned by our excellent quality and delivery metrics.
Central costs were £1.2 million (15.6%) lower than the prior year, reflecting a £1.8 million reduction in
refinancing costs to £0.3 million (FY25: £2.1 million), partially offset by continued investment in people
and organisational capability.
During the year, the business submitted an insurance claim in respect of property damage incurred.
Management considers recovery under the relevant insurance policies to be probable; however, due to
the status of discussions and the claims assessment process, the amount and timing of any recovery
cannot be estimated reliably at the reporting date. The claims assessment process is expected to
progress during the second quarter of FY27.
Underlying operating profit
Despite the reduction in revenue, full year underlying operating profit increased substantially to
£12.6 million (FY25: £9.8 million) as a result of the Group’s margin expansion initiatives. Our key
measure of ROS was 11.0% showing a significant increase from 8.1% in FY25. ROS during the second half
of the year was 12.6% up from 9.6% in the first half, underlining the positive trajectory of margin growth.
The medium-term target of achieving ROS of 10.0% was established in 2022, and the accomplishment
of this target is directly related to the actions taken over the past three years to restructure the
business, focusing on advanced process optimisation, increased asset utilisation and efficiency,
improved pricing, better purchasing and a drive to reduce waste while demonstrating robust cost
management.
Statutory operating profit and non-underlying items
The statutory operating profit for the year of £12.3 million was significantly better than the prior
year (FY25: £7.6 million) as a result of the increased underlying operating profit and reduced
non-underlying charges.
Non-underlying items for the year were a net charge of £0.3 million comprising rationalisation and
refinancing costs, being partially offset by net proceeds relating to the insurance claim previously
mentioned. In FY25, the Group had £2.3 million of non-underlying costs, principally associated with
the refinancing of the Group’s borrowing facilities (see below).
Net finance expense
Net finance expense for FY26 was £7.4 million (FY25: £4.9 million). This includes two non-cash items:
imputed net interest on the defined benefit pension liability of £2.7 million (FY25: £1.7 million) and
amortised finance costs of £0.8 million (FY25: £nil) arising from the debt restructuring completed
in April 2025. Bank and lease interest paid in the year is largely in line with FY25, reflecting the lower
average net debt in the year, combined with a higher interest rate margin paid on the new debt facilities.
£000
FY26
FY25
Change
Interest payable on bank loans and overdrafts
2,923
3,075
(152)
Lease interest
458
679
(221)
Other finance costs
543
—
543
Interest receivable on cash and cash deposits
(46)
(571)
525
Total cash items
3,878
3,183
695
Amortised refinancing costs
843
—
843
Interest on the net defined benefit
pension liability
2,711
1,745
966
Total non-cash items
3,554
1,745
1,809
Total finance expense
7,432
4,928
2,504
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
21
Chief Financial Officer’s review
continued
Financial performance
continued
Taxation, profit after tax and earnings per share
The income tax charge for the year was £2.1 million (FY25: £1.8 million), representing an effective tax
rate of 44.2% (FY25: 67.1%). The effective tax rate varies depending upon the geographical source of
profits, corporation tax rates in the countries where profits are generated as well as the availability of
local allowances including the carry forward of prior year losses. The Group’s effective tax rate in FY26 is
higher than the UK corporation tax rate of 25% due to a movement in unprovided UK deferred tax assets
(£787k), largely losses in the UK which are not recognised for deferred tax purposes and withholding tax
(£265k) incurred on the repatriation of funds to the UK from certain overseas jurisdictions.
Alternative performance measures
Statutory profit after tax was £2.7 million (FY25: £0.9 million), giving statutory earnings per share of
3.7 pence (FY25: 1.2 pence). Underlying profit after tax was £3.0 million (FY25: £3.1 million), giving
underlying earnings per share of 4.1 pence (FY25: 4.3 pence). The underlying earnings per share is
impacted negatively by non-cash interest charges which were significantly higher than prior year.
In the analysis of the Group’s financial performance, position, operating results and cash flows,
alternative performance measures are presented to provide readers with additional information.
The principal measures presented are underlying measures of earnings including underlying operating
profit, underlying profit before tax, underlying profit after tax, underlying EBITDA and underlying
earnings per share.
This results statement includes both statutory and adjusted non-GAAP financial measures, the latter
of which the Directors believe better reflect the underlying performance of the business and provides
a more meaningful comparison of how the business is managed and measured on a day-to-day basis.
The Group’s alternative performance measures and KPIs are aligned to the Group’s strategy and
together are used to measure the performance of the business and form the basis of the performance
measures for remuneration. Underlying results exclude certain items because, if included, these
items could distort the understanding of the performance for the year and the comparability between
the periods.
A reconciliation of the Group’s non-GAAP financial measures is shown on pages 159 to 162.
Comparatives are provided alongside all current year figures. The term “underlying” is not defined
under IFRS and, as such, the underlying measures reported may not be comparable with similarly
titled measures used by other companies.
All profit and earnings per share figures relate to underlying business performance, as defined above,
unless otherwise stated. A reconciliation of underlying measures to statutory measures for FY26 is
provided below:
£000
Underlying
Non-underlying
items
Statutory
CTP operating profit
15,101
(12)
15,089
Speciality operating profit
3,424
160
3,584
Central costs
(5,925)
(484)
(6,409)
Group operating profit
12,600
(336)
12,264
Net finance expense
(7,432)
—
(7,432)
Group profit/(loss) before taxation
5,168
(336)
4,832
Taxation expense
(2,128)
(9)
(2,137)
Group profit/(loss) for the year
3,040
(345)
2,695
Basic profit/(loss) per share (pence)
4.1p
(0.4)p
3.7p
The non-underlying items reported in the Group profit/(loss) before taxation comprise:
£000
FY26
FY25
Refinancing costs
(270)
(2,137)
Rationalisation costs
(225)
(122)
Net proceeds of insurance claim
159
—
Settlement of legacy health claims
—
1
Total non-underlying items
(336)
(2,258)
Cash flow
Cash generated from operations was £12.0 million (FY25: £19.1 million) reflecting the continued focus on
cash generation via operational improvements and capital expenditure management. The full year cash
conversion rate was 65.6% (FY25: 135.0%).
Following the significant working capital cash inflow in FY25 (£5.8 million), FY26 saw a working capital
outflow of £6.3 million. This was due to a significant change in provisions and accruals when compared
to the prior year, along with a change in some customer payment terms associated to the Group’s new
financing arrangements. The movement in accruals arises from the specific requirement for accrued
costs (mainly energy and employee benefit costs) at FY25 that have unwound during FY26, resulting in
a working capital outflow for the year. Inventory levels increased by £1.1 million when compared to FY25,
with slightly higher levels of raw materials being held in light of current economic conditions. Working
capital was at a level of 9.7% of revenue during FY26, with further pressure on this ratio foreseen during
the coming year with an expected increase of 100-150 bps over FY26. Net cash outflow from investing
activities during the year was £2.8 million (FY25: £0.4 million). There has been continued careful control
of capital expenditure, focusing on those investments that deliver a rapid payback and support both
asset performance and asset utilisation. Additions to tangible fixed assets in the year were £3.4 million
(FY25: £2.4 million) of which £0.8 million (FY25: £1.4 million) was through right-of-use leased assets.
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
22
Chief Financial Officer’s review
continued
Financial performance
continued
Cash flow
continued
Substantial capital expenditure in previous years and more efficient use of assets, driven by operational
improvements, has reduced the required level of capital investment in the last two years. This is
reflected in the value of tangible fixed assets and the increased asset utilisation rate of 3.5x (FY25:
3.4x) over this period.
Net cash outflow from financing activities during the year was £5.6 million (FY25: £7.0 million),
comprising £3.0 million repayment of lease liabilities (FY25: £4.2 million) and net repayment of other
borrowings of £2.6 million (FY25: £2.8 million). There was an overall £4.2 million decrease in cash and
cash equivalents during the year (FY25: increase of £4.0 million).
Cash generated by the Group was principally utilised to make capital investment and lease repayments,
pension deficit contributions, scheduled bank loan repayments and interest payments. The Group’s full
cash flow statement is set out on page 90.
Financial position
Net debt
Net debt as at 31 March 2026 was £23.9 million, an increase of £4.7 million compared to the prior year
(FY25: £19.2 million). This reflects the one-off pension scheme contribution of £5.1 million made in April
2025 at the time of finalising the Group’s refinancing, along with the annual contribution of £3.5 million,
together with a working capital outflow. The Group’s focus remains on operational improvements, cash
generation and the prudent management of borrowings.
Net debt comprised gross debt, from borrowings and leases, of £29.7 million (FY25: £29.9 million) less
cash and cash equivalents of £5.8 million (FY25: £10.7 million). The gross borrowings reflect the current
financing arrangements, along with outstanding leases of £4.9 million after lease repayments in the year
of £3.0 million.
Borrowing facilities
On 24 April 2025, the Group refinanced its primary external borrowing arrangements through a
three-year multi-currency facility with BZ Commercial Finance DAC (“BZ”), comprising a £27.0 million
term loan and a revolving credit facility (“RCF”) of up to £9.0 million.
On inception, £29.9 million was drawn under the BZ facility, comprising £26.8 million under the term
loan and £3.1 million under the RCF. The proceeds were used to discharge all amounts outstanding
under the Group’s previous borrowing arrangements with HSBC, make a one-off £5.1 million
contribution to the Group’s defined benefit pension scheme and provide funding to support ongoing
operations.
The facility includes an asset-based lending arrangement under which borrowings are permitted against
specified classes of assets held by the Group’s UK and US businesses. Of the £27.0 million term loan,
£8.0 million is supported by owned land and buildings, £5.0 million by owned plant and machinery, and
the remaining £14.0 million comprises a non-asset-specific cash flow loan. Of the £9.0 million RCF,
up to £7.0 million is available against eligible trade receivables and up to £2.0 million against eligible
inventory.
The facility permits borrowings in GBP, EUR and USD. Carclo plc, Carclo Technical Plastics Limited and
Bruntons Aero Products Limited are currently authorised borrowers under the facility. Cross-guarantees
are provided by the authorised borrowers and other material subsidiaries, as defined in the facility
agreement.
As at 31 March 2026, £24.9 million remained outstanding under the term loan following repayments of
£1.9 million during the year. There were no drawings under the RCF at the year end, leaving available
headroom of £9.0 million, subject to applicable borrowing base limitations.
Defined benefit pension scheme
The triennial actuarial valuation of the Group’s UK defined benefit pension scheme at 31 March 2024
was completed during April 2025. The valuation, prepared by the Scheme trustees on a technical
provisions basis, reported a deficit of £64.5 million, a significant reduction from the £82.8 million liability
reported as part of the previous triennial valuation of 31 March 2021.
On a technical provisions basis, the estimated net liability has fallen steadily each year from 2021 as
a result of the Company-settled cash contributions and the gross liabilities falling by more than the
change in pension scheme asset values. The 31 March 2024 valuation reflected higher government bond
yield rates, driving up the discount rate and reducing Scheme liabilities, partially offset by an increase in
assumed member life expectancy, which increased Scheme liabilities.
A deficit recovery plan was agreed with the Trustees in parallel with the refinancing arrangements
finalised in April 2025. This includes a lump sum one off payment into the Scheme of £5.1 million made
at the time of finalisation of refinancing in April 2025 and annual contributions of £3.5 million for five
years to 31 March 2029 followed by annual contributions of £5.8 million, which are inflationary indexed
annually until 31 March 2037, being 2 years earlier than the deficit recovery plan from the 31 March 2021
valuation. During FY26, total contributions paid into the Scheme were £8.6 million (FY25: £3.2 million).
Since the completion of the 2024 triennial valuation, the estimated technical provisions deficit has fallen
further to £52.9 million at 31 March 2026.
The IAS 19 valuation of the Scheme liabilities at 31 March 2026 resulted in a net liability of £46.8 million,
a £5.0 million decrease from the net liability at 31 March 2025 (FY25: £51.7 million). The principal driver
of the decrease in the IAS 19 net liability was Company contributions, alongside relatively smaller gains
on Scheme assets (£0.4 million) and a net reduction in liability arising from changes in assumptions and
experience losses (£0.2 million).
The IAS 19 valuations are adopted for statutory reporting purposes and do not form part of the ongoing
management of the pension schemes. IAS 19 actuarial calculations can be volatile from year to year
because the liabilities are measured by reference to corporate bond yields, whereas the majority of the
pension scheme’s assets are invested across a variety of asset classes that may not move in the same
way. Gain on Scheme assets in excess of interest income during FY26 totalled £0.4 million and was
mostly driven by the decrease in the value of the Scheme’s liability-driven investment funds (“LDI”).
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
23
Chief Financial Officer’s review
continued
Financial position
continued
Defined benefit pension scheme
continued
These LDI funds are designed to hedge movements in liabilities due to changes in interest rates and
inflation expectations. As interest rates have increased across the accounting period, the values of
the LDI funds have decreased accordingly. The liability calculated under technical provisions includes
more prudent assumptions, but at any time provides a more accurate reflection of the longer-term
cash commitment required to settle the member liabilities. The actuarial gains and losses arising from
variances against previous actuarial assumptions are recognised in the statement of financial position
with corresponding movements in reserves.
The Company and the Scheme trustees are committed to working collaboratively towards reducing the
Scheme deficit.
Treasury
The Group faces currency exposure on its overseas subsidiaries and on its foreign currency
transactions. In addition, as set out in the principal risks and uncertainties section of the annual report
and accounts, the Group is reliant on regular funding flows from the overseas subsidiaries to meet
banking, pension and administrative commitments.
To manage this complexity, the Group has a centralised Treasury function that manages the Group’s
cash, debt and foreign exchange risks.
The Group reports trading results of overseas subsidiaries based on average rates of exchange
compared with sterling over the year. This income statement translation exposure is not hedged as
this is an accounting rather than cash exposure and, as a result, the income statement is exposed to
movements in the US dollar, euro, renminbi, Czech koruna and Indian rupee. In terms of sensitivity,
based on the FY26 results, a 10% increase in the value of sterling against these currencies would have
decreased reported profit before tax by £0.7 million.
Dividend
Under the BZ borrowing facility agreement, dividend payments are permitted, but they require prior
approval of the lender.
The current focus is on cash flow generation to support strategic growth and, as such, no dividend is
proposed in respect of the year ended 31 March 2026. The Board will continue to review the Group
financial performance, capital allocation and reserves regularly to determine the appropriate time for
dividend payments.
Accounting policies
The Group’s annual consolidated financial statements are prepared in accordance with UK-adopted
International Accounting Standards and with the requirements of the Companies Act 2006. There have
been no significant changes to the Group’s accounting policies during the period.
Post balance sheet events and going concern
Post balance sheet events
There are no post balance sheet events to report.
Going concern
A £36 million asset-backed borrowing facility with BZ, that was announced on 24 April 2025, provides
available borrowings for a three-year term to April 2028. The level of borrowings is contingent upon
the value of current and non-current asset categories held by the Group’s UK and US trading subsidiaries.
There are three primary financial covenants required to be tested under the BZ facility agreement,
as follows:
Covenant
Definition
Threshold
Minimum EBITDA
Underlying Group EBITDA calculated on a last six
months basis
No less than 75% of
budget
Fixed Charge Cover
Ratio (“FCCR”)
Underlying Group EBITDA divided by the sum
of fixed charges comprising debt service costs,
debt repayments, pension scheme contributions,
tax payments, capital expenditure and dividends
or other capital distributions calculated on a last
twelve months basis
Until 31 March 2027
no less than 1:1
After 31 March 2027
no less than 1.05:1
CAPEX
Cash paid on tangible and intangible fixed assets
measured annually for the twelve months to
31 March
No more than 120%
of the annual budget
The Group remained compliant with the Minimum EBITDA and FCCR financial covenants throughout
the year ended 31 March 2026. In accordance with the facility agreement, these covenants were tested
monthly from May 2025 and, following twelve months of compliance under the agreement, including
compliance in the two preceding quarters, testing has moved to a quarterly basis. The CAPEX covenant
is tested annually from the start of each reporting period.
The Group has prepared a forecast of financial projections for the three-year period to 31 March 2029,
which has been utilised as the base case underpinning the going concern assessment for the period
through to June 2027, being 15 months after the year end and 12 months from when the financial
statements are authorised for issue. These projections include assumptions around revenue growth,
modest margin improvements, consistent working capital trends and stable interest rates. The Directors
have reviewed cash flow and covenant forecasts over this period considering the Group’s available
borrowing facilities and the terms of the arrangements with the Group’s lender and the UK defined
benefit pension scheme. The forecast shows adequate headroom and supports the position the Group
can operate within its available borrowing facilities and in compliance with covenants throughout this
period.
The Group is subject to a number of key risks and uncertainties, as detailed in the principal risks
and uncertainties section on pages 42 to 48. Mitigating actions to address the risks are also set out
in that section of the report. These risks and uncertainties have been considered in the base case,
and downside sensitivities and have been modelled accordingly. These sensitivities consider the
uncertainties facing the Group and model the impact of a range of severe but plausible downside
scenarios, as well as considering the impact of aggregating certain of these, and shows that the Group
would be able to operate within its available facilities and meet its agreed covenants were these
scenarios to arise.
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
24
Chief Financial Officer’s review
continued
Post balance sheet events and going concern
continued
Going concern
continued
The specific climate-related matters set out in the TCFD section on pages 33 to 41 have been
considered and they are not expected to have a significant impact on the Group’s going concern.
The severe but plausible downside sensitivities modelled included reductions in forecast revenue of up
to 6.6%, a 4% increase in direct material costs (equivalent to approximately 2.2% contribution margin
erosion) and a 2% increase in interest rates. The downside scenario modelling assumes management
bonuses are not payable where the relevant performance conditions are not achieved but does not
include the benefit of any other mitigating actions available to management.
Under each of the standalone downside scenarios modelled, the Group maintains adequate liquidity
throughout the assessment period and remains compliant with all financial covenants. The Directors
also assessed a combined downside scenario incorporating both a significant reduction in forecast
revenue and a sustained increase in direct material costs. Under this combined scenario, no liquidity
shortfall arises; however, there is a temporary breach of the FCCR covenant. The Directors consider
the concurrent occurrence of these downside assumptions to be remote. Furthermore, the scenario
does not reflect a range of mitigating actions available to management, including the reduction of
discretionary expenditure and the deferral of non-essential capital expenditure. Modelling performed
by management demonstrates that actions considered achievable and within management’s control
would be sufficient to restore covenant compliance under this scenario.
Given that FCCR represented the most sensitive covenant within the Group’s financing arrangements,
the Directors performed additional covenant-focused downside testing, including scenarios in which
EBITDA remained broadly flat against FY26 levels and reduced by 10% compared with FY26. While
these scenarios resulted in reduced covenant headroom, management identified specific mitigating
actions that are considered achievable and within management’s control and which would be sufficient
to maintain compliance with the Group’s covenant requirements.
The Group is not exposed to high-risk sectors or countries but is dependent on certain key customers,
creating risks and uncertainties, which are documented in detail alongside mitigating actions in the
principal risks and uncertainties section.
It should be noted that the Group is operating in a period of material geopolitical and macroeconomic
uncertainty. The Directors continue to monitor these risks and their plausible impact; however, the
potential severity is dependent upon many external factors and is difficult to predict.
Accordingly, the
financial impact of these risks may materially differ from the Directors’ current view.
At 31 March 2026, the Group reports net liabilities of £8.7 million (FY25: £11.8 million net liabilities)
largely attributable to the IAS 19 valuation of the UK defined benefit pension liability of £46.8 million
(FY25: £51.8 million).
Pension contributions are funded from cash generated by operations and have
been reflected in the cash flow and covenant forecasts reviewed by the Directors. Given that these
amounts are considered manageable by the Directors, the balance sheet presentation of net liabilities at
31 March 2026 does not imply an inability for the Group to meet its third-party liabilities over the going
concern period.
On the basis of the base case forecast and the severe but plausible sensitivity testing, the Directors
have determined that it is reasonable to assume that the Group will continue to operate within available
borrowing facilities available and adhere to the covenant tests to which it is subject throughout at least
the 12 month period from the date of signing the financial statements through to June 2027.
Accordingly, these financial statements are prepared on a going concern basis.
Ian Tichias
Chief Financial Officer
30 June 2026
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
25
Our people
Precision is a human discipline
The people who will deliver Precision 2030 and the safety, training and culture that hold
them to it. The capability competitors cannot copy is, in the end, the people in our buildings.
The transformation
Sustained safety record
A
74.1% reduction
in our incident frequency rate over the last four years, built
through successive Safety Week initiatives, “stop-work” authority embedded across
all eleven sites, and a culture where every colleague is accountable for the people
around them. The same discipline that makes the parts also keeps the people who
make them safe.
This is the licence to do life-critical work.
For investors:
We have capability that is hard to copy, qualifications which take years to earn, outcomes that are difficult to replicate — all delivered by 907 people in eleven buildings. Their depth,
their tenure, and the safety culture that keeps them able to work is, in the end, our most important asset.
Engineering depth
The 907 comprises many specialist capabilities including engineers, technicians and scientists.
This is a precision business, and the bench is what wins the hardest briefs — not the marketing.
“Stop-work” authority
Every colleague, at every site, has the authority to stop a process if it isn’t safe. It is the operational
signal that says people come before output — and the foundation of the IFR result.
Talent pipeline and succession
A plan instituted in the year to strengthen execution capability – with strategic hires already
underway.
2.7
FY22 IFR
0.7
FY26 IFR
Employees by division
Employees by region
907
Employees
CTP |
787
Speciality |
97
Central |
23
3
Continents
United Kingdom |
318
North America |
244
Rest of world |
245
Rest of Europe |
100
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
26
Stakeholders and Section 172
Six stakeholders, one long view
The measures that track Precision 2030 by pillar, year on year. The trajectory matters as much as the level.
Capital, and confidence in the long term
Supply chain integrity is precision’s precondition
The validation of every part we make
Licence to operate, and where future talent lives
The capability is the people
A long-term obligation and a strategic lever
Shareholders
Suppliers and partners
Customers
Communities
Employees
Environment
How we engage
•
AGM — annual
•
Half-year and full-year results — semi-annual
•
Investor meetings and roadshows — continuous
•
Capital markets days — will be held in the future as warranted
How we engage
•
Commercial and payment reviews — continuous
•
Key supplier strategic reviews — annual
•
Joint qualification programmes — project-based
•
Prompt-payment commitment — standard
How we engage
•
Account teams and site visits — continuous
•
Co-development partnerships — project-based
•
Customer reviews — quarterly
•
On-site qualifications and audits — as required
How we engage
•
Local engagement at eleven sites — continuous
•
STEM and school programmes — ongoing
•
Commitment to an apprenticeship intake — annual
•
Local charitable activity — continuous
How we engage
•
Safety Week — annual
•
Site town halls — quarterly
•
“One Carclo” all-hands — annual
How we engage
•
TCFD reporting — annual
•
Carbon and energy audit — annual
•
Energy programme reviews — quarterly
•
Materials science (PFAS-free) — continuous
FY26 outcome
FY26 outcome
FY26 outcome
FY26 outcome
FY26 outcome
FY26 outcome
Read our Section 172 statement on page 78
ROCE 28.9% · EPS 3x FY25
Refinancing partnership agreed and in place
GLP-1 platform delivered · Atellica scaled across
three continents
Commitment to STEM development,
14 Group-wide apprenticeship intakes and
sustained charitable initiatives
0.7 IFR - safety record maintained
98% UK renewable electricity — sustainable
material
in qualification
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
27
Responsible operations
Corporate social responsibility is central to our
operations and decision-making. We recognise
that our actions shape the experience of
employees, customers, suppliers and the wider
community, supporting the Group’s long-term
success and sustainability. Responsible practices
are integrated into every area of our business,
guided by clear principles and standards reflected
in our policies and values. We remain committed
to meeting the evolving expectations of our
stakeholders and strive to deliver sustainable
value through a responsible and ethical approach
in all that we do.
People
We recognise that our people are our greatest
asset and the foundation of our success. We value
their active involvement and are committed to
keeping them informed about issues that affect
them, as well as the financial and economic
factors that influence the Group’s performance.
The Board spends time at our sites and holds
roundtables with colleagues to hear directly from
them. To build on this, management is planning
to introduce an employee survey, giving us a
clearer understanding of employee sentiment and
feedback that will help us shape a better working
environment.
This year, we created a dedicated People
& Transformation function to strengthen
organisational capability and unlock greater
value through our people. By aligning talent,
leadership, culture and transformation with
business priorities, the function supports the
delivery of our strategy, enhances organisational
effectiveness and helps build the skills and
agility required for future growth. This integrated
approach enables stronger performance,
supports innovation and contributes to
sustainable long-term value creation for
shareholders.
In parallel, we have enhanced our approach to
talent attraction, introducing a more structured
and forward-looking Talent Acquisition model.
This focuses on clearly articulating our employer
value proposition, strengthening candidate
experience and applying consistent, high-quality
selection methods across the Group. This
more deliberate approach is already improving
our ability to attract and retain high-calibre
talent in key areas, while positively reinforcing
our reputation as an employer of choice in the
markets in which we operate.
Over time, this will support stronger
organisational capability, reduce hiring risk and
ensure we are well positioned to access critical
skills required to deliver our strategic ambitions.
Diversity and inclusion
We are committed to a global policy of
equality, fostering a working environment built
on respect and celebrating the diversity of
our employees. Our commitment embraces
differences in ethnicity, gender, language, age,
sexual orientation, religion, socio-economic
status, physical and mental ability, thinking style,
experience and education. We believe that this
diversity brings a range of perspectives, driving
innovation and supporting our business success.
We operate an Equal Opportunities Policy and
promote a healthy workplace that encourages
positive and productive relationships throughout
the organisation. Details of our gender
representation at Board, executive, senior
management and employee levels are provided in
the Nomination Committee report on page 60.
Recruitment, training, career development and
promotions are based on aptitude and ability,
without regard to disability. We are committed
to supporting employees who become disabled
during their employment by making reasonable
adjustments to their duties or work environment,
including retraining where necessary.
We believe every employee should be able to
work in a safe and healthy environment, free
from discrimination, bullying or harassment.
We maintain a Dignity at Work Policy and have
recently adopted a Sexual Harassment Policy
to further strengthen our commitment to a
respectful and inclusive workplace.
The Board considers it paramount that the Group maintains the highest ethical and professional standards in all its undertakings.
What’s in this section
People
28
Health, safety and wellbeing
29
Corporate responsibility
29
Environment
31
FY26 highlights:
•
Introduction of a dedicated People &
Transformation function to maximise
and unlock greater value through
our people.
•
Began implementation of a Group-wide
Annual People Cycle, introducing a
structured and data-driven approach
to performance, talent and succession
management.
Development and reward
We began the implementation of a Group-wide
Annual People Cycle, to create a more structured
and data-driven approach to performance,
talent and succession management. This will
strengthen organisational capability, support
strategic workforce planning and help build a
high-performing organisation equipped to deliver
future growth.
Through our performance process, we continue
to invest in the development of our employees
through a blend of formal and informal learning.
Training needs are assessed at both Group and
individual levels, ensuring we meet evolving
business requirements while supporting the
ongoing growth of our people.
Our approach to reward is aligned to our purpose
and strategic priorities. We maintain a consistent
framework, with pay informed by both internal
benchmarks and external market data, ensuring
reward structures appropriately recognise
performance and support our long-term
objectives.
Work is ongoing to further evolve our reward
structures in line with the strengthened HR
foundations being established across the
business, supporting greater global consistency
and alignment with emerging regulatory
requirements, including European Pay
Transparency. This includes the introduction of
a more consistent approach to job evaluation,
providing enhanced clarity, internal equity and
transparency, while enabling more effective
workforce planning and clearer career pathways
across the Group.
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
28
Responsible operations
continued
People
continued
Ethical policies
We recognise that a responsible culture is built on
clear principles and standards. At Carclo, these
are embedded in our ethical policies, including
our Anti-Bribery and Corruption Policy, Gifts
and Hospitality Policy, and Conflicts of Interest
Policy, all of which are reviewed annually. We are
committed to ensuring that every decision and
relationship upholds these standards.
This commitment is further supported by our
Whistleblowing Policy and Whistleblowing
Investigation Procedure, which outline how
concerns can be raised and the protection and
support available to those who do so. The Audit
& Risk Committee is responsible for overseeing
the effectiveness of our whistleblowing
arrangements.
Modern Slavery Act 2015
Carclo’s most recent Modern Slavery Statement
can be found at
carclo.co.uk
Health, safety and wellbeing
We place the highest priority on health and
safety, viewing the wellbeing of our people as
our greatest responsibility. This commitment
goes beyond performance measures and is
embedded in our mindset, guiding every action,
meeting and decision. Our dedication to zero
harm is demonstrated through visible leadership,
personal accountability, and a culture where
employees are encouraged and supported to
speak up.
Our Health and Safety Policy Statement
underpins a safe working environment and
reflects our responsibility not only to our
employees but also to customers, suppliers and
contractors. The policy is communicated clearly
across all levels of the Group.
We also support mental health and wellbeing
through a dedicated policy and by appointing
Health and Wellbeing Champion volunteers at
each site, including the introduction of Mental
Health First Aiders.
Corporate responsibility
Community involvement
We see the value our businesses can bring to
their local communities, and we encourage our
teams to make a positive difference in their
local communities through charitable initiatives.
Responsibility for these efforts sits with local
management, keeping our contributions direct
and meaningful. The examples below highlight
this support in action.
Carclo colleagues supporting
communities in the US
Empowering women
In celebration of International Women’s Day
and Women’s History Month in March, our US
colleagues demonstrated their commitment
to community support by volunteering
their time and donating personal hygiene
products to Women’s Interactive Network in
Pennsylvania. Their efforts contributed to
restoring dignity, confidence and stability for
individuals striving towards employment and
self-sufficiency. Carclo’s support highlights
the strength of partnership
in advancing women’s
empowerment.
Earth Day clean-up effort
Our Latrobe team celebrated Earth Day
with a community clean-up around the site.
Grassroots initiatives like this complement
our formal environmental commitments,
turning our responsible operations principles
into everyday action led
by colleagues
themselves.
Team spirit and
community
impact
In August 2025,
colleagues once
again pulled on the
team shirts for our
annual Local Parks
and Recreation Wiffle Ball
Fundraiser. The event brought the team
together for a little friendly competition
while raising funds to support local parks and
recreation facilities. It’s become something
our team looks forward to each year, providing
a chance to support a good local cause and
spend time together outside of work. At Carclo,
we actively encourage colleagues to get
involved in similar events and we understand
how much they can mean to our colleagues and
to the community around us.
The joy of giving
During the 2025 holiday season, colleagues
at our US site participated in the Marine Toys
for Tots programmes, an initiative by the US
Marine Corps Reserve that collects new toys
for children in need at Christmas. The team set
up collection boxes at the site and purchased
a variety of gifts, including children’s bicycles
and games, for families in the local community
and helped bringing the joy of
the holiday season to
disadvantaged
children.
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
29
Responsible operations
continued
Global social responsibility
We believe business success and social value
are interconnected, and we manage our supply
chain on that basis. Our centralised procurement
function provides suppliers with a single point
of contact and leads regular performance
reviews. Group-wide ethical standards, reviewed
annually, apply across all our operations, and our
Modern Slavery Statement is available at
carclo.co.uk
In April 2024 we secured a bronze EcoVadis
rating, which we use to benchmark responsible
practice across our supply chain. In the coming
year we will formalise our supplier onboarding due
diligence, further embedding transparency and
accountability.
Charitable donations
During the year, the Group also made charitable
donations totalling £4,475 in support of various
local communities.
It is the Group’s policy not to make political
donations and no such donations were made in
the year (FY25: £nil).
Community investment in India
Strengthening community
connections in the UK
During the year, our operations in India continued a long-
standing programme of community investment, building on
the schools constructed and supported in previous years. In
February, we opened a new local medical centre, improving
access to healthcare for the surrounding community. We also
continued to support the children's shelter that Carclo built and
handed to the community in 2024, which remains in operation.
These initiatives are managed locally, ensuring that investment
decisions are made close to the communities they serve.
Carclo's continued investment in India reflects its commitment
to supporting the long-term wellbeing of the communities
where we operate.
In May, our Mitcham leadership team spent time with Sutton
Community Works to see how they help build a safer, healthier
and more connected community through foodbanks,
community shops, homelessness support, Street Pastors and
wellbeing programmes for those facing hardship and isolation.
We were truly touched by the dedication of the volunteers, and
have shown our support by contributing to their utility costs and
providing additional food donations. Carclo is proud to partner
with Sutton Community Works.
Life-saving support from
our China team
Further abroad, our colleagues in China answered a local appeal
for blood donors by organising a voluntary blood drive at our
industrial park Taicang. The team came together to support a
cause that quite literally saves lives, with both first-time and
returning donors rolling up their sleeves to help meet an urgent
community need. Every participant received a “Carclo Cares”
certificate in recognition of their contribution. It’s
a powerful example of our people stepping
forward for their community
initiatives we’re proud to
support at Carclo.
Corporate responsibility
continued
Community involvement
continued
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
30
Responsible operations
continued
Environment
Environmental Policy
Our Environmental Policy is grounded in a
philosophy of continuous improvement, with
a clear commitment to reducing and, where
possible, eliminating negative environmental
impacts across our operations, while consistently
delivering high-quality products that meet our
customers’ needs.
Sustainability is integral to our approach and
is built into every stage of our processes, from
tooling design and material selection to energy
use and waste management. We strive not only to
comply with environmental laws and regulations,
but also to exceed local standards wherever
possible.
Our goal is to foster a culture of environmental
responsibility throughout the Group, engaging
employees, clients and suppliers in this shared
commitment. We also maintain proactive
communication with regulatory authorities to
ensure ongoing progress in our sustainability
efforts.
Implementation actions for our
Environmental Policy
Project Zelda, now in its third year, is Carclo’s
flagship sustainability initiative. Focused on
research and development, it aims to reduce
waste, enhance energy efficiency, and champion
sustainable resource management. While specific
details are confidential, the project underscores
our commitment to environmental responsibility
and innovation. EcoVadis, with its comprehensive
rating system, aids us in maintaining and elevating
our responsible business practices and we
incorporate these into the very heart of our
supply chain operations.
Noteworthy CO
2
footprint factors
Energy consumption:
We measure the energy intensity ratio of tCO
2
e
per £1 million of revenue from operations, as this
covers all the activities of the Group.
Material waste:
The percentage of materials procured that end
up as waste material outside of Carclo. We have
implemented waste-reducing measures across
our operations, continually improving our waste
reduction data collection.
Water usage:
Water consumption is monitored in absolute litres
per annum. We are implementing water-saving
measures throughout our operations, including
improving our consumption data collection.
Greenhouse gas emissions and
energy consumption
The Group is required to report its annual
greenhouse gas (“GHG”) emissions pursuant to
the Companies (Directors’ Report) and Limited
Liability Partnerships (Energy and Carbon
Report) Regulations 2018 (“Regulations”). The
2018 Regulations, known as Streamlined Energy
and Carbon Reporting, came into effect on 1 April
2019. We have collated data during the year to
31 March 2026 and are reporting emissions and
energy consumption for this period to coincide
with the Group’s financial reporting period.
We have restated the FY23 and FY24 emissions
data in order to apply the latest conversion
factors to this year’s collated data and to the
FY23 and FY24 data so that the reported
emissions are more accurate and comparable.
Further, we noted that the US data conversion
was previously based on lbs per kWh rather
than kg per kWh and therefore the tCO
2
e was
overstated by approximately 2.2 times. The
restatement corrects this error. The tables below
include the previously reported data and the
restated data.
We continue to be proactive in implementing
a diverse portfolio of energy management
initiatives, underscoring our commitment
to environmental sustainability. Building on
earlier conservation projects and investment
in transitioning from high-energy-consuming
hydraulic machines to fully electric alternatives.
Turning our attention to our factories’
energy-consuming infrastructure we have
initiated a programme to review our ageing
energy-inefficient factory plant with a view
to identifying potential modern replacements
where appropriate. These initiatives, combined
with our key business objective to transition our
manufacturing sites to 100% renewable energy
sources, helps us build cleaner, less wasteful
manufacturing operations.
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
31
Responsible operations
continued
Greenhouse gas emissions and
energy consumption
continued
Methodology and exclusions
We have reported on all the emission sources
required under the Companies (Directors’ Report)
and Limited Liability Partnerships (Energy and
Carbon Report) Regulations 2018. These sources
fall within our consolidated financial statements.
We do not have responsibility for any emission
sources that are not included in our consolidated
statement, other than those highlighted below.
This report is aligned with the GHG Protocol
methodology. The GHG Protocol establishes
comprehensive global standardised frameworks
to measure and manage greenhouse gas
emissions from private and public sector
operations, value chains and mitigation actions.
The framework has been in use since 2001,
and forms a recognised structured format, to
calculate a carbon footprint.
The total electricity conversion to CO
2
e is on
a location-based basis. Energy consumption
is expressed in kilowatt hours (“kWh”), as this
is the unit specified by SECR legislation. Defra
2024 emissions factors have been utilised
for UK sites and appropriate country-specific
emissions factors have been utilised for overseas
operations, using published emissions factors
by the United States Environmental Protection
Agency and the International Energy Agency.
Data has been collated from source
documentation or, where this has been
impracticable, using estimates.
Non-financial reporting and sustainability statement
We comply with the non-financial reporting requirements in Sections 414CA and 414CB of the Companies Act 2006.
The table below, and information to which it refers, is intended to help stakeholders understand our position on key non-financial matters.
Reporting
requirement
Policies and standards
which govern our approach
Risk management and
additional information
Environmental matters
Environmental Policy
Responsible operations report (page 31)
Employees
Health and Safety Policy
Stress, Mental Health and Wellbeing Policy
Dignity at Work Policy
Sexual Harassment Policy
Equal Opportunities and Diversity and Inclusion
Policy
Responsible operations report (page 28)
Human rights
Modern Slavery Policy and Statement
Ethical Policy
Responsible operations report (page 29)
Anti-corruption and anti-bribery
Anti-Bribery and Corruption Policy
Gifts and Hospitality Policy
Conflicts of Interest Policy
Whistleblowing Policy
Responsible operations report (page 28)
Statement of corporate governance (page 50)
Policy embedding, due diligence and outcomes
Principal risks and uncertainties (page 42)
Description of principal risks and impact of
business activity
Principal risks and uncertainties (page 42)
Description of the business model
Our business model and strategy (page 17)
Non-financial KPIs
Key Performance Indicators (page 19)
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
32
Task Force on Climate-related Financial Disclosures (“TCFD”)
Sustainability milestones and three-year ESG strategy timeline
EcoVadis Gold
SBTi validation
Mandatory UK SRS
FY29
Leadership and
UK SRS integration
FY30
Precision 2030
ready
FY27
Foundation and
structuring
FY28
Scale and
external
credibility
Strategic ESG and climate-related
disclosures
FY26 ESG performance highlights
At Carclo, operational excellence and
sustainability are inextricably linked. We are
moving beyond passive policy commitments to
deliver measurable, commercial impact across
our global footprint, directly supporting our
“Precision 2030” growth strategy. Performance
highlights include:
•
Safety First culture: a 74.1% reduction in
incident rates over four years, establishing
an industry-leading incident frequency rate
(“IFR”) of 0.7.
•
Decarbonisation and energy efficiency: a
21% reduction in carbon intensity (down to
72.1 tCO
2
e per £1 million of revenue), with
98% of electricity powering our UK and India
operations from renewables.
•
Operational resilience: Project Zelda continues
as our energy-efficiency and waste-reduction
flagship operational excellence programme,
across all regions and sites.
Strategic ESG integration
and UK SRS readiness
In FY26, Carclo fundamentally shifted its
approach to sustainability, starting the transition
from a policy-led compliance exercise into a
formalised, Board-governed three-year ESG
operating system. This structural upgrade is
embedded directly into our “Precision 2030”
strategic growth framework.
We recognise that operational ESG performance
and supply chain decarbonisation are no longer
just regulatory expectations; they are strict
commercial procurement gates for our top-tier
healthcare customers. By upgrading our ESG
data architecture and internal controls today,
we are protecting our competitive position in
regulated markets while ensuring the Group is
fully prepared for the mandatory, audit-ready
disclosures required by the incoming UK
Sustainability Reporting Standards (“UK SRS”).
Integrated risk and performance
metrics
Climate change is governed as a principal risk
under the direct oversight of the Audit & Risk
Committee. To avoid duplication, our complete
risk mitigation procedures are detailed in
the principal risks section (page 42), and our
performance data – including Scope 1 and 2
emissions, energy intensity and SECR compliance
– is consolidated in the ESG performance
dashboard (page 34).
In preparation for mandatory UK SRS reporting
and Provision 29 internal control declarations,
Carclo is upgrading its ESG data architecture to
financial-grade audit readiness. This includes a
formal Scope 3 emissions baseline in readiness
for the FY27 EcoVadis submission, satisfying
the decarbonisation mandates of our top-tier
healthcare customers and our future Science
Based Targets initiative (“SBTi”) trajectory.
EcoVadis Sprint
Scope 3 baseline
SBTi preparation
UN Global Compact
EcoVadis Silver
CDP disclosure
Climate scenario analysis
UK SRS readiness
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
33
Task Force on Climate-related Financial Disclosures (“TCFD”)
continued
ESG performance dashboard
Climate and resources
Greenhouse gas emissions
Year-on-year GHG emissions: location-based methodology:
Emissions from:
FY26
FY25
FY24
FY23
Percentage change:
FY23 to FY26
Scope 1 (tCO
2
e) Gas, fuel and industrial emissions
483
467
566
608
(20.6)%
Scope 2 (tCO
2
e) Electricity
7,746
10,115
12,228
13,950
(44.5)%
Scope 3 (tCO
2
e) Supply chain
Not reported
Not reported
Not reported
Not reported
Not reported
Total (tCO
2
e)
8,229
10,582
12,794
14,558
(43.5)%
Group revenue (£m)
114.2
121.2
132.7
143.4
(20.4)%
Intensity ratio (tCO
2
e per £1 million of revenue)
72.1
87.3
96.4
101.5
(29.0)%
Additional notes:
Environmental performance targets:
Carclo maintains, unless otherwise stated standard, annual performance improvements of 5% year on year.
Scope 3 emissions results:
Scope 3 emissions are not yet reported. We recognise the importance of understanding our value chain emissions, and work to establish a baseline is underway. We intend to report in this area as our data and
methodology mature.
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
34
Task Force on Climate-related Financial Disclosures (“TCFD”)
continued
ESG performance dashboard
continued
Climate and resources
continued
Energy consumption
Year-on-year energy consumption by region:
Consumption (by region) MWh:
FY26
(% of total)
FY25
(% of total)
FY24
(% of total)
FY23
(% of total)
Percentage
change:
FY23 to FY26
UK
14,554 (39)
16,563 (40)
16,697 (39)
15,458 (33)
(5.8)%
Rest of world
22,375 (61)
24,487 (60)
26,419 (61)
31,988 (67)
(30.1)%
Total Carclo Group
36,929 (100)
41,050 (100)
43,116 (100)
47,446 (100)
(22.2)%
Renewable sources (%)
Not reported
Not reported
Not reported
Not reported
Not reported
Emissions (by region) tCO
2
e excluding Scope 3:
UK
150
1,870 (18)
3,463 (27)
3,200 (22)
(95.3)%
Rest of world
8,079
8,712 (82)
9,331 (73)
11,358 (78)
(28.9)%
Total Carclo Group
8,229
10,582 (100)
12,794 (100)
14,558 (100)
(43.5)%
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
35
Task Force on Climate-related Financial Disclosures (“TCFD”)
continued
In conjunction with the launch of our
comprehensive three-year ESG strategy in
FY27, Carclo is upgrading its approach to
climate-related disclosures. While we continue
to report against the TCFD recommendations
for FY26, climate compliance is no longer
treated as a standalone exercise. Instead, we
are engineering our data, risk management
and Scope 3 supply chain baselining to prepare
for the upcoming mandatory UK Sustainability
Reporting Standards (UK SRS S1 and S2) and the
emissions requirements of our top-tier healthcare
customers.
Overall governance of climate
change at Carclo
Overall governance of climate change at Carclo
has evolved from a policy-led approach to a
heavily structured, Board-governed operating
system. The Board sets the Group’s ESG strategy
and risk appetite, ensuring it is inextricably
linked to our “Precision 2030” objectives and
commercial imperatives. Through the CEO and
CFO, the Board directs the newly formalised
ESG Steering Group and cross-functional
site leadership to identify, assess and manage
climate-related risks. Crucially, the Audit & Risk
Committee oversees these elements not as
standalone environmental issues, but as core
financial and operational risks embedded within
the Group risk management framework.
Climate and ESG matters are no longer just
subject to regular discussion; they are governed
by a formalised performance framework and
monthly site-level KPI tracking. Oversight
spans from advancing our Scope 3 supply
chain baselining – a critical requirement for our
top-tier healthcare customers – to optimising
operational resilience through Project Zelda. It is
the responsibility of the CEO and CFO to allocate
targeted capital to these initiatives, ensuring
Carclo systematically reduces its climate risk
exposure, improves external benchmark ratings
such as EcoVadis, and prepares our reporting
architecture for the mandatory UK SRS.
Recommended disclosure for climate–related risks and opportunities
TCFD pillar
Recommended disclosure
Status and UK SRS readiness
Reference
Governance
Describe the Board’s oversight of climate-related
risks and opportunities.
Fully aligned (existing controls pending upgrade
to meet UK SRS requirements).
Page 42
Describe management’s role in assessing and
managing climate-related risks and opportunities.
Fully aligned (existing controls pending upgrade
to meet UK SRS requirements).
Page 42
Strategy
Describe the climate-related risks and opportunities
identified over the short, medium and long term.
In progress: risk and opportunity mapping is being
refined as a formal part of the three-year ESG roadmap
(transitioning to UK SRS S2).
Page 38
Describe the impact of climate-related risks and
opportunities on the business, strategy and
financial planning.
In progress: climate impacts being systematically
integrated into the three-year ESG roadmap (transitioning
to UK SRS S2).
Page 38
Describe the resilience of the strategy under
different climate scenarios, including a 2°C or
lower scenario.
In progress: structured climate scenario analysis integrated
into the FY27-29 ESG roadmap to validate financial
planning resilience (transitioning to UK SRS S2).
Page 38
Risk
management
Describe the processes for identifying and assessing
climate-related risks.
Fully aligned (existing controls pending upgrade
to meet UK SRS requirements).
Page 47
Describe the processes for managing
climate-related risks.
Fully aligned (existing controls pending upgrade
to meet UK SRS requirements).
Page 47
Describe how these processes are integrated
into the organisation’s overall risk management.
Fully aligned (existing controls pending upgrade
to meet UK SRS requirements).
Page 37
Metrics and
targets
Disclose the metrics used to assess climate-related
risks and opportunities.
Fully aligned (existing controls pending upgrade
to meet UK SRS requirements).
Page 34
Disclose Scope 1, Scope 2 and, if appropriate,
Scope 3 GHG emissions, and the related risks.
In progress: Scope 3 measurement underway for
completion in FY27 (transitioning to UK SRS S2).
Page 34
Describe the targets used to manage
climate-related risks and opportunities, and
performance against them.
Fully aligned (existing controls pending upgrade
to meet UK SRS requirements).
Page 34
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
36
Task Force on Climate-related Financial Disclosures (“TCFD”)
continued
Retains ultimate accountability for the Group’s climate resilience. In FY27, approval of the new three-year ESG
strategy will shift focus from a policy-led approach to a measurable Board-governed operating system aligned
with the “Precision 2030” growth and sustainability objectives.
The Board
Oversees the integrity of the climate-related financial disclosures. In preparation for the mandatory UK SRS S1 and
S2 reporting and Provision 29 internal control declarations, the Committee actively monitors the enhancement of
the Group’s ESG data architecture and formalisation of climate risk within the broader corporate register.
Audit & Risk Committee
Directs the execution of the ESG strategy, championing the expansion of operational excellence initiatives such
as Project Zelda and mandating the integration of sustainability targets into the core business planning of the
CTP and Speciality divisions.
Chief Executive Officer
Enforces Supplier Code of Conduct, assesses supply chain ESG
risks, ensures supply chain emissions data compliance, and oversees
corporate ethics and compliance.
Member of the Executive Committee and Head of the OSG. Advises
and enforces ESG policy and its implementation throughout the
organisation.
Drives Carclo’s “Safety First” culture and ISO 45001 compliance,
tracking incident rates and employee wellbeing to ensure zero harm
and strong social performance.
Embeds climate risks into capital expenditure and financial planning
while ensuring our ESG data architecture meets audit-ready UK SRS
and internal control requirements.
Holds delegated responsibility for climate-related financial matters. Ensures that strategic ESG initiatives,
including Scope 3 supply chain baselining and renewable energy transitions, are adequately resourced and
integrated into the Group’s capital expenditure and financial planning.
Chief Financial Officer
Oversees the output and performance of operational sustainability and climate strategy, acting as a conduit between senior leadership and the
operational deployment of ESG policies, systems and procedures; including the setting of metrics and targets and assuming responsibility for the
resulting performance. Ensuring regulatory ESG compliance is a key responsibility for the Executive Committee.
Executive Committee
The OSG is the primary interface between site operations, their various related functions and the Executive Committee. Comprised of a single
representative from each site, the Group’s key responsibilities are to ensure ESG policies, systems and procedures are discharged at site level and
monitoring systems and data acquisition are retrieved from site.
Operations Sustainability Group (“OSG”)
Legal & Procurement
Sustainability Champion
Health & Safety
Executes site-level environmental initiatives such as Project
Zelda, focusing on energy efficiency, waste reduction, renewable
electricity transitions, and tracking monthly operational KPIs.
Operations
Finance
Group Risk Filter
Operational Risk Filter
Key:
Informing
Reporting
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
37
Task Force on Climate-related Financial Disclosures (“TCFD”)
continued
Our climate strategy and resilience
Our climate strategy
In FY26, Carclo started to transition its climate strategy from a policy-led approach to a heavily
structured, Board-governed operating system. Rather than treating climate risk in isolation, our
climate-related risks and opportunities are being systematically integrated into our “Precision 2030”
strategic growth framework.
Our plan for FY27 is to formalise a three-year ESG roadmap, the Board and the Executive Committee
direct a cross-functional ESG Steering Group to identify, assess and quantify climate factors across
varying time horizons. This structural upgrade ensures we are aggressively transitioning our data
architecture and risk management controls to meet the rigorous, audit-ready standards required by the
impending UK Sustainability Reporting Standards (UK SRS S2).
Our climate resilience
We recognise that climate change presents profound strategic risks and opportunities across our
global value chain, from energy-intensive manufacturing to complex international logistics. Carclo is
engineering climate resilience directly into its operational and commercial model to protect the delivery
of critical applications.
Our resilience is actively driven by Project Zelda, our flagship sustainability programme, which embeds
energy efficiency, renewable tariff transitions and waste reduction at site level. Recognising that our
top-tier healthcare customers require rigorous supply chain decarbonisation, we initiated a Scope 3
emissions baselining programme in FY26, with initial results ready for our FY27 EcoVadis submission.
While our current resilience is supported by these active mitigation programmes, we are committing
to a formal 2°C climate scenario analysis in FY28 to explicitly validate our long-term financial planning
resilience against UK SRS mandates.
Climate-related materiality reflects the broader financial implications and is as follows:
•
L – Low: potential to be notified by regulatory notices.
•
M – Moderate: potential to be reported, with damage to reputation.
•
H – High: potential to impact customer confidence and cause significant reputational damage.
Material risks and opportunities
Transitional risks
01.
Switching to renewable energy tariffs,
as part of the broader transition to a low-carbon economy, exposing the
Group to volatile energy pricing and the financial impact of incoming
carbon pricing regulations.
Expected time and
materiality:
Short to medium term
M
Financial:
The global transition away from fossil fuels exposes the Group to volatile energy pricing and potential future
carbon pricing mechanisms (such as the UK ETS or CBAM) in our energy-intensive manufacturing operations.
Direct increased costs for energy tariffs without efficiency offsets would compress operating margins.
Planning:
As a result of Project Zelda, we incorporated plans in our annual budget to enhance efficiency of our operations
and transition to renewable energy.
Current and planned mitigation:
Through Project Zelda, our flagship operational excellence programme, we are actively driving material cost
savings through energy efficiency and waste reduction. We are systematically transitioning our global footprint
to green energy, with our UK and India sites already operating close to 100% renewable electricity, and transitions
planned in the US and Czechia.
Opportunity:
Reduce our emissions to help meet our climate targets and remain competitive in the industry, while meeting the
expectations of our stakeholders.
Metric:
Energy intensity ratio (tCO
2
e per £1 million revenue) and percentage of renewable electricity procured by region.
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
38
Task Force on Climate-related Financial Disclosures (“TCFD”)
continued
02. Reduced availability
of high-demand key raw materials,
such as petrochemicals, may result in shortages and increase competition.
Expected time and
materiality:
Medium to long term
Financial:
We rely on key materials for production that are created through oil products. Reduced availability would
increase the direct cost of the material and intensify competition for it.
Planning:
Research into the development of new and existing products that use alternative materials to help reduce the
reliance on petrochemicals. The Executive Committee will discuss the investment required for using “edge of
change” technology. For example, in production we use a material called polyethylene vinyl acetate (“PEVA”)
and we are reviewing alternative materials that can help reduce the need for this petrochemical.
Current and planned mitigation:
We are implementing operational efficiency initiatives aimed at reducing raw material waste in production.
Through our Design & Engineering division, we are collaborating directly with customers on new product
development, actively researching alternative, lower-carbon materials to reduce our long-term reliance on
petrochemicals.
Opportunity:
Diversifying material options by developing alternatives to high-demand resources will enhance
supply chain
resilience, reduce operational risks, and ensure uninterrupted delivery of products to customers.
Metric:
We track water usage and product waste to evaluate material efficiency and identify opportunities to substitute
with more sustainable alternatives.
Material risks and opportunities
continued
Transitional risks
continued
03. A change in customer and
stakeholder expectations and behaviour,
resulting in missed business opportunities and decline in existing revenue.
Expected time and
materiality:
Short to medium term
M
Financial:
Top-tier healthcare OEM customers now explicitly require suppliers to track emissions and commit to SBTi
aligned targets by 2028. Operational ESG performance, via EcoVadis, acts as a strict procurement gate. Failure
to mature our ESG performance risks the loss of competitive bids and significant revenue from our largest
accounts.
Planning:
The Board has approved a comprehensive three-year ESG strategy shifting from a policy-led approach to a
measurable, Board-governed operating system.
Current and planned mitigation:
We have launched a formal ESG Steering Group to oversee an immediate EcoVadis improvement sprint
(targeting Silver/Gold) and has initiated a Scope 3 emissions baselining programme to meet customer
decarbonisation mandates.
Opportunity:
By leading in transparent supply chain decarbonisation and securing top-tier EcoVadis medals, the Group
achieves preferred-supplier status, fostering long-term strategic relationships and market share growth in the
regulated healthcare sector.
Metric:
EcoVadis overall and theme scores, and percentage of priority suppliers covered by the Group Supplier Code
of Conduct.
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
39
Task Force on Climate-related Financial Disclosures (“TCFD”)
continued
04. Evolving regulatory
and disclosure compliance,
resulting in failure to meet regulatory obligations.
Expected time and
materiality:
Short to medium term
L
Financial:
The transition from voluntary TCFD reporting to mandatory, audit-ready frameworks-specifically the UK
Sustainability Reporting Standards (UK SRS S1 and S2) and the UK Corporate Governance Code Provision 29
internal control declarations – requires financial-grade ESG data architecture. Failure to accurately quantify
and disclose climate-related financial impacts, including Scope 3 emissions, risks regulatory penalties, restricts
access to capital, and causes significant reputational damage among investors and customers.
Planning:
Initiation of a comprehensive three-year ESG strategy designed to shift from a policy-led approach to a
Board-governed operating system, explicitly structured to meet the incoming UK SRS implementation timeline
starting in FY27.
Current and planned mitigation:
An ESG Steering Group to oversee the transition of our climate and non-financial data into an audit-ready state.
We are actively upgrading our ESG data, formalising site-level KPI tracking, and treating ESG data controls with
the same rigour as our financial reporting to ensure Provision 29 and UK SRS compliance.
Opportunity:
By proactively adopting UK SRS standards and treating ESG data with financial-grade rigour ahead of
regulatory deadlines, the Group will enhance investor confidence and reinforce our “Precision 2030”
competitive edge as a highly trusted partner in regulated markets.
Metric:
Progress against the three-year ESG roadmap milestones, UK SRS gap analysis completion, and the
percentage of ESG metrics integrated into the formal internal controls testing framework.
05. Increase in global temperature,
resulting in reduced workforce productivity
and disrupted production equipment
.
Expected time and
materiality:
Short, medium and long term
Financial:
An increase in extreme heat events poses a direct threat to workforce safety and operational continuity. The
financial impact includes increased utility costs for facility cooling and water consumption, alongside the risk of
margin compression due to lower productivity or halted production shifts at high-risk sites.
Planning:
Working cross-functionally with the Health and Safety team, we actively monitor heat stress indices. We have
elevated employee health and safety to a core operational metric, supported by the global rollout of our “Cares”
digital hazard reporting platform to ensure real-time risk response.
Current and planned mitigation:
We are expanding Project Zelda across all regions to aggressively drive energy efficiency and offset increased
cooling demands. To eliminate the associated carbon impact, we are actively transitioning to 100% renewable
energy tariffs; our UK sites already operate on 98% renewable electricity, with transitions currently in motion for
the US and Czechia.
Opportunity:
By embedding a proactive “Safety First” culture and highly resilient facility infrastructure, the Group protects
its workforce and ensures uninterrupted production of critical healthcare components, reinforcing our status as
a highly reliable partner for top-tier OEMs.
Metric:
Incident frequency rate (“IFR”), energy intensity ratio (tCO
2
e per £1 million revenue), and percentage of
renewable electricity procured by region.
Material risks and opportunities
continued
Transitional risks
continued
Physical risks
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
40
Task Force on Climate-related Financial Disclosures (“TCFD”)
continued
06. Increased annual precipitation,
directly impacting sites, logistics and transport links.
Expected time and
materiality:
Medium to long term
Financial:
Severe precipitation and localised flooding threaten to render specific geographic sites (such as those in EMEA
and India) temporarily inaccessible or unworkable. Beyond direct site impact, extreme weather threatens
complex global supply chains, risking delayed raw material deliveries, emergency freight costs, and the inability
to ship finished medical products to customers.
Planning:
Under our evolving ESG risk management framework, we maintain targeted flood risk assessments for exposed
facilities in EMEA and India to protect our workforce and minimise asset damage.
Current and planned mitigation:
We are actively engineering supply chain resilience into our “Precision 2030” strategy by shifting towards
“in-region” manufacturing and dual-site resilience (spanning the US, EMEA and APAC) to minimise reliance
on vulnerable, long-distance global freight routes. At the site level, we also leverage extreme weather to our
advantage where possible, such as utilising harvested rainwater for production at our India facility to reduce
municipal water dependency.
Opportunity:
Global supply chain volatility has made regional resilience a non-negotiable procurement requirement for
major healthcare customers. By standardising our manufacturing platforms across global regions and localising
our material sourcing, we convert physical climate risk into a competitive advantage, offering our customers
unmatched supply security.
Metric:
Supply chain on-time delivery rates, volume of harvested rainwater utilised in production, and capital
expenditure allocated to site resilience.
07. Acute extreme weather events,
resulting in supply chain and logistics disruption.
Expected time and
materiality:
Short term
L
Financial:
Unlike gradual climate shifts, acute and unpredictable extreme weather events can cause sudden, catastrophic
disruptions to global supply chains. Financial impacts include immediate shortages of critical raw materials,
emergency “spot-buying” premiums, highly inflated expedited freight costs to bypass closed shipping routes,
and the potential loss of revenue if we fail to meet strict customer Service Level Agreements.
Planning:
Given the current global macroeconomic and environmental volatility, the Board and Executive Committee
monitor supply chain disruption as a top-tier operational risk. Our planning assumes that global supply volatility
is the new normal, making regional resilience a non-negotiable customer expectation.
Current and planned mitigation:
We are mitigating acute global supply shocks through our “Precision 2030” growth strategy, which
champions “in-region” manufacturing and optional dual-site resilience across our USA, EMEA and APAC
hubs. Furthermore, by standardising our manufacturing platforms across our global footprint, we are actively
increasing our flexibility to seamlessly transfer product manufacturing between sites if one specific region or
supply route is compromised by an acute weather event.
Opportunity:
By successfully engineering a supply chain that can absorb and bypass acute weather shocks, the Group
protects its margins from emergency freight costs and positions itself to win market share from competitors
who rely on fragile, single-source global supply lines.
Metric:
Premium/emergency freight spend, supply chain on-time delivery rates.
Material risks and opportunities
continued
Physical risks
continued
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
41
Principal risks and uncertainties
The Group operates a dynamic risk management approach in which risks associated with strategic objectives are regularly evaluated, prioritised
and considered within the assessment of principal risks. Principal risks are those that could have a material adverse effect on the Group’s
business model, future performance, solvency or liquidity, or the delivery of its strategic objectives.
The Board is committed to a culture of informed
risk-taking, where risks are identified, assessed
and managed in a systematic and proportionate
manner. This enables the Group to pursue
strategic opportunities with confidence, while
protecting value for all stakeholders and
maintaining the resilience of the business over the
medium to longer term.
Principal risks have been identified through
a structured top-down and bottom-up risk
assessment process, the details of which are set
out below. A more consistent approach to risk
measurement and reporting has been embedded
throughout the organisation during the year.
During the year, the Board undertook its annual
review of the Group’s principal risks, reaffirming
the continued relevance of the nine principal
risks identified in FY25 and identifying one
new principal risk: IT transformation, reflecting
the Group’s programme to transition to new
enterprise resource planning and quality
management systems. As a result, the Board has
identified ten Group principal risks for FY26.
The Board’s assessment of the overall risk
environment reflects both internal progress and
heightened external pressures. Geopolitical and
macroeconomic risk has increased, driven by
the escalation of global trade tariffs, ongoing
conflicts and heightened regional tensions.
Technology and cybersecurity risk remains a
sustained area of Board focus, reflecting the
increasing sophistication, frequency and potential
impact of cyber threats, including AI-enabled
threats, across the Group’s operations. The
treasury risk has decreased, reflecting the
successful refinancing of the Group’s primary
borrowing facility in April 2025, providing a stable
funding platform through to April 2028.
No material changes in risk level have been
identified for the remaining principal risks.
The Board is satisfied that the Group’s principal
risks remain aligned with its stated risk appetite
and that appropriate mitigating actions are in
place. Overall, while the external risk environment
has become more volatile, the Board considers
that the Group is well positioned to manage these
risks and maintain resilience over the medium to
longer term.
Emerging risks.
In addition to the ten
principal risks identified below, the Board
maintains procedures for the identification and
management of emerging risks, those that may
be less certain in their likelihood or impact but
carry the potential to become material over time.
Emerging risks are identified through the Group’s
risk assessment process, horizon-scanning
activities and regular management reporting,
including consideration of developments in
artificial intelligence, evolving sustainability
regulation, geopolitical fragmentation and
changes in the competitive environment. Where
an emerging risk is assessed as having become
sufficiently significant and certain in its potential
impact, it is escalated to principal risk status. The
addition of the IT transformation risk in FY26 is
one example of this escalation process.
Scope of disclosure.
The principal risks and
uncertainties set out in this section do not
comprise all risks and uncertainties that the
Group may face and are not presented in order of
priority. Additional risks not presently known to
the Board, or those currently assessed as remote
or less material, may also adversely affect the
Group’s business model, performance, solvency
or liquidity.
Viability and going concern.
In accordance with
the provisions of the UK Corporate Governance
Code, the Board has taken into consideration the
principal risks and uncertainties in its assessment
of the Group’s prospects and longer-term
viability, as set out in the viability statement
on page 49. The Board has also considered
these risks in the context of the going concern
assessment for the purposes of preparing the
financial statements.
Risk management framework
The Group operates a structured approach to risk
assessment to support effective identification,
evaluation and management of risks across the
business.
When assessing risk, management considers a
broad range of external factors, including legal,
regulatory, geopolitical, economic and ESG
considerations arising from the markets in which
the Group operates, as well as internal factors
relating to the nature of the Group’s activities, its
operational processes, organisational structure
and internal control environment. Risks are
evaluated on both a gross and net basis, enabling
a consistent assessment of residual risk exposure
after mitigation and supporting prioritisation and
management focus.
Business units and functional teams are
responsible for the day-to-day identification,
management and reporting of risks within
their areas of responsibility. This includes the
identification of new and emerging risks, with
matters escalated where appropriate to senior
management, the Executive Committee and
the Board. Risks are documented within risk
registers, together with their underlying causes,
existing controls and key mitigating actions. Each
risk is assessed on the basis of its likelihood of
occurrence and potential severity, having regard
to the Group’s strategic objectives, operational
performance, financial position, regulatory
compliance, reputation and people.
The Audit & Risk Committee formally reviews the
effectiveness of the Group’s risk management
framework and internal control systems on an
annual basis and reports its findings to the Board.
The Board’s confirmation that it has carried out
a robust assessment of the Group’s principal
and emerging risks is set out in the corporate
governance section on page 50.
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
42
Principal risks and uncertainties
continued
Risk management framework
continued
Three lines of defence
The Group operates a three lines of defence
model to support effective risk management,
internal control and governance across the
organisation.
First line of defence.
Business management
and operational teams are responsible for the
identification, management and escalation of
risks within their areas of responsibility. This
includes compliance with financial, legal and
ethical requirements, adherence to Group policies
and procedures, and the effective operation
of controls relating to security, quality, health
and safety. Operational teams are accountable
for following established risk management
processes and maintaining day-to-day control
effectiveness.
Second line of defence.
The Executive
Committee and senior management are
responsible for designing and embedding the
Group’s risk management framework and internal
control systems. They oversee risk exposures,
monitor the effectiveness of controls, develop
and maintain policies and control processes, and
conduct annual assessments of Group-level risks
to ensure risks are managed within the Board-
approved risk appetite.
Third line of defence.
The Board provides
strategic oversight by approving the Group’s
strategy, setting risk appetite and identifying key
strategic risks, and monitors risk management
through established Board and Committee
processes. The Audit & Risk Committee reviews
and assesses the effectiveness of the Group’s
risk management framework and internal control
systems on behalf of the Board.
Internal Audit provides independent assurance
over the adequacy and effectiveness of risk
management and internal controls across the first
and second lines of defence, reporting its findings
directly to the Audit & Risk Committee.
Risk categories and risk appetite
The Board determines the Group’s appetite
for risk, recognising that a prudent and robust
approach to risk assessment and mitigation must
be carefully balanced with a degree of flexibility
so that the entrepreneurial spirit and innovation
that contribute to the Group’s success are not
inhibited. Risk appetite is categorised across four
risk categories: Strategic, Operational, Financial
and Compliance. This framework operates as a
guide to management on the appetite applicable
to each category and helps set priorities and
levels of focus.
The Board has reviewed the Group’s appetite for
risk during the year and concluded that its overall
risk appetite remains unchanged from the prior
year. The Group is prepared to accept measured
and considered levels of risk in support of its
strategic objectives, including innovation, market
expansion and meeting evolving customer needs.
This is balanced by a disciplined and prudent
approach, ensuring that risks are understood,
appropriately controlled and aligned with
long-term value creation. The Group maintains
a zero appetite for risks to product quality and
health and safety, as these are fundamental to
the success of the Company’s products and the
safety of its people.
Strategic
Operational
Financial
Compliance
Moderate
– We are prepared to accept a moderate
level of risk in pursuit of innovation and market
expansion, while maintaining a focus on strategic
resilience and long-term stakeholder value.
Low
– We seek to maintain a solid financial position to
provide stability and value to all our stakeholders. We
accept limited financial risk where it is well understood,
appropriately managed and consistent with our
strategic objectives.
Very low
– We avoid risks that could put our
customers, employees, contractors or visitors in
danger. We seek to minimise operational disruptions
and maintain the highest standards of quality, safety
and delivery performance.
Zero
– We strive to comply with all applicable laws
and regulations in every jurisdiction in which we
operate, with particular focus on product safety, data
protection, modern slavery and the requirements of
the regulated markets we serve.
Risk categories and risk appetite
1st line of defence
2nd line of defence
3rd line of defence
Board
Audit & Risk Committee
Internal Audit
Executive Committee
and Senior Management
Operational Teams
Business Management
Informing
Reporting
Identification
1
Assessment
2
Mitigation
3
Reporting
4
Monitoring
5
Audit and Assurance
6
Risk management framework
Risk management process
Culture and
leadership
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
43
Principal risks and uncertainties
continued
Principal risks
The Board has identified ten Group principal risks for FY26. In FY25 there were nine Group principal risks; the new IT transformation risk reflects the Group’s programme to upgrade its core enterprise systems and
has been identified as a standalone principal risk given its scale, complexity and potential operational impact during the transition period. The following pages set out each principal risk together with the potential
impact, Board assessment and key mitigation measures in place. Each risk is categorised and a direction of travel indicator reflects the Board’s assessment of movement compared to the prior year.
01.
Treasury risk
Risk category:
Change:
Risk
Failure to effectively manage the Group’s liquidity, including cash generation and repatriation to Head Office,
resulting in an inability to meet financial obligations or maintain access to adequate funding facilities.
Impact
•
Inability to meet debt servicing, pension and other liabilities as they fall due
•
Risk of covenant breach or default under the Group’s primary borrowing facility
•
Reduced access to funding facilities and constrained financial flexibility
•
Increased financing costs adversely affecting profitability
•
Constrained investment capacity, limiting the Group’s ability to pursue growth opportunities
•
Failure of assessments demonstrating that the Group remains a going concern
Board assessment
The risk has decreased during the year following the successful refinancing of the Group’s primary borrowing
facilities in April 2025, which strengthened liquidity headroom and extended the maturity profile through to
April 2028. Enhanced cash flow forecasting, improved visibility over short-term and medium-term liquidity, and
continued proactive management of covenant compliance have increased the Board’s confidence in the Group’s
ability to manage its funding requirements under both base case and downside scenarios. The Board is satisfied
that the Group’s liquidity position and covenant headroom remain appropriate and that the risk of financial
distress has reduced materially compared to the prior year.
Mitigation
•
Regular cash flow forecasting and liquidity monitoring through a rolling 13-week cash flow forecast covering
all regions
•
Integration of cash flow forecasting into the annual budgeting and medium-term planning processes
•
Active management of covenant compliance and headroom, with monthly lender reporting and regular senior
management engagement
•
Centralised treasury and cash repatriation processes to optimise Group-wide liquidity management
•
Ongoing management of banking relationships and funding sources, including proactive refinancing activity
•
Downside scenarios and stress tests incorporated into going concern assessments and budget modelling
•
Foreign exchange risk managed through Group hedging policies and, where appropriate, forward contracts
Increased
Decreased
No change
New
Strategic
Operational
Financial
Compliance
02.
Operational execution
Risk category:
Change:
Risk
Inadequate operational execution, including deficiencies in process discipline, controls, capability or performance
management across manufacturing and supply-chain operations, resulting in failure to meet customer
requirements or deliver sustainable improvements in operational performance.
Impact
•
Manufacture and supply of non-conforming products that fail to meet customer or regulatory quality
requirements
•
Manufacturing cost escalation and reduced operational efficiency
•
Reputational damage and loss of customer confidence
•
Increased customer complaints, returns or remediation costs
•
Deterioration in profitability and cash flow performance
•
Risk to ISO 13485 certification and other quality accreditations critical to serving regulated end markets
Board assessment
The Board’s assessment of operational execution risk is unchanged from the prior year. While the Group has
made measurable progress in strengthening execution capabilities through strategic hires, targeted investment
in operational systems and the ongoing focus on manufacturing excellence, the inherent complexity of managing
a multi-site global manufacturing business means that this risk remains a sustained area of management
attention. The Board monitors operational KPIs and improvement initiatives closely, and considers that continued
investment in people, systems and process discipline will deliver further tangible improvements in operational
performance during FY27.
Mitigation
•
Continued focus on operational excellence, supported by targeted investment in people, systems and
manufacturing capability
•
Key investment projects regularly monitored by the Board, with oversight of progress, timing, cost and expected
benefit
•
Business units drive execution, preventative maintenance and local risk management, supported by operational
KPI reporting and regular risk management reviews
•
Strategic hires in operational leadership and capability development roles to strengthen execution and succession
planning
•
Quality management systems maintained in compliance with ISO 13485 requirements, supporting the Group’s
position in regulated medical and healthcare end markets
•
Regular ISO audits of key operational processes, with findings reported to the Audit & Risk Committee
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
44
Principal risks and uncertainties
continued
03.
Geopolitical and
macroeconomic uncertainty
Risk category:
Change:
Risk
The Group is exposed to geopolitical and macroeconomic uncertainty arising from conflict, political instability,
trade restrictions, inflationary pressures and changes in government and monetary policy across the markets in
which it operates. These factors may result in raw material cost volatility, supply chain disruption, extended lead
times and margin erosion.
Impact
•
Disruption to supply chains, logistics and customer deliveries
•
Increased input costs, including materials, energy, labour and import tariffs, and higher working capital
requirements from elevated inventory levels
•
Service level degradation due to extended lead times and customer relationship strain arising from pricing
actions
•
Margin and profitability pressure from sustained cost inflation and tariff-related headwinds
•
Increased geographic or customer concentration risk as a consequence of market disruption
•
Currency volatility adversely impacting reported financial performance
Board assessment
Escalating geopolitical instability, driven by the introduction and escalation of global trade tariffs (including
US tariff measures), ongoing conflicts in Ukraine and the Middle East, and heightened regional tensions across
multiple geographies, has led the Board to assess this risk as increased compared to the prior year. The potential
for further tariff escalation and supply chain fragmentation represents the most material near-term concern,
particularly given the Group’s exposure to globally traded materials and its manufacturing presence across
multiple jurisdictions. The Board continues to monitor developments closely and has taken a number of actions to
strengthen the Group’s resilience to these risks.
Mitigation
•
Ongoing assessment of geopolitical, macroeconomic and trade developments, supported by internal analysis
and external advisory input
•
Active monitoring of political, trade and regulatory developments across key markets, with contingency plans
in place including the use of alternative shipping routes and supply markets
•
Continued focus on operational effectiveness and efficiency to offset inflationary and tariff-related cost
pressures
•
Cash flow modelling and stress testing to assess liquidity resilience under adverse macroeconomic scenarios
•
Commercial dialogue with major suppliers to support continuity of supply and flexible contractual
arrangements, including tariff-related provisions
•
Geographic and customer diversity provides a natural hedge against localised disruption
•
Implementation and enforcement of customer surcharges and price increases, where appropriate, to mitigate
input cost pressures
•
Foreign exchange exposures managed through Group hedging policies
Increased
Decreased
No change
New
Strategic
Operational
Financial
Compliance
04.
Technology and cybersecurity
Risk category:
Change:
Risk
Inadequate operation and maintenance of resilient IT systems and infrastructure, coupled with insufficient
security measures, may result in loss of operational capability and increased vulnerability to unauthorised access
to systems or data. Such incidents could compromise operations, resulting in significant financial loss, regulatory
sanction and reputational damage.
Impact
•
Disruption to operations and business-as-usual activities, including delays during system outages or
transitions
•
Loss, corruption or unauthorised access to data, including financial and regulated quality data
•
Reduced accuracy and reliability of financial reporting
•
Regulatory non-compliance, including adverse audit findings and risk to ISO 13485 certification
•
Increased remediation, recovery and operational costs, alongside productivity losses
•
Damage to the Group’s reputation and stakeholder confidence
•
Exposure to AI-enabled cyber threats, including sophisticated phishing, social engineering and automated
attack vectors
Board assessment
The Board’s assessment of technology and cybersecurity risk is unchanged from the prior year, although it
remains an elevated and sustained area of Board focus. The Group has made meaningful progress during the year
in strengthening its cyber defences and governance framework, including enhanced multi-factor authentication,
improved incident response procedures and increased Board-level visibility of cyber risks. However, the growing
sophistication of cyber threats, including the increasing use of artificial intelligence by malicious actors, means
this risk requires continuous investment and vigilance. The parallel IT transformation programme (Risk 10)
introduces an additional layer of technology risk during the transition period, which is managed as a standalone
principal risk.
Mitigation
•
Implementation and maintenance of robust Disaster Recovery plans, with regular testing
•
Increased system resilience through proactive monitoring and timely security patching
•
Regular failover testing to validate recovery capabilities
•
Strengthening of identity and access management controls, including multi-factor authentication (“MFA”),
least-privilege access and role-based access controls
•
Deployment of endpoint protection, data loss prevention (“DLP”) and encryption controls
•
Regular backup validation and secure recovery procedures
•
Alignment of cybersecurity framework to NIST CSF requirements
•
Regular reviews of IT security controls
•
Maintained and up-to-date incident management and crisis management plans
•
Strengthened governance, Board-level reporting and Audit & Risk Committee oversight of cyber risks
•
Compliance with industry best practice recommendations
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
45
Principal risks and uncertainties
continued
05.
Customer concentration
Risk category:
Change:
Risk
The Group generates a significant proportion of its revenues from a limited number of large customers. The loss
of, or a material reduction in business from, one or more of these customers could have a significant adverse
effect on the Group’s financial performance and strategic delivery.
Impact
•
Significant revenue impact from the loss or reduction of business with a major customer
•
Cash flow volatility if a key customer underperforms, restructures or changes its sourcing strategy
•
Reduced bargaining power, leading to pricing or commercial pressure
•
Increased earnings volatility attributable to reliance on a limited customer base
•
Greater exposure to customer-specific strategic decisions, including programme changes, insourcing or new
supplier relationships
Board assessment
The Board’s assessment of customer concentration risk is unchanged from the prior year. Revenue concentration
among a limited number of major customers remains a structural feature of the Group’s business model and
continues to be actively managed through operational excellence, strong relationship management and a
targeted diversification strategy. The Board monitors customer concentration levels closely and is encouraged
by the progress made in deepening relationships with key accounts and the medium-term diversification strategy,
particularly in higher-growth regions such as APAC.
Mitigation
•
Operational excellence in cost, quality and delivery, supported by strong customer care and senior
relationship management, aimed at retaining key customers
•
Focused engagement with blue-chip multinational customers in the medical, electronics and aerospace
markets, providing credit quality and demand resilience
•
Medium-term diversification strategy, with particular focus on regions with higher concentration, including
APAC
•
Strategic focus on lower-attrition end-market segments, including healthcare, drug-delivery devices and
point-of-care technologies
•
Continued investment in production capability, tooling and process expertise to support long-term customer
programmes and increase switching costs
•
Structured senior-level customer relationship management, including regular formal engagement with key
accounts
Increased
Decreased
No change
New
Strategic
Operational
Financial
Compliance
06.
Pensions
Risk category:
Change:
Risk
Adverse movements in trading performance, cash generation or market conditions may reduce the Group’s ability
to meet funding commitments to its UK defined benefit pension scheme. Deficit volatility is driven by changes in
interest rates, inflation and asset values, with the potential to generate material additional funding obligations.
Impact
•
Increased cash funding requirements or the need for accelerated contributions to the pension scheme
•
Additional regulatory conditions or restrictions imposed by the Pensions Regulator
•
Constraints on capital allocation, financing flexibility and strategic activity
•
Adverse effect on the Group’s financial position and stakeholder confidence
•
Increased external support costs and management time associated with regulatory engagement
Board assessment
The Board’s assessment of pensions risk is unchanged from the prior year. The successful completion of the
triennial actuarial valuation and the agreement of a revised deficit recovery plan with the Scheme trustees
provides greater clarity over the Group’s long-term funding obligations. The deficit recovery plan, incorporating
fixed annual contributions through to 2037, provides a stable and manageable framework for addressing the
scheme deficit. The Board is satisfied that these obligations are sustainable and appropriately reflected within
the Group’s financial planning. Market volatility in interest rates and asset values continues to be monitored, and
the trustees’ investment strategy is managed with a view to reducing long-term funding volatility.
Mitigation
•
Triennial actuarial valuation completed, with a deficit recovery plan developed through active engagement with
Scheme trustees and professional advisors
•
Deficit recovery plan in place, incorporating a lump-sum payment and fixed long-term annual contributions
through to 2037
•
Ongoing engagement with Scheme trustees on funding strategy, investment and liability management initiatives
to reduce long-term funding volatility
•
Budget and long-term plans shared with trustees and lenders at regular meetings to support transparent
governance
•
Regular monitoring of Scheme funding position, investment performance and actuarial assumptions
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
46
Principal risks and uncertainties
continued
07.
Climate change
Risk category:
Change:
Risk
Climate change and the global transition to a lower-carbon economy create uncertainty for the Group’s
internationally operating, energy-intensive manufacturing operations, including exposure to physical climate
impacts, evolving regulatory requirements and increasing customer and stakeholder expectations for
sustainability performance.
Impact
•
Increased operating costs driven by rising energy prices, carbon charges and the need for capital investment
in low-carbon infrastructure
•
Operational disruption and supply chain interruptions arising from extreme weather and climate-related
events, including impacts on workforce productivity, site availability and logistics
•
Reduced customer demand or margin pressure where products or operations do not meet sustainability or
regulatory expectations
•
Adverse effects on the Group’s reputation and stakeholder confidence, including potential loss of new or
existing business opportunities
•
Regulatory and disclosure compliance risk arising from evolving sustainability reporting requirements,
including UK Sustainability Reporting Standards and the CSRD
Board assessment
The Board’s assessment of climate change risk is unchanged from the prior year. The Group continues to
develop its approach to climate-related risk management, supported by a TCFD-aligned assessment process
and external climate consultancy support. The anticipated introduction of UK Sustainability Reporting
Standards and potential obligations under CSRD represent areas of active monitoring and early preparation.
The Board recognises that physical and transition climate risks are relevant to the Group’s globally operating,
energy-intensive manufacturing business and is committed to strengthening the Group’s climate resilience and
disclosure framework over time. Further information is set out in the TCFD statement on page 33.
Mitigation
•
Climate-related risks and opportunities are assessed through a TCFD-aligned process covering both physical
and transition risks, with external climate consultancy support to ensure regulatory alignment and market
best practice
•
Climate risks are identified locally and reviewed centrally to ensure a consistent Group-wide response, with
Board oversight of climate matters and progress against agreed actions
•
Sustainability embedded through the Group’s Environmental Policy and Project Zelda, including initiatives to
improve energy efficiency and increase the use of renewable energy tariffs
•
Targeted measures in place to manage physical climate risks, including heat stress monitoring and flood risk
assessments at key sites, alongside actions to improve supply chain resilience
•
Ongoing development of climate metrics and targets, enhanced supplier ESG assessment, improved
EcoVadis performance and preparation for evolving regulatory and disclosure requirements, including UK
Sustainability Reporting Standards and CSRD
•
Further information on the Group’s approach is set out in the TCFD statement on page 38
08.
Compliance
Risk category:
Change:
Risk
The Group is exposed to the risk of non-compliance with applicable national and international laws and
regulations across the multiple jurisdictions in which it operates, including in the areas of anti-bribery and
corruption, competition law, data protection, modern slavery and labour law.
Impact
•
Financial penalties, fines, litigation and remediation costs
•
Potential loss of revenue, contracts or regulatory approvals
•
Reputational damage and loss of stakeholder trust
•
Inability to deliver the business strategy or enter new markets
•
Difficulty in attracting and retaining talent
•
Criminal liability exposure for Directors and senior management in the most serious cases
Board assessment
The Board’s assessment of compliance risk is unchanged from the prior year. The Group operates across multiple
jurisdictions and is subject to a broad and evolving range of legal and regulatory requirements. The Board
maintains a zero-tolerance approach to non-compliance, and the Group’s compliance framework continues to
be reviewed and strengthened to reflect legislative developments. Evolving data protection obligations, modern
slavery reporting requirements and developments in competition law across the Group’s key markets represent
areas of ongoing active management. The Board is satisfied that appropriate controls and policies are in place,
underpinned by a strong culture of integrity across the business.
Mitigation
•
The Board maintains oversight of Group-wide controls to ensure compliance with all applicable legal and
regulatory requirements, supporting the business’s growth and transformation programme
•
Whistleblowing procedures promote a strong culture of integrity and encourage employees to raise concerns
freely and without fear of reprisal
•
Scheduled risk management assessments to identify emerging regulatory and compliance risks, with actionable
mitigation plans developed as issues arise
•
Ongoing review of relevant legislative developments across all jurisdictions, with appropriate controls and
safeguards implemented in a timely manner
•
Use of experienced local management and, where appropriate, specialist external professional advisors to
manage jurisdiction-specific legal and regulatory requirements
•
Employment of qualified and experienced professionals in relevant compliance functions, including legal and HR
Increased
Decreased
No change
New
Strategic
Operational
Financial
Compliance
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
47
Principal risks and uncertainties
continued
09.
People
Risk category:
Change:
Risk
The Group’s ability to deliver its strategy and operate effectively depends on attracting, retaining and
developing appropriately skilled colleagues, as well as embedding the Group’s values and culture consistently
across all operations. Failure to secure and sustain the required talent and capabilities could reduce operational
effectiveness, increase compliance risk and adversely affect financial performance and reputation.
Impact
•
Skills gaps or loss of key talent in critical roles
•
Higher employee turnover and associated recruitment, onboarding and training costs
•
Reduced operational effectiveness and productivity
•
Increased risk of non-compliance with employment or regulatory requirements
•
Adverse impact on employee engagement, culture and the Group’s ability to attract future talent
•
Delays to strategic programmes requiring specialist expertise
Board assessment
The Board’s assessment of people risk is unchanged from the prior year. The appointment of a People &
Transformation Director and a Talent Acquisition Business Partner during the year represents a meaningful
strengthening of the Group’s HR and talent management capabilities. While labour markets remain competitive,
particularly for specialist manufacturing and technical skills, the Group has taken targeted action to improve its
talent attraction, retention and development capabilities. The ongoing review of the total reward offering and the
rollout of wellbeing initiatives demonstrate the Group’s commitment to being an employer of choice. The Board
continues to monitor people risk closely, recognising that the successful delivery of the Group’s strategy depends
fundamentally on its people.
Mitigation
•
Appointment of a People & Transformation Director and a Talent Acquisition Business Partner, strengthening
HR and recruitment capability across the Group
•
Ongoing review of the total reward offering across all countries, with identified improvements being
implemented where appropriate during FY26
•
Continued rollout of Employee Assistance Programmes and wellbeing initiatives across the Group
•
Ongoing review and development of the Group People strategy, defining key HR priorities for FY26 and
beyond
•
Embedding of Group values within recruitment and people processes to support a consistent, inclusive and
high-performance culture
•
Succession planning and development pathways maintained for critical roles across the Group
•
Further information can be found in the people section of responsible operations on page 28
10.
IT transformation
Risk category:
Change:
Risk
The Group is undertaking an upgrade of its Navision ERP system to Microsoft Dynamics 365 Business Central
to replace legacy platforms and improve integration across global operations. The scale and complexity of the
programme create a risk that technical issues, integration challenges, delivery delays or cost overruns could
disrupt business-as-usual activities and adversely affect operational performance. Effective programme
governance and execution will be required to ensure the programme delivers its intended benefits within
expected timelines and budget.
Impact
•
Disruption to business-as-usual operations during system implementation, particularly around go-live periods
•
Operational inefficiencies or service level impacts caused by technical or integration issues
•
Reduced quality of management information affecting timely and informed decision-making
•
Programme delays or cost overruns, increasing project expenditure above budget
•
Increased vulnerability to data migration errors or data integrity issues
Board assessment
This is a new principal risk for FY26, reflecting the Board’s decision to elevate the ERP transformation programme
to standalone principal risk status, given its scale, complexity and potential operational impact during the
implementation period. The Board and Audit & Risk Committee receive regular updates on programme progress,
including budget performance, delivery milestones and risk exposure. While the phased deployment approach
and comprehensive mitigation measures in place are designed to manage implementation risk carefully, the
Board recognises the inherent execution risk associated with a programme of this nature and will maintain close
oversight throughout the implementation period.
Mitigation
•
Phased, site-by-site deployment approach adopted to minimise operational disruption and enable learning
between deployments
•
Detailed cutover planning for each site, with defined fallback and rollback scenarios tested and rehearsed
•
Business subject matter expert availability and structured hypercare support in place post go-live
•
End-to-end process design validated with business owners before build, applying a fit-to-standard principle
to reduce customisation risk
•
Robust testing regime including system, integration and user acceptance testing scenarios
•
Data migration strategy incorporating multiple validation cycles and reconciliation checkpoints to protect
data integrity
•
Dedicated Business Central Consultant supporting throughout the project and post go-live
•
Standardised reporting model developed using Power BI and ERP-native reporting capabilities
•
Regular programme financial tracking against budget, with early review of cost variances and formal
escalation processes
•
Programme governance structure with defined Board and Audit & Risk Committee reporting cadence
Increased
Decreased
No change
New
Strategic
Operational
Financial
Compliance
The principal risks and uncertainties described in this section should be read in conjunction with the
viability statement (page 49), the going concern disclosure in the financial statements, and the TCFD
statement (pages 148 to 149 and page 33).
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
48
Viability statement
In accordance with Provision 31 of the UK Corporate Governance Code, the Board has assessed the
prospects and viability of the Group over a three-year period to 31 March 2029. They selected this
period because it corresponds to the Group’s detailed planning horizon and to the period over which
customer programmes, capital plans and pension funding can be forecast with reasonable confidence.
In making their assessment, the Directors considered the Group’s current financial position, liquidity,
financing arrangements and pension funding obligations, together with the principal risks and
uncertainties set out on page 42. Further detail on the Group’s financing arrangements, covenant
framework and pension funding commitments is provided in the going concern statement on pages
148 to 149. The assessment was based on the Board-approved medium-term plan and used the same
financial forecasts as the going concern review, extended across the full three-year period.
The Directors modelled a series of severe but plausible downside scenarios, each derived from the
principal risks. These covered the loss of a major customer programme, sustained margin compression,
a broad downturn in demand combined with adverse currency and input cost movements, and a
significant operational interruption. The scenarios were tested individually and in combination. The
Directors also carried out a reverse stress test to identify the deterioration in performance that would
be required before the Group’s banking covenants were breached or its available liquidity exhausted.
The reverse stress testing indicated that a materially greater deterioration in performance than that
assumed in the severe but plausible downside scenarios would be required before covenant compliance
was threatened or available liquidity exhausted. The Directors concluded that a deterioration of that
scale was not plausible over the assessment period.
In each scenario the Directors took account of the mitigating actions available to management, which
include the deferral of discretionary capital expenditure and flexing of the cost base.
The Group’s committed borrowing facility matures in April 2028, within the assessment period.
The Directors’ assessment assumes that this facility is refinanced on broadly comparable terms ahead
of maturity. The Directors consider this assumption to be reasonable, having regard to the Group’s
financial position, its relationship with its lender and the improvement in financial performance over
recent years.
Based on this assessment, the Directors have a reasonable expectation that the Group will be able to
continue in operation and meet its liabilities as they fall due over the three-year period to 31 March 2029.
The strategic report was approved by the Board on 30 June 2026 and signed on its behalf by:
Frank Doorenbosch
Ian Tichias
Chief Executive Officer
Chief Financial Officer
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
49
Chair’s introduction to governance
The statement of corporate governance practices set out on the following pages, including the reports of Board Committees
and any information incorporated by reference, constitutes the corporate governance report of Carclo plc.
Dear shareholder
On behalf of the Board, I am pleased to present
Carclo plc’s corporate governance report for the
year ended 31 March 2026. The Board continues
to drive high standards of governance across the
Group, and this report explains how we discharge
our governance responsibilities and apply the
principles of the UK Corporate Governance Code
2024 (the “2024 Code”), with which the Company
now fully complies. Our statement of compliance
with the 2024 Code is set out on this page.
The Board’s main role is to provide oversight and
leadership of the Group, to determine and ensure
the implementation of the Group’s strategy, and
to maintain the highest standards of corporate
governance. Underpinning these aspects of the
Board’s responsibilities lies the principal aim of
ensuring the sustainable, long-term success of the
Company. The Board understands the relationship
between the Company’s purpose, strategy and
values and their importance to the long-term
success of the Group. The Board oversees and
monitors our culture to enable the Board to be
satisfied that it aligns with the Group’s purpose,
values and strategy and is reflected consistently in
our workplace policies and practices.
The Board and its Committees acknowledge the
benefits of diversity, including that of gender
and ethnicity. The Senior Independent Director
and Audit & Risk Committee Chair is Rachel
Amey, and Natalia Kozmina continues to lead
the Remuneration Committee. They both bring
broad cross-functional expertise. With Ian Tichias
having completed his first full year as CFO, the
Board is well constituted, and I am confident the
Board has the experience and capability to guide
the Group forward.
The structure, diversity and composition of the
Board remains under review to ensure that we have
the appropriate mix of skills and experience to best
serve a dynamic, growing international company.
During the year, the Board engaged a reputable
external advisor with expertise in leadership, board
effectiveness, governance, culture and strategy
to facilitate a comprehensive review. The review
found that the Board and its Committees are
operating effectively, while also highlighting
opportunities for improvement. An action plan is in
progress to address the issues raised.
The Directors consider various factors when
making decisions, considering the interests of our
stakeholders. The Board undertakes stakeholder
engagement directly with the workforce and
with shareholders and advisors. This takes place
through face-to-face sessions conducted by
the NEDs throughout the year with employees
to discuss business dynamics and operational
challenges. Face-to-face dialogue was also
held with key advisors together with targeted
engagement with investors involving (at separate
times) the Chair, CEO and CFO.
The Board believes that these meetings have
been important in setting the Group’s strategic
direction, across various regions (with different
cultural approaches), reflecting factors such as
cost inflation pressures, geopolitical challenges
and staff retention/hiring considerations.
The Board is well placed to guide the Group
through its next phase of growth, with Directors
bringing the depth of experience and capability
the business demands.
Joe Oatley
Non-Executive Chair
30 June 2026
Statement of corporate
governance
The Company remains committed to the
highest standards of corporate governance,
for which the Board is collectively
accountable. Throughout the year, the
Company complied with the main principles
and provisions of the 2024 Code
1
.
We are pleased to report that each of
the non-compliances identified in last
year’s report under Provisions 11, 24
and 32 have now been fully resolved.
Natalia Kozmina has served as Chair
of the Remuneration Committee since
1 May 2024 and, having now completed
more than twelve months in that role,
the Company is compliant with Provision
32. The Audit & Risk Committee is now
comprised of solely our two independent
Non-Executive Directors, Rachel Amey
and Natalia Kozmina, while fellow Board
members are in attendance at each
Committee meeting, satisfying Provision
24 for a smaller company
2
. The Board now
consists of two Executive Directors and
two independent Non-Executive Directors,
and the independent Non-Executive Chair,
ensuring full compliance with Provision 11.
1.
Save for Provision 29 as the application would take
effect in the 2027 annual report and accounts.
2. A smaller company, as defined under the UK
Corporate Governance Code 2024, is one that
remains below the FTSE 350 throughout the year
immediately prior to the reporting year.
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
50
Our Board
The Board is collectively responsible for the management of the Company. The Board’s main
role is to create long-term value for shareholders by providing entrepreneurial and prudent
leadership of the Company. It does this by setting the Company’s strategic aims and overseeing
their delivery, ensuring that the necessary financial and other resources are available, and by
maintaining a balanced approach to risk within a framework of effective controls.
Board membership
As at 31 March 2026, the Board comprised the Non-Executive Chair, the CEO, the CFO and two
independent Non-Executive Directors.
The Chair and each Non-Executive Director were independent on appointment and the Board considers
the Non-Executive Directors to be independent in accordance with the 2024 Code.
Roles and responsibilities
The Chair has primary responsibility for leading the Board and ensuring its effectiveness. He sets the
Board’s agenda and ensures, together with the Senior Independent Non-Executive Director, that all
Directors can make an effective contribution.
The CEO has responsibility for all operational matters and the development and implementation of
Group strategy approved by the Board.
Board and Committee changes
There were no changes in the past financial year.
Conflicts of interest
In accordance with the Companies Act 2006, Directors must seek authorisation before accepting
any position that could conflict with the Company’s interests. The Board regularly reviews actual and
potential conflicts, and the Company Secretary maintains a register that is reviewed annually.
The Board
Nomination
Committee
Remuneration
Committee
Audit & Risk
Committee
Oversees financial
reporting to ensure the
Group’s systems provide
accurate information for
published accounts.
Assesses the
effectiveness of internal
controls, risk management,
the need for internal
audit, and the work of the
external auditor.
Reviews whistleblowing
arrangements.
Reviews the composition
and balance of the Board
and its Committees to
ensure Carclo has the
necessary structure, skills,
diversity and experience
for effective management.
When a new appointment
is needed, the Committee
defines the required
role and capabilities and
proposes candidates to the
Board.
Manages Board
effectiveness reviews.
Reviews management
training and succession
planning for senior
executives.
Oversees and, where
appropriate, recommends
Carclo’s overall
Remuneration Policy and
strategy to the Board,
ensuring incentives align
with the Company’s growth
strategy, reward, culture and
employee pay when setting
Directors’ remuneration.
Determines remuneration
for Executive Directors and
certain senior executives.
Each Committee plays a key role in supporting the Board to maintain high standards of corporate
governance across the Group. Only Committee Chairs and members are entitled to attend Committee
meetings, though others may be invited as required.
The authorities and duties of the Board and its Committees, along with the roles and responsibilities
of key Board members, are clearly documented, reviewed and approved annually by the Board, and are
available on the Company’s website
carclo.co.uk
Male |
40%
Female |
40%
Prefer not to say |
20%
>5 years |
33.3%
<5 years |
66.7%
Board gender diversity
Non-Executive Board tenure
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
51
Our Directors
Joe Oatley
Non-Executive Chair
Joe was appointed a Non-Executive
Director of the Company from July
2018 and served as Chair of the
Remuneration Committee from that
date until April 2020. He served as
interim Non-Executive Chair from
April to September 2020 and was
appointed as the Senior Independent
Director on 30 September 2020.
He was appointed Non-Executive Chair
on 6 November 2022.
Skills and experience
Joe recently stepped down from
his position as Deputy Chair of
Wates Group Limited following nine
years on that Board and has been a
Non-Executive Director at Centurion
Group Limited since 2019. From 2012
to 2018 he was Group Chief Executive
of Cape plc, a global FTSE-listed
company specialising in the provision
of critical industrial services. Prior to
joining Cape he was Chief Executive
of Hamworthy plc, a global oil and gas
engineering business, from 2007 until
its takeover by Wärtsilä in 2012. Joe
spent the early part of his career in the
engineering sector in a broad range
of roles, including Managing Director
of a number of different businesses,
strategy development and M&A.
External appointments
•
Centurion Group Limited
– Non-Executive Director
N
R
Frank Doorenbosch
Chief Executive Officer
Frank was appointed a Non-Executive
Director of the Company on 1 February
2021 and Chair of the Remuneration
Committee from 30 April 2021.
After a short period acting as a
consultant to the CTP Division, Frank
was appointed as CEO of Carclo plc on
6 October 2022.
Skills and experience
Frank worked in senior positions at
RPC Group plc, a leading supplier
of film and packaging solutions.
His comprehensive experience
encompasses operations, finance, sales
and marketing, along with managing
operations throughout the EMEA and
APAC regions. From 2016 to 2019,
he held the position of CEO at RPC
bpi group, where he was instrumental
in driving significant turnarounds
and strategic reorientations in the
plastic packaging sector. Frank has
consistently championed environmental
sustainability and the adoption of
alternative processes and materials that
minimise ecological footprints.
External appointments
•
Thingtrax Limited – Non-Executive
Director
•
Impact Recycling Limited –
Non-Executive Director
•
Plastic Science by Design –
Managing Partner
Rachel Amey
Independent Non-Executive and
Senior Independent Director
Rachel was appointed a Non-Executive
Director of the Company on 1 March
2023 and was appointed Chair of the
Audit & Risk Committee on 21 August
2023. She was appointed as interim
Senior Independent Director from
21 August 2023 to 31 January 2024
and was re-appointed to this position
permanently on 28 February 2024.
Skills and experience
Rachel trained as a chemical engineer
and subsequently qualified as a
Chartered Management Accountant.
Rachel currently works as Chief
Operating Officer at British Engines,
a global engineering group based in
Newcastle upon Tyne, and previously
held a variety of financial positions
with Smiths Group plc from 2000 to
2008 and Cape plc from 2008 to 2015,
including interim Chief Finance Officer
from September 2012 to December
2012. Rachel was Group Financial
Controller for LSL Property Services
plc from 2016 to 2020 and Director of
Finance & Operations at the Newcastle
upon Tyne Royal Grammar School
from October 2020 to April 2025.
She has substantial listed company
experience as well as having IPO and
M&A experience both in the UK and
internationally.
External appointments
•
British Engines Limited – COO
•
Director of various subsidiaries with
the British Engines Group
Natalia Kozmina
Independent Non-Executive
Director
Natalia was appointed a Non-Executive
Director of the Company on 22 April
2024. She was appointed Chair of the
Remuneration Committee from 1 May
2024.
Skills and experience
Natalia is a global business executive
with a proven track record of leadership
across medical devices, life sciences
and technology sectors with a particular
focus on HR and remuneration matters.
She brings extensive US, UK and
international operational and strategic
experience, which she gained from
a range of FTSE and Fortune 100
companies. Currently, Natalia is Chief
Human Resources Officer for LivaNova
plc, a global medical devices business
that focuses on neuromodulation and
cardiac surgery technologies. Prior to this
role Natalia was Executive Vice President
and Chief Human Resources Officer
for Convatec Group, a FTSE 100 global
medical technologies business, where
she also led the ESG strategy. Natalia’s
executive career also includes significant
tenure across general management,
sales and marketing roles leading global
customer-centric businesses through
rapid scale-up, large-scale M&A and
spin-offs, and operating in complex,
highly regulated industries.
External appointments
•
Chief Human Resources and
Corporate Communications Officer –
LivaNova plc
Ian Tichias
Chief Financial Officer
Ian was appointed Chief Financial
Officer on 1 April 2025.
Skills and experience
Ian was previously the Chief Financial
Officer at Xaar plc where he drove a
financial turnaround and significant
systems and controls improvements
over a period of more than four years.
He brings strong experience as a
finance leader in both listed and private
businesses. His experience spans both
small, agile, international multi-site
manufacturing operations and larger
companies with best-in-class systems
and processes. Ian is a fellow of the
Institute of Chartered Accountants in
England and Wales having qualified with
MacIntyre Hudson in 1996.
External appointments
•
None
Key to Committee membership:
A
Audit & Risk
N
Nomination
R
Remuneration
Committee Chair
N
R
A
N
R
A
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
52
Board and Committee activities
The Board meets at least seven times a year, with additional contact between meetings to progress
Company business. Senior executives below Board level are invited as needed to present and discuss
matters relevant to their areas.
The Board aims to hold at least one meeting each year at a manufacturing facility, including staff
interactions and management presentations to focus on regional aspects of the Group’s strategy.
This year, a Board meeting was held at the Jacottet Industrie site in Chartres, France.
The Board has a formal schedule of matters reserved for its decision, such as corporate strategy, annual
budgets, major capital expenditure, acquisitions and disposals. Directors receive briefing papers in
advance of meetings. New Directors complete a full induction and receive ongoing training and briefings
as needed. Directors may seek independent advice, and the Board evaluation process reviews specific
training or development needs.
During the year, attendance by Directors at scheduled meetings of the Board and its various
Committees was as follows:
Board
meetings
Audit & Risk
Committee
Nomination
Committee
Remuneration
Committee
Scheduled meetings
attended
Scheduled meetings
attended
Scheduled meetings
attended
Scheduled meetings
attended
J Oatley
8/8
5/5
1/1
3/3
F Doorenbosch
8/8
5/5
—
3/3
I Tichias
8/8
5/5
—
3/3
R Amey
7/8
5/5
1/1
3/3
N Kozmina
8/8
5/5
1/1
3/3
In the year ended 31 March 2026, the Nomination Committee met formally on one occasion. A standing
agenda item at every Board meeting is time for the Non-Executive Directors to meet without executive
management present. Since the three Non-Executive Directors represent the full membership of the
Nomination Committee, matters falling within the Committee’s remit were also considered during these
meetings. The Board is satisfied that this approach ensured appropriate oversight of nomination and
succession matters without duplication, and that the substance of the Committee’s responsibilities was
fully discharged across the year.
In addition to the formal Nomination Committee meeting, the Board held a further seven ad hoc Board
meetings during the year at which not all Directors were required to be present. Two ad hoc Audit & Risk
Committee meetings were also held.
In addition, the Non-Executive Directors met once without the Chair present, mainly to discuss the
Chair’s performance and remuneration.
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
53
The Board and its Committees: FY26 activities
Jacottet in Chartres, France
Board visit
During the year, the Board visited Jacottet
in Chartres, France, combining a Board
engagement with a site tour and time with
local management and employees. The
visit gave Directors first-hand insight into
the operation’s capability, people and
customer relationships, and strengthened
the Board’s oversight of strategy, culture
and performance across the Group’s
international footprint.
•
The Board conducted externally facilitated
evaluations continuously in the past two years.
Although not required for companies outside
the FTSE 350, it sees value in undertaking these
independent reviews.
•
Invited an external advisor to assess the
culture
of the Board and the wider organisation
through
open, interactive discussion.
•
Recognised strong relationships, open debate,
effective independent challenge and high
Director engagement.
•
Identified development themes — talent and
culture, operating model and Committee
effectiveness — now being progressed with the
advisor’s continued support.
•
Reviewed the effectiveness of the Group’s
system of internal control and risk management
for the year ended 31 March 2026.
•
Confirmed risk identification, evaluation and
management processes operated throughout
the year and to the date of approval.
•
Through the Audit & Risk Committee, oversaw
internal controls, the scope of internal control
activity and the external auditor’s work.
•
Planned wider control-environment reviews in
FY27 ahead of Provision 29 attestation.
•
Natalia Kozmina, the designated
Non-Executive Director for workforce
engagement, hosted a virtual roundtable in
February 2026.
•
Roundtable engagement with 16 employees
from sites across four countries, spanning
warehouse, production, quality, engineering,
logistics, finance and customer services.
•
Discussion covered strategy and
communication, personal development and
feedback, engagement and collaboration.
•
Committed to reflecting the themes raised in
the Group’s employee engagement strategy.
•
Met regularly with major institutional
shareholders, including post-results
presentations on performance, strategy and
outlook.
•
Made the Chair and Non-Executive Directors
available for separate discussions at any time.
•
Confirmed the 2026 AGM will be held in
Musselburgh — home of Bruntons — marking its
150th anniversary.
•
Broadcast the AGM and key presentations live
via LSEG Sparklive for remote participation.
•
Recognised the workforce as central to the
Group’s long-term success.
•
Deepened its understanding of workforce
experience through direct engagement.
•
Identified clear opportunities to strengthen
communication, personal development and
cross-Group collaboration.
•
Findings are shaping the people strategy —
building a culture of ownership, accountability
and opportunity at every level.
•
Engagement with employees through on-site
Board meetings.
Board evaluation & effectiveness
Accountability & audit
Engagement with the workforce
Relationship with shareholders
People & culture
Principal risks
8
9
Stakeholders considered
Employees | Shareholders
Principal risks
2
4
8
Stakeholders considered
Shareholders | Investors
Principal risks
2
9
Stakeholders considered
Employees | Communities
Principal risks
1
3
5
Stakeholders considered
Shareholders | Investors
Principal risks
2
9
Stakeholders considered
Employees | Communities
Key to principal risk
1
Treasury risk
2
Operational Execution
3
Geopolitical and Macroeconomic
Uncertainty
4
Technology and Cybersecurity
5
Customer Concentration
6
Pensions
7
Climate Change
8
Compliance
9
People
10
IT Transformation
See our principal risks, on page 42
See our stakeholders, on page 27
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
54
Audit & Risk Committee report
Rachel Amey
Chair of the Audit & Risk Committee
During the year, the Committee was chaired by
Rachel Amey. Rachel is a Chartered Management
Accountant and is currently Chief Operating
Officer at British Engines Limited, having previously
held a variety of senior financial positions with
Smiths Group plc, Cape plc, LSL Property Services
plc and the Newcastle upon Tyne Royal Grammar
School. As such, the Board considers that Rachel
has recent and relevant financial experience.
The Board is also satisfied that the Committee,
as a whole, has relevant sectoral competence as
required by the 2024 Code.
Dear shareholder
I am pleased to present the Audit & Risk
Committee report for the year ended
31 March 2026. This report provides an overview
of the Committee’s role and shows how our work
contributes to the success of the Group.
Annual statement by the Chair
of the Audit & Risk Committee
The Committee continued to scrutinise the
Group’s system of risk management and internal
controls, the robustness and integrity of the
Group’s financial reporting, and the scope,
effectiveness and outcomes of both the internal
and external audit processes.
The key responsibilities of the Committee are to:
•
review the appropriateness and application of
accounting policies and practices;
•
review financial statements, taking account of
accounting policies adopted and applicable
reporting requirements;
•
monitor the integrity, clarity and completeness
of the financial statements (half-yearly and
annual);
•
advise the Board on whether the content of
the annual report and accounts give a fair,
balanced and understandable explanation of
the Group’s performance, business model and
strategy over the relevant period;
•
oversee the internal controls of the Group and
the effectiveness of those controls;
•
monitor and review the effectiveness of any
internal audit function;
•
oversee and review the Company’s risk
management systems and the effectiveness
of those systems;
•
review and challenge judgements of
management in relation to the financial
statements;
•
review all matters associated with the
appointment, terms, remuneration,
independence, objectivity and effectiveness
of the external auditor, including the provision
of non-audit services, and review the scope
and results of the audit;
•
review the Group’s systems and controls for
the prevention of bribery;
•
review whistleblowing arrangements;
•
review the Committee’s terms of reference
and carry out an annual review of the
performance of the Committee; and
•
report to the Board on how the Committee
has discharged the aforementioned
responsibilities.
The Committee will continue to keep its activities
under review in the light of developing regulations
and best practice.
Composition
The Committee comprises all the Non-Executive
Directors excluding the Non-Executive Chair and
meets at least four times annually.
Meetings
Only Committee members are entitled to attend a
meeting. However, the Non-Executive Chair, CEO
and CFO are routinely invited to attend meetings.
Five meetings were held during the year, four of
which were scheduled and one was ad hoc.
Committee effectiveness
The Committee’s effectiveness was considered
as part of the Board evaluation process,
described on page 59.
Internal control and risk management
The Board has ultimate responsibility for the
Group’s risk management and internal control
framework to identify, manage and monitor risks.
The Board has delegated the responsibility for
overseeing management’s implementation of
these systems to the Audit & Risk Committee. In
order to support the growth of the business and
the implementation of Company strategies, the
Committee recognises the need to continue to
review the adequacy and effectiveness of our
control framework.
The drive for continuous improvement has
seen internal control procedures strengthened,
ensuring segregation of duties and
implementation of additional internal checks and
reviews. We continue to enhance our approach
to cyber security, which is identified as a key risk;
this includes active 24/7 international monitoring
by external expert providers, penetration testing
and updating our networks. The frequency of
cyber awareness training has been increased
and enhanced with completeness of training
monitored by the Executive Committee to ensure
coverage across the Group.
This approach of driving culture change sits
alongside existing legislation as issued by the
FRC.
Details of the Group’s emerging and principal
risks and uncertainties, together with the
mitigating actions, are set out on pages 42 to 48
of the annual report and accounts.
Internal audit
In line with the provisions of the UK Corporate
Governance Code, the Committee monitors the
need for an internal audit function. During the
year under review,
reflecting the programme of
internal control improvement described above
and the developing assurance framework, it
was decided to have an increased internal audit
testing programme. This will ensure that internal
controls are firmly embedded throughout the
Group to drive positive progress.
This decision remains under review, including the
potential establishment of a permanent internal
audit function.
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
55
Audit & Risk Committee report
continued
External audit
The Committee has responsibility for
recommending the appointment, re-appointment
and removal of the external auditor. The external
auditor’s appointment is reviewed periodically,
and the lead audit partner is rotated at least once
every five years.
Following Forvis Mazars LLP’s decision to
step down as external auditor for commercial
reasons after the year-end audit, the Audit &
Risk Committee commenced a competitive
tender process in accordance with Provision 25
of the UK Corporate Governance Code 2024. A
number of firms were approached to ascertain
their interest in the appointment and their
independence. In July 2025, a shortlist of four
firms actively participated in the tender process,
Forvis Mazars LLP did not participate. Each firm
submitted a formal proposal and presented to
the Committee and the senior management
team, taking advantage of the opportunity to
meet individually with key personnel as well as
visiting the manufacturing sites at Mitcham, UK
and Pennsylvania, US. Proposals were evaluated
against pre-defined criteria, including audit
quality, independence, technical competence and
sector expertise. HaysMac LLP was selected as
the preferred firm.
The Committee recommended the appointment
of HaysMac LLP to the Board, who accepted the
recommendation. The Committee confirms that
its recommendation was made independently,
without influence from any third party, and that no
contractual term of the kind referred to in Section
489 of the Companies Act 2006 was imposed
on the Company. Shareholders subsequently
approved the appointment at the 2025 Annual
General Meeting.
In November, the Committee noted that
HaysMac LLP raised no concerns, confirmed
the appropriateness of the going concern basis,
and commended management’s engagement.
Audit planning for the year ending 31 March
2026 progressed, with key workstreams and the
timetable established.
The Committee has an established policy for
determining the non-audit services that the
external auditor can provide where justified on
grounds of cost and related expertise and where
not impacted by potential conflicts of interest.
This prohibits the engagement of the external
auditor for certain non-audit services and
requires the approval of the Committee for any
permitted non-audit services. No approval shall
be given to any non-audit services prohibited
under the amendments to the Companies Act
2006 and the FRC Revised Ethical Standard
2019. The Committee has also adopted a policy
regarding the employment of former employees
of the external auditor. This allows the Committee
to satisfy itself that auditor objectivity and
independence are safeguarded.
The analysis of audit and non-audit fees for the
year ended 31 March 2026, and the nature of the
non-audit services provided, appear in note 6 to
the accounts. Non-audit fees totalled £35,000
(FY25: £46,000).
Significant issues related
to the financial statements
The Committee reviews accounting papers
prepared by management that provide details of
significant financial reporting issues, together
with reports from the external auditor prepared in
conjunction with the interim and full-year results.
In this context, the Committee assesses the
following, among other matters:
•
the quality and acceptability of accounting
policies and practices;
•
the clarity of the disclosures and compliance
with financial reporting standards and
relevant financial and governance reporting
requirements;
•
material areas in which significant judgements
or estimates have been applied or there has
been discussion with the external auditor;
•
whether the annual report, taken as a whole, is
fair, balanced and understandable and provides
the information necessary for shareholders to
assess the Company’s performance, business
model and strategy; and
•
any correspondence from regulators in relation
to our financial reporting.
These matters are also discussed with the external
auditor together with any other matters that
the auditor brings to the Committee’s attention
which, in the year to 31 March 2026, included the
impact of changes in accounting standards and
other financial reporting disclosures, impairment,
goodwill, going concern and reviewing the
appropriateness of accounting policies.
In addition, the Committee supports the Board
in completing its assessment of the adoption of
the going concern basis of preparing the financial
statements. The Directors prepare a viability
statement concerning the prospects of the
Company, as required by the 2024 Code. During
the financial year, the Committee reviewed the
approach taken by the Directors in preparing
the viability statement with due regard for wider
market practice and developing guidance. As a
result of that review, the Committee was satisfied
that the approach adopted was appropriate.
The viability statement for the financial year is
included on page 49.
The significant judgements considered by the
Committee where there was potential risk of
material misstatement were:
•
IAS 19 pensions liability.
The Company has a
defined benefit pension scheme with liabilities
of £129.7 million and assets of £82.9 million
as at 31 March 2026, resulting in a net
retirement benefit obligation of £46.8 million.
These numbers are sensitive to the main
assumptions used to calculate the deficit or
surplus on the scheme and the Committee
seeks confirmation that these assumptions are
appropriate.
•
Carrying value of goodwill.
The balance
of goodwill on the Group balance sheet
as at 31 March 2026 is £22.0 million. The
Committee seeks to gain assurance through
management’s review of “recoverable amount”
being the higher of “value in use” and “fair
value less costs of disposal” as the approved
and selected method in testing goodwill
valuation for impairment and that there are no
potential impairment or recoverability issues.
•
Asset impairment.
Where there has been
an “indicator” of impairment, the Committee
seeks to gain assurance through the work
undertaken by Group management when
determining the level of impairment and
estimates therein.
•
Revenue recognition.
The Committee has
supported management’s methodology and
application of revenue recognition applying
IFRS 15 guidelines across its portfolio of
contracts.
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
56
Audit & Risk Committee report
continued
Significant issues related to the
financial statements
continued
•
Parent company investment carrying
values.
Investments in subsidiary
undertakings total £23.6 million in the
Company balance sheet. The Committee
sought assurance through management’s
review of “recoverable amount” being the
higher of “value in use” and “fair value less
costs to sell” as the approved method for
testing investments in subsidiary undertakings
for impairment.
•
Going concern.
The Committee supported
the Board in its assessment of the adoption
of the going concern basis of preparing the
financial statements. As a result of that review,
the Board was satisfied that the approach
adopted was appropriate. A summary of
the approach and work undertaken by
management is disclosed in note 1.
•
Non-underlying items.
Certain items
during the period have been presented as
non-underlying as defined in the Group
accounting policy. Alternative performance
measures such as “underlying operating
profit” have been defined and applied to
identify a clear distinction between underlying
performance and financial performance after
accounting for non-underlying items.
•
Lease accounting.
Judgement has been
applied by management when determining the
level of expected certainty that a break option
within a lease will, or will not, be exercised and
when determining the imputed interest rate in
the calculation of lease liability at inception.
The Committee seeks to gain assurance from
management’s review and agrees with the
judgement applied.
•
Intercompany debt waiver and
distribution income.
The Committee
considered management’s assessment of the
accounting treatment of the waiver of the
intercompany balance owing to CTP Finance
NV. Significant judgement was required in
determining whether the transaction should
be recognised as a gain on extinguishment
of a financial liability under IFRS 9 or, having
regard to its substance, as distribution income
received from a subsidiary. The Committee
reviewed work performed by management to
review the supporting legal documentation,
the historical financing arrangements within
the Group, relevant accounting standards
and technical guidance, together with the
views of management and the external
auditor. Following this review, the Committee
was satisfied that the accounting treatment
adopted appropriately reflected the substance
of the transaction and the related disclosures
in the Company financial statements.
Other areas of judgement reviewed and agreed by
the Committee, where it concluded there was not
a risk of material misstatement, included:
•
Recognition of deferred tax assets.
Deferred tax assets are only recognised to
the extent that it is considered there are
sufficient taxable profits against which to
offset future tax deductions. No deferred tax
assets have been recognised in the UK entities
due to insufficient future profitability in the
short term. The Committee agreed with this
approach.
•
Effective interest rate.
Judgement has
been applied by management to determine
that interest payable on borrowings using an
approximation of the effective interest rate
was not materially different from that if the
effective interest rate had been applied. This
view is supported by the Committee.
The Committee considered whether the FY26
annual report, taken as a whole, was fair, balanced
and understandable and whether it provided the
necessary information for shareholders to assess
the Company’s position, performance, business
model and strategy. The Committee is satisfied
that, taken as a whole, the annual report is fair,
balanced and understandable.
Rachel Amey
Chair of the Audit & Risk Committee
30 June 2026
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
57
Nomination Committee report
Dear shareholder
I am pleased to present our Nomination
Committee report for the year ended 31 March
2026. The report provides an overview of the
Committee’s role and shows how our work
contributes to the success of the Group.
Composition
The Committee is comprised of all the
Non-Executive Directors. It is chaired by the
Non-Executive Chair, Joe Oatley.
Role of the Committee
The Committee is responsible for reviewing the
composition of the Board, including its structure,
size and diversity. It also oversees succession
planning for the Board and provides guidance
to the executive team on succession planning
for senior management positions. Additionally,
the Committee identifies and recommends
suitable candidates for Board membership when
vacancies arise. The Committee has applied the
2024 UK Corporate Governance Code provisions
in developing the Group’s succession planning
and appointment policies.
When considering an appointment, the
Committee evaluates the balance of skills,
knowledge, independence and experience within
the Board and prepares a detailed description
of the role and capabilities required. Internal
candidates are considered where appropriate.
The Committee also reviews the time required
from each Non-Executive Director and any other
significant commitments they may have. The
FY26 review confirmed that the Non-Executives’
time commitments remain sufficient to discharge
their responsibilities effectively. Based on the
Committee’s recommendations, Directors
submit themselves for election at the AGM
following appointment and thereafter annually for
re-election, in line with good governance practice.
Nomination Committee
activities in FY26
The Committee met once during the year.
Although not recorded as formal meetings of
the Nomination Committee, the members of
the Committee also meet without other Board
members present at the end of each Board
meeting and frequently address topics within
the Committee’s remit during those sessions.
Its key activities, which supported ongoing Board
renewal and alignment with the Group’s strategic
priorities, included:
•
a review of the Board’s skills, knowledge and
composition;
•
oversight of the external Board evaluation
process, including evaluation of all of the
Committees’ performance;
•
a review of the Committee’s terms of
reference;
•
Board succession planning; and
•
review of the Nomination Committee report
for inclusion in the annual report and accounts.
Board skills, composition
and succession planning
A key responsibility of the Committee is to ensure
that the Board maintains a balance of skills,
knowledge and experience appropriate to the
long-term operation of the business and delivery
of the strategy. As in past years, the Committee
has kept under review the composition of the
Board, including considering whether:
•
the Board contains the right mix of skills,
experience and diversity;
•
the Board has an appropriate balance of
Executive Directors and Non-Executive
Directors;
•
the composition of each Board Committee is
appropriate in terms of skills, experience and
applicable governance requirements;
•
the skills and experience which may be lost
when a Non-Executive Director retires from
the Board; and
•
the Non-Executive Directors are able to
commit sufficient time to the Company to
discharge their responsibilities effectively.
All the Directors have many years of experience
gained from a broad range of organisations.
They collectively bring a range of expertise and
knowledge of different business sectors to the
Board discussion and decisions which encourages
constructive, challenging deliberations.
Selection and induction
of new Directors
The Committee follows a formal process for the
recruitment of new Directors, both Executive
and Non-Executive. The Committee, in
conjunction with the Board, drafts a detailed job
specification and candidate profile. In drafting
this, consideration is given to the existing skills,
experience and knowledge of the Board along
with background. The strategic and business
objectives are a key consideration.
Upon appointment, new Directors participate in
a tailored induction programme, customised to
their experience and role. Co-ordinated by the
Company Secretarial team, the programme will
cover Directors’ duties, business operations, risk
management, governance, strategy, and include
site visits. Briefings from senior management and
external advisors, as well as access to key Board
materials and policies, will also be provided.
The search for a new
Non-Executive Director
As identified through our ongoing succession
planning, the Committee concluded during
the year that the time was right to appoint an
additional Non-Executive Director. In line with our
duties under Provision 17 of the 2024 Code, the
search has been undertaken and is guided by two
key priorities:
Diversity, skills and experience
The Board remains focused on ensuring that
its composition continues to evolve in step
with the business and the wider Group. In line
with the Board Diversity Policy, the Committee
places emphasis on ensuring there is diversity
of thought across the Board and therefore is
seeking an individual with a complementary
range of skills, experience, background and
perspectives, while also supporting diversity
and inclusion more widely.
Succession
With my total Board tenure approaching nine
years in July 2027, we are planning for Chair
succession well ahead of that date to ensure
continuity and a smooth transition when the time
comes.
Joe Oatley
Chair of the Nomination Committee
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
58
Nomination Committee report
continued
Renewal and re-election
If the Board appoints a Director, that Director
must retire at the first AGM following their
appointment. That Director may, if they so
wish, put themselves forward for election.
In accordance with the 2024 Code and the
Company’s articles of association, the Company
will continue its practice to propose all Directors
for annual re-election. Accordingly, all Directors
will retire at the forthcoming AGM and, being
eligible, will offer themselves up for re-election.
The Committee is satisfied that, following the
evaluation and review of the Board described
above, the Directors offering themselves
for re-election continue to demonstrate
commitment, management and business
expertise in their role and continue to perform
effectively.
The re-election of each Director is recommended
by the Board. Further information on the service
contracts for the Executive Directors and letters
of appointment for the Non-Executive Directors
is set out in the Directors’ remuneration report
from page 68 to 75.
Diversity
The Board recognises the value of diversity in
its broadest sense as an important element in
maintaining both the effectiveness of the Board
and its Committees and a competitive advantage.
Diversity of skills, background, knowledge and
experience, alongside other characteristics,
will be taken into consideration when seeking
to make new appointments to the Board and its
Committees.
All appointments are made on merit. The
Committee considers suitably qualified
candidates from as wide a range as possible,
assessing each against the skills, experience,
independence and knowledge needed to enhance
the Board and maintain the right balance across
its committees.
Characteristics such as age, gender, ethnicity,
religion, sexual orientation, disability and
socio-economic background are not determining
factors in our selection decisions. Appointments
are made based on suitability for the role and
the need to maintain the right composition and
balance of skills, experience, independence and
knowledge on the Board and its Committees.
The Board is committed to considering suitably
qualified applicants from the widest possible
pool, with no restrictions on any personal
or professional background, provided their
competencies and knowledge will enhance the
Board.
The link between diversity and performance
will always be proactively considered when
taking decisions regarding appointments and in
succession planning. The approach to diversity
demonstrated by the Board in relation to Board
and Committee appointments applies equally to
the wider workforce.
The Nomination Committee and the Board carefully considered the diversity-related reporting
requirements set out in the Listing Rules and recommended by the FTSE Women Leaders Review. In
relation to the Listing Rules targets set out under UKLR 6.6.6R (9), the position for the Company as at
31 March 2026 was as follows:
Target
Met?
Company position
At least 40% of the individuals on the Board are women
Yes
40%
At least one of the following senior positions on the Board is held
by a woman:
•
Chair
•
Chief Executive Officer
•
Senior Independent Director
•
Chief Financial Officer
Yes
Senior Independent Director
At least one individual on the Board is from a minority ethnic
background
No
0
The Directors remain committed to diversity across the organisation, including at Board level, and
will continue to make appointments based on merit, skills, experience and independence. All forms
of diversity are considered in recruitment and succession planning, and increasing minority ethnic
representation remains a priority, and search firms are expected to present a diverse pool of candidates
for all Board appointments.
Committee priorities for FY27
Looking to the year ahead, the Committee will:
•
continue to oversee the annual Board evaluation process;
•
provide guidance to the executive on succession planning for the Executive Committee
members;
•
appoint and onboard a new Non-Executive Director; and
•
ensure Executive management and Board put a renewed focus on succession planning for the
Executive Committee members.
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
59
Nomination Committee report
continued
Board, management and employee gender representation (as at 31 March 2026)
1
Number of
Board members
Percentage
of the Board
Number of senior
positions on the
Board (CEO,
CFO, SID and Chair)
Number in
executive
management
2
Percentage
of executive
management
Number in
senior
management
3
Percentage
of senior
management
Number of
employees
Percentage of
employees
Men
2
40
2
6
67
8
67
632
70
Women
2
40
1
3
33
3
25
275
30
Other categories
—
—
—
—
—
—
—
—
—
Not specified/prefer not to say
1
20
1
—
—
1
8
—
—
1.
Gender data is collected from the Board and the Executive Committee through annual declaration forms. Gender data for employees is collected through the Group’s payroll system.
2. Executive management comprises members of the Executive Committee but does not include the CEO or CFO, as they are included as Board members.
3. Senior management comprises members of the Executive Committee including the CEO and CFO.
Ethnicity representation (as at 31 March 2026)
1
Number of
Board members
Percentage
of the Board
Number of senior
positions on the
Board (CEO,
CFO, SID and Chair)
Number in
executive
management
2
Percentage
of executive
management
White British or other White (including minority-white groups)
2
40
1
7
78
Mixed/multiple ethnic groups
—
—
—
—
—
Asian/Asian British
—
—
—
2
22
Black/African/Caribbean/Black British
—
—
—
—
—
Other ethnic group, including Arab
—
—
—
—
—
Not specified/prefer not to say
3
60
3
—
—
1.
Ethnicity data is collected from the Board and the Executive Committee through annual declaration forms.
2. Executive management relates to members of the Executive Committee but does not include the CEO or CFO, as they are included as Board members.
Joe Oatley
Chair of the Nomination Committee
30 June 2026
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
60
Directors’ remuneration report
Annual Statement
Dear shareholder
I am pleased to present the Directors’
remuneration report (the “Report”) for the year
ended 31 March 2026.
The Report has three sections:
•
the Annual Statement, which summarises and
explains the major decisions and changes in
respect of Directors’ remuneration;
•
Directors’ Remuneration Policy; and
•
the Annual Report on Remuneration, providing
details of the remuneration earned by the
Company’s Directors in relation to the year
ended 31 March 2026 and how the Policy will
be operated for the year to 31 March 2027.
Composition
The Committee is comprised of all the
Non-Executive Directors. Each of the current
serving Non-Executive Directors was a member
of the Committee when Directors’ remuneration
was considered.
FY26 – performance and pay
Remuneration alignment to strategy
The remuneration framework implemented by
the Remuneration Committee is aligned to Group
strategy and aims to reward Carclo’s executives
based on performance, including the value
created for the Group’s shareholders.
Annual bonus
Frank Doorenbosch and Ian Tichias participated in
the FY26 annual bonus scheme, which was based
primarily on Group underlying EBIT performance.
Performance for the financial year resulted in a
total bonus pool of £1.2 million split between all
short-term incentive scheme (“STI”) participants.
There was a formulaic reduction (10%) applied in
respect of secondary metrics on safety based on
the safety trends. Both Frank Doorenbosch and
Ian Tichias received an annual bonus amounting
to 90.0% of their target bonus opportunities
for the year after the 10% reduction, equivalent
to 45.0% and 36.0% of salary respectively. The
Committee satisfied itself that these outcomes
were a fair reflection of the Group’s overall
performance for the year and, accordingly, did not
apply any discretion to these outcomes. Further
details are set out on pages 70 to 73.
Long-Term Incentive Plan (“LTIP”)
As explained in prior years, the current LTIP
scheme, the Carclo plc Performance Share
Plan (“PSP”), was reviewed in 2021 and it was
determined that it continued to meet the current
needs of the Company.
The PSP is designed to reward delivery of the
Company’s strategy and long-term goals, and
to help align the interests of executives and
shareholders. Awards were granted in FY24 to
the CEO and other senior management which are
intended to motivate and reward the leadership
team for the execution of a successful turnaround
for the Group; these awards were intended to
cover a three-year period and, accordingly, no
further awards were made in FY26 to those
who received awards in FY24. As a new joiner to
Carclo, Ian Tichias was granted in FY26 an LTIP
award of 750,000 shares which will vest subject
to performance conditions based on three-year
absolute TSR and FY28 EPS.
Operation of the Remuneration
Policy in FY27
The current Directors’ Remuneration Policy,
approved by shareholders at the 2025 AGM,
remains in effect. The Committee considers the
Policy appropriate, and no changes were made
during FY26 the Committee does not propose
any amendments to the Remuneration Policy for
FY27.
Salary increases for Executive Directors were
reviewed alongside pay rises for the wider
workforce and the Group’s overall performance.
As a result, the Chief Executive Officer’s base
salary was raised from £400,000 to £412,000,
and the Chief Financial Officer’s salary increased
from £280,000 to £288,400. Both represent
a 3% increase, in line with the UK inflation rate
and consistent with the overall workforce’s pay
adjustments for FY27.
Fees for Non-Executive Directors were also
reviewed; with the conclusion that there will
not be an increase in the base fees for the
Non-Executive Directors nor the Chair of the
Board. There will be no change to the Senior
Independent Director (“SID”) or Committee
Chair fees.
The maximum annual bonus for the CEO will
remain 100% of salary and for the CFO will remain
75% of salary as per the approved Remuneration
Policy. For FY27 the annual bonus will evolve
to include stretching non-financial strategic
objectives in addition to demanding financial
targets and will be subject to formulaic reductions
based on in-year safety and cash conversion
performance.
PSP awards in FY2027
The Committee intends to grant PSP awards to
the Executive Directors for FY27 in line with the
Directors’ Remuneration Policy. The detailed
terms of these awards, including the award levels
and the applicable performance conditions and
targets, had not been determined as at the date
of this report. Full details of the awards will be
published via RNS market announcement at the
time of grant.
Under the Plan rules, awards are normally
granted within the period of 42 days following
the announcement of the Company’s results.
Awards to Executive Directors will, as required by
the Plan, be subject to stretching performance
conditions measured over three financial years,
a two year post vesting holding period and the
malus and clawback provisions of the Plan.
Natalia Kozmina
Chair of the Remuneration Committee
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
61
Directors’ remuneration report
continued
Natalia Kozmina
Chair of the Remuneration Committee
30 June 2026
Compliance statement
This Report has been prepared in accordance with the requirements of the Companies Act 2006
(as amended), the Large and Medium-sized Companies and Groups (Accounts and Reports)
Regulations 2008 (as amended), the UK Listing Rules and applies the principles set out in the
2024 Code. The Group’s external auditor, HaysMac LLP, has audited the parts of this Report
identified as audited.
The following parts of the Annual Report on Remuneration are audited: the single total figure
of remuneration for Directors, including annual bonus and LTIP outcomes for FY26; scheme
interests awarded during the year; and Directors’ shareholdings and share interests.
Remuneration payments and payments for loss of office can only be made to Directors if they
are consistent with the approved Policy or otherwise approved by ordinary resolution of the
Company’s shareholders.
Alignment with shareholders
The Remuneration Committee is mindful of the interests of the Group’s shareholders and is keen to
ensure a demonstrable link between reward and value creation. In addition to the matters set out in
this Report, alignment with shareholder interests is further demonstrated by the operation of share
ownership guidelines and the inclusion of malus and clawback provisions for both annual bonus and
LTIP awards.
Most important, however, is the clear link between executive remuneration and the performance of the
business as a whole. The Committee seeks to ensure the executive remuneration “mix” is in line with the
Policy and in the best interests of the shareholders and the Company.
The Group values the support it has received from its shareholders to date and looks forward to
maintaining this constructive relationship going forward.
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
62
Directors’ remuneration report
continued
Directors’ Remuneration Policy
The Remuneration Policy for Directors is detailed below and was approved by shareholders at the 2025 AGM.
In developing the Policy, the Committee kept in mind the requirements of the UK Corporate Governance Code 2024 for clarity, simplicity, risk, predictability, proportionality and alignment to culture.
Policy table
Element of remuneration
Summary
Salary
Purpose and link to strategy
To provide an appropriate, competitive level of basic fixed income avoiding excessive risk arising from over-reliance on variable income.
To attract and retain Executive Directors of suitable calibre to deliver business performance.
Reflects individual skills and experience and role.
Operation
Reviewed annually by the Committee, normally effective 1 April.
The review is informed by individual experience and performance, Company performance, wider pay levels and salary increases across the Group, and relevant pay data for
similar roles at companies with similar characteristics and at sector comparators.
Maximum
No prescribed maximum annual increase, but will normally be no higher than the general increase for the wider workforce.
In exceptional circumstances, the Committee may decide to award a higher increase for Executive Directors, for example, an increase in the scale, scope or responsibility of
the role, development of the individual within the role, to take account of relevant market movements, and/or on the appointment of new Executive Directors.
Performance targets
N/A
Other benefits
Purpose and link to strategy
Provides market-competitive benefits as part of the overall remuneration package, supporting the attraction and retention of Executive Directors of suitable calibre to
deliver business performance.
Provides insured benefits to support the individual and their family during periods of ill health, accident or death.
Operation
Benefits provided through third-party providers on a market-related basis.
May include car allowance, life insurance, private medical insurance and permanent disability insurance. Other benefits may be provided where appropriate, for example, in
line with local market practice where an Executive Director is outside the UK.
Maximum
Benefits may vary by role and individual circumstance and are reviewed periodically. However, the maximum level of benefits is not expected to deviate from the approved
Remuneration Policy. The Committee retains the discretion to approve a higher cost in exceptional circumstances (e.g. relocation) or in circumstances where factors outside
of the Company’s control have materially changed (e.g. increases in medical premiums).
Performance targets
N/A
Pension
Purpose and link to strategy
Provides market-competitive post-retirement benefits.
Operation
Executive Directors may receive a contribution to an HMRC-approved personal pension arrangement or a payment in lieu of pension contributions.
Maximum
Executive Directors may receive a maximum employer contribution to pension in line with that offered to the UK general workforce.
Performance targets
N/A
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
63
Directors’ remuneration report
continued
Element of remuneration
Summary
Bonus
Purpose and link to strategy
Incentivises annual delivery of short-term financial and strategic business goals and business strategy.
Maximum bonus is payable only for achieving demanding targets.
Operation
Performance measures, targets and weightings are set for the financial year. Payments are calculated based on an assessment of performance against those targets by the
Committee.
At least 33% of any bonus earned will be deferred for two years. Where bonus deferral is in the form of Company shares (under the Deferred Bonus Plan (“DBP”)), the
Committee has flexibility to allow dividends to accrue on such shares and for these amounts to be paid at the time the shares are released to the Executive Director.
Not pensionable.
Clawback and malus provisions apply. Details of when these may be applied are set out in the notes below.
Maximum
100% of salary
Performance targets
Performance is assessed on an annual basis against relevant financial and, where relevant, personal or strategic objectives. The Committee sets the performance measures
and weightings each year according to strategic priorities, although the weighting on financial measures will be at least 75%.
Any bonus for personal or strategic performance is payable only if, in the opinion of the Committee, there was an improvement in the underlying financial and operational
performance of the Group during that financial year.
The Committee has discretion to adjust the performance conditions to ensure that payments accurately reflect business conditions over the performance period. However,
such discretion may be used only in circumstances where the Committee considers the amended performance conditions to be:
•
fair and reasonable in the circumstances; and
•
a more appropriate measure of performance and not materially less challenging than the original condition would have been.
The Committee also has discretion to adjust (including to nil) the formulaic outcome where it considers that:
•
the outcome does not reflect the underlying financial or non-financial performance of the participant or the Group over the relevant period;
•
the outcome is not appropriate in the context of circumstances that were unexpected or unforeseen at the award date;
•
there exists any other reason why an adjustment is appropriate; and/or
•
it is appropriate to do so, taking into account a range of factors, including the management of risk and good governance and, in all cases, the experience of shareholders.
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
64
Directors’ remuneration report
continued
Element of remuneration
Summary
Long-Term Incentive Plan (“LTIP”)
Purpose and link to strategy
Incentivises delivery of longer-term financial and strategic objectives.
To reward and retain successful leadership, reward delivery of the Company strategy and long-term goals, and to align executive and shareholder interests.
Operation
Nil cost options or conditional awards usually granted annually, which normally vest after three years subject to continued service and performance targets. The Committee
sets performance targets for each performance cycle that it considers to be appropriately stretching.
Awards made to Executive Directors will be subject to a “holding period”, which prohibits them from selling the shares subject to the awards (other than to fund any exercise
price payable or pay any tax liability arising on vesting and limited exceptional circumstances, such as death) for five years following the date of grant.
Clawback and malus provisions apply. Details of when these may be applied are set out in the notes below.
Maximum
100% of salary normal limit and 200% of salary exceptional limit - e.g. recruitment, “buyout” awards
Performance targets
Performance is measured over three years. The Committee sets the performance measures and weightings for each grant to ensure they are linked to the delivery of
Company strategy.
The Committee has discretion to adjust the performance conditions to ensure that payments accurately reflect business conditions over the performance period. However,
such discretion may only be used in circumstances where the Committee considers the amended performance conditions to be:
•
fair and reasonable in the circumstances; and
•
a more appropriate measure of performance and not materially less challenging than the original condition would have been.
The Committee also has discretion to adjust (including to nil) the formulaic outcome where it considers that:
•
the outcome does not reflect the underlying financial or non-financial performance of the participant or the Group over the relevant period;
•
the outcome is not appropriate in the context of circumstances that were unexpected or unforeseen at the award date;
•
there exists any other reason why an adjustment is appropriate; and/or
•
it is appropriate to do so, taking into account a range of factors, including the management of risk and good governance and, in all cases, the experience of shareholders.
Share ownership guidelines
Purpose and link to strategy
To align the interests of executives with those of shareholders.
Operation
Executive Directors are required to build and maintain a shareholding equivalent to one year’s base salary through the retention of vested share awards or through open
market purchases until the guideline is met.
The Committee will monitor progress against this requirement on an annual basis.
A reasonable time limit to achieve the required shareholding is normally considered to be five years from appointment as an Executive Director (subject to the Committee’s
discretion where personal circumstances dictate).
Until such time as the shareholding guideline is met, Executive Directors will usually be required to retain:
•
50% of any shares received (post-tax deductions) by them following the vesting of any equity-settled incentive for the first five years of their appointment; and
•
75% of any shares received (post-tax deductions) by them following the vesting of any equity-settled incentive thereafter.
Departing Executive Directors are required to hold shares received following vesting of any share-based incentive award up to 100% of salary, or their actual shareholding so
arising if lower, for two years after leaving.
Performance targets
N/A
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
65
Directors’ remuneration report
continued
Element of remuneration
Summary
Non-Executive Directors’ fees and expenses
Purpose and link to strategy
To attract individuals with the required range of skills and experience.
Reflects time commitments and responsibilities of each role.
Reflects market-competitive fees.
Operation
Non-Executive Directors receive a basic fee for their respective roles. Additional fees are paid to Non-Executive Directors for chairing the Audit & Risk Committee and
Remuneration Committee, as well as for performing the role of Senior Independent Director.
Reviewed annually by the Board, normally effective 1 April. The review is informed by the required time commitment and responsibilities, and relevant fee data for sector
comparators and FTSE-listed companies of similar size and complexity. Additional fees may be paid on an exceptional basis if the time commitment in any one year is
significantly in excess of that normally expected.
All fees are paid in cash.
Non-Executive Directors are reimbursed for reasonable expenses, for example, travel and accommodation for business purposes. Any tax arising on those expenses is
settled directly by the Company. To the extent that these are deemed taxable benefits, they will be included in the Annual Report on Remuneration, as required.
Maximum
No prescribed maximum annual increase, but it is expected that fee increases will normally be no higher than general salary increase for the wider workforce. However, in the
event that there is a material misalignment with the market or change in complexity, responsibility or time commitment required to fulfil a Non-Executive Director role, the
Board has discretion to make an appropriate adjustment to the fee level.
The Company’s articles of association stipulate the maximum amount that may be paid in fees to Directors, specifically excluding any salary, remuneration or other amount
payable pursuant to other provisions within the articles of association.
Performance targets
N/A
Notes to the Policy table
Remuneration policy for other employees
The following differences exist between the Policy for the remuneration of Executive Directors as set out above and the approach to the payment of employees generally:
i.
benefits offered to other employees generally comprise provision of healthcare and company car benefits only where required for the role or to meet market norms;
ii.
a lower level of maximum annual bonus opportunity generally applies to employees below Board level;
iii. participation in the LTIP is limited to the Executive Directors and certain selected senior managers; and
iv. only Executive Directors, and not other employees, are expected to build and maintain a sizeable share-ownership position.
In general, these differences arise from the development of remuneration arrangements that are market competitive for the various categories of individuals and for the diverse international employment settings
in which we operate. This is of great importance given the highly cost competitive demands of the business sectors within which Carclo competes. They also reflect the fact that, in the case of the Executive
Directors and senior executives, a greater emphasis tends to be placed on performance-related pay.
Policy for the Non-Executive Directors
The Board determines the Policy and level of fees for the Non-Executive Directors, within the limits set out in the articles of association. No individual is allowed to participate in discussions relating to their own
remuneration.
The Policy table summarises the key components of remuneration for the Non-Executive Directors.
Non-Executive Directors do not participate in variable pay arrangements or receive any pension provision. They are not subject to any share ownership guideline.
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
66
Directors’ remuneration report
continued
Service contracts
The Executive Directors are employed under contracts of employment with Carclo. The principal terms of the Executive Directors’ service contracts are as follows:
Term
Summary
Notice period
From the Company: six months.
From the Executive Director: six months.
Termination payments
Pay in lieu of notice subject to normal tax and other statutory deductions.
No notice or payment in lieu of notice where the Company terminates for cause.
Any payment may be paid in one lump sum or in instalments. If paid in instalments, an Executive Director is required to mitigate their losses and any payments in lieu of notice may be
reduced, potentially to zero, by any income received through such mitigation.
Remuneration and benefits
Operation of the annual bonus scheme and LTIP is at the Company’s discretion and is non-contractual.
Expenses
Reimbursement of expenses reasonably incurred in the proper performance of their duties.
Holiday entitlement
Chief Executive Officer: 25 working days plus public holidays.
Chief Financial Officer: 25 working days plus public holidays.
Private medical insurance
Private medical insurance cover is at the Company’s discretion and is non-contractual.
Other benefits
Other benefits may include car allowance, life insurance
and permanent disability insurance, all of which are non-contractual.
Executive Directors are eligible for other paid leave including adoption leave, maternity/paternity leave (as applicable), parental leave, shared parental leave and bereavement leave
in accordance with the Company’s then current policies.
Sickness
Payment for any period of sickness is at the Company’s discretion and subject to set-off in respect of any statutory sick pay/social security sickness benefit or other benefits to
which the Executive Director may be entitled.
Restrictive covenants
Chief Executive Officer: six months.
Chief Financial Officer:
•
six months in relation to the Group’s business; and
•
twelve months in relation to the Group’s customers, key employees and products.
Effective date of contract
Chief Executive Officer: Frank Doorenbosch, 6 October 2022.
Chief Financial Officer: Ian Tichias, 1 April 2025.
Non-Executive Directors are appointed under arrangements that may generally be terminated at will by either party without compensation and their appointment is reviewed annually.
Letters of appointment are provided to the Non-Executive Directors, which are effective for a period of three years. Non-Executive Directors are subject to annual re-election at the AGM.
The principal terms of the Non-Executive Directors’ letters of appointment are as follows:
Term
Summary
Termination
At the end of their latest term of office unless (i) terminated earlier by and at the discretion of either party or (ii) not re-elected by shareholders at an AGM during their term of office.
Fees
As set out in the Annual Report on Remuneration on page 70.
Expenses
Reimbursement of expenses reasonably incurred in the proper performance of their duties.
Time commitment
Each Non-Executive Director must be able to devote sufficient time to the role to fulfil their duties.
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
67
Directors’ remuneration report
continued
Service contracts
continued
Directors’ letters of appointment and the unexpired period of their appointments (where appropriate after extension by re-election) at 30 June 2026 are set out below:
Non-Executive Director
Date of most
recent letter
Unexpired term as at
31 March 2026
1
Date of appointment
Last re-appointment at AGM
J Oatley
21 June 2024
To 19 July 2027
20 July 2018
26 September 2025
R Amey
2
28 February 2026
To 28 February 2029
1 March 2023
26 September 2025
N Kozmina
15 April 2024
To 21 April 2027
22 April 2024
26 September 2025
1.
Unless not elected/re-elected by shareholders at an AGM before this date.
2. Rachel Amey’s formal letter of appointment expired on 28 February 2026. The Board has passed a resolution confirming her ongoing service and will propose her re-election at the 2026 AGM.
Directors’ service contracts and letters of appointment are available for inspection at the Company’s registered office.
Malus and clawback
Awards granted under the Company’s annual bonus and LTIP schemes are subject to malus and clawback provisions, enabling an adjustment to an employee’s variable pay awards if warranted by the occurrence of
a “trigger event”. The type of events that may constitute a “trigger event” are as follows:
•
circumstances justifying the summary dismissal of an employee from his office or employment with any member of the Group including, but not limited to, dishonesty, fraud, misrepresentation or breach of
trust;
•
circumstances where an employee has participated in or is responsible for conduct which resulted in significant losses to any member of the Group;
•
the Company has become aware of any material wrongdoing on the part of an employee;
•
an employee has acted in a manner which in the opinion of the Board has brought or is likely to bring any member of the Group into material dispute or is materially adverse to the interests of any member of the
Group;
•
any material breach of an employee’s terms and conditions of employment, or material breach of a fiduciary duty owed to any member of the Group;
•
any material violation of Company policy, rules or regulation, or a failure to meet appropriate standards of fitness and propriety;
•
any material failure of risk management;
•
any other conduct which is considered to be misconduct; or
•
the inaccurate reporting of any accounts, financial data or such other information resulting in such accounts, financial data or other information being, in the opinion of the Committee (acting fairly and
reasonably), either materially corrected and/or requiring any future accounts, financial data or information having to include write-downs, adjustments or other corrective items in order to address the
inaccuracy.
The above list is not exhaustive and other circumstances may also lead to the application of malus or clawback.
The application of malus (i.e. partial or full lapse of an unvested incentive opportunity) will be possible during the relevant performance period and holding period. The application of clawback (i.e. the partial or full
repayment of a vested-and-paid incentive award) will be possible for a period of 18 months from the end of the relevant performance period.
The Committee will consider the most appropriate method through which to apply an adjustment to pay at its absolute discretion. In most cases, the simplest approach would be in the following sequence:
•
reduction of in-flight annual bonus and/or LTIP awards not yet performance-tested (i.e. malus);
•
reduction of deferred bonus or vested but not yet exercised/transferred LTIP award (i.e. malus); and
•
request for the repayment of an already-paid annual bonus and/or LTIP award (i.e. clawback).
An employee not in role at the time of the trigger event should normally be excluded from an adjustment except in the instance where the severity of the event warrants a collective adjustment across the entire
business area or Company regardless of responsibility.
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
68
Directors’ remuneration report
continued
Annual Report on Remuneration
The following section provides details of how the Policy was implemented during the financial year ended 31 March 2026.
Remuneration Committee membership in FY26
The Remuneration Committee currently comprises Natalia Kozmina (Committee Chair), Rachel Amey and Joe Oatley.
The Committee had three meetings during FY26 and all Committee members attended all meetings during the year under review.
During the year, the Committee sought internal support from the Chief Executive Officer and Chief Financial Officer, who attended Committee meetings by invitation from the Committee Chair, to advise on
specific questions raised by the Committee and on matters relating to the performance and remuneration of senior managers. The Chief Executive Officer and Chief Financial Officer were not involved in any
decisions that related directly to their own remuneration.
Independent advice
In undertaking its responsibilities, the Committee seeks independent external advice as necessary. During the year, the Committee engaged Ellason to provide such advice, having been originally appointed by the
Committee in 2021. Ellason has no connection with any individual Director and provides no other services to the Company, so satisfying the Committee of its objectivity and independence. During the year, fees of
£23,760 were paid to Ellason in respect of general advice around levels of executive remuneration.
Summary of shareholder voting on remuneration matters
The following table shows the results of the shareholder vote on the FY25 remuneration report at the 2025 AGM:
Total number of votes
% of votes
For (including discretionary)
23,271,318
99.79%
Against
48,489
0.21%
Total votes cast (excluding withheld votes)
23,319,807
100.00
Votes withheld
790,711
Total votes cast (including withheld votes)
24,110,518
The following table shows the results of the shareholder vote on the Policy at the 2025 AGM:
Total number of votes
% of votes cast
For (including discretionary)
23,228,118
96.45%
Against
853,983
3.55%
Total votes cast (excluding withheld votes)
24,082,101
100.00
Votes withheld
28,417
Total votes cast (including withheld votes)
24,110,518
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
69
Directors’ remuneration report
continued
Single total figure of remuneration for Executive Directors (audited)
The table below sets out a single figure for the total remuneration earned by each Executive Director for the year ended 31 March 2026 and the prior year:
Name
Salary
£000
Benefits
1
£000
Annual bonus
£000
LTIP and
other share-based
payments
2
£000
Pension
£000
Total fixed
£000
Total variable
£000
Total
£000
F Doorenbosch
FY26
400
11
180
149
0
411
329
740
FY25
370
11
367
0
0
381
367
748
I Tichias
FY26
280
12
101
0
16
308
101
409
FY25
3
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
1.
Benefits comprise private medical cover, car allowance and business expenses chargeable to income tax in the UK.
2. Frank Doorenbosch was granted an LTIP award in September 2023 which vests 50% on FY26 EPS target and 50% on TSR over a 3-year period ending in September 2026. For the purposes of the EPS Performance Condition, EPS will
be the Company’s earnings per ordinary share as shown in the Company’s accounts under the name of “underlying earnings per share”, but excluding the IAS 19 Net Pension Finance charge/credit from the calculation of earnings, or any
replacement of it. The value in the table above reflects an estimate of the overall vesting at end FY26 of 23% (45% EPS and 0% TSR) and valued using the average share price over the last quarter in FY26 (of 52.8p). The final vest-date
value, reflecting the final vesting approved by the Committee in September 2026 and the share price at vest will be updated in next year’s report.
3. Ian Tichias was appointed as a Director and Chief Financial Officer from 1 April 2025. There is therefore no remuneration information to disclose for him in relation to FY25.
Payments to former Directors
During the year, Eric Hutchinson received £119,260 in respect of the FY25 STI award. Eric’s FY23 LTIP award is expected to vest in September 2026, full details to be announced via RNS at the time of vesting.
An additional 30,797 LTIP awards vested for Phil White and Alan Hook. Of these, 17,574 shares awarded to Phil White remained subject to a two-year holding period.
Payments for loss of office
There were no payments to Directors for loss of office during FY26.
Single total figure of remuneration for Non-Executive Directors (audited)
The table below sets out a single figure for the total remuneration received by each Non-Executive Director for the year ended 31 March 2026 and the prior year:
Name
Base fee
£000
Additional fee
£000
Total fee
£000
Total fixed
£000
Total variable
£000
Total
£000
J Oatley
FY26
135
0
0
135
0
135
FY25
90
0
0
90
0
90
R Amey
FY26
60
0
0
60
0
60
FY25
48
0
0
48
0
48
N Kozmina
FY26
55
0
0
55
0
55
FY25
42
0
0
42
0
42
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
70
Directors’ remuneration report
continued
Incentive outcomes for the year ended 31 March 2026 (audited)
Annual performance bonus outcome FY26
The FY26 annual bonus was based primarily on Group underlying EBIT. An overall bonus pool is
calculated with reference to a share of the surplus generated above an underlying EBIT threshold,
which for FY26 was set at £12.6 million (before Target bonus). Actual Group underlying EBIT (before
Target bonus) for the year was £13.8 million which resulted in a total bonus pool of £1.2 million to be split
between all STI participants.
Payments under the FY26 annual bonus were subject to two additional performance criteria relating
to the Group’s operating cash conversion rate and the Group’s health and safety incident frequency
rate. In both cases, payments under the annual bonus would have been reduced by 10% if the Group did
not achieve a year-on-year improvement in outcomes. As the IFR was at the same level as FY25, a 10%
reduction for this element was applied.
Based on actual performance, both Frank Doorenbosch and Ian Tichias received annual bonuses
amounting to 90.0% of their target bonus opportunities for the year (equivalent to 45.0% and 36.0%
of salary respectively). The Committee satisfied itself that the formulaic bonus outcomes were a fair
reflection of the Group’s overall performance for the year and that an affordability underpin had been
achieved, with no discretion applied to these outcomes.
Name
Maximum
potential % of salary
1
Outcome
% of salary
F Doorenbosch
100
45.0
I Tichias
75
36.0
1.
33% of the bonus will be deferred in shares for two years.
Scheme interests awarded in the year ended 31 March 2026 (audited)
FY26 LTIP
Under the 2017 Carclo LTIP award, an award of 750,000 shares was granted to Ian Tichias in September
2025. No LTIP award was granted to the CEO in FY26, as the FY24 LTIP award is intended to cover a
three-year period.
Implementation of Remuneration Policy for the year ending 31 March 2027
A summary of how the Policy will be applied during the year ending 31 March 2027 is set out below:
Basic salary
Executive Directors’ base salaries:
Name
FY27
FY26
% increase
F Doorenbosch
£412,000
£400,000
3%
I Tichias
£288,400
£280,000
3%
Below Executive Director level, base pay increases are limited to cost-of-living adjustments, typically
in the range of 4% to 10%, apart from cases where local statutory requirements require a different
approach, promotions, increases in scope or other exceptional reasons.
Pension arrangements
As agreed with Frank Doorenbosch, he does not receive employer pension contributions. Ian Tichias
receives a pension contribution of 6% of base salary.
Annual bonus
The maximum bonus potential for the year ending 31 March 2027 will continue to be 100% of salary
for the CEO and 75% of salary for the CFO. The bonus will operate on a consistent basis to FY26, with
a bonus pool calculated with reference to Group underlying EBIT, underpinned by Group revenue
performance and achievement of personal objectives.
In continued recognition of the importance of safety to the business, the bonus also includes an
automatic reduction for any drop in safety performance compared with the prior financial year. An
automatic reduction will also be applied for any drop in cash conversion performance compared with
the prior financial year. Finally, an overall affordability underpin will be applied to all formulaic outcomes.
Maximum bonus will be payable only when the financial results of the Group significantly exceed
expectations and the Committee retains the discretion to adjust awards where appropriate to reflect
underlying financial and operating performance of the Group. Clawback and malus provisions will apply
for all Executive Directors. Payment of 33% of any bonus earned by an Executive Director is subject to
deferral for two years.
Proposed target levels have been set to be challenging relative to the FY27 business plan, although
specific targets are deemed to be commercially sensitive and will not be published until such time as the
Committee is confident there will be no adverse impact on the Company of such disclosure. At this time
the Committee believes that the disclosure of targets in the year following the determination of bonuses
is appropriate, as disclosed above.
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
71
Directors’ remuneration report
continued
Implementation of Remuneration Policy
for the year ending 31 March 2027
continued
Long-term incentives
As mentioned on page 63, the Committee intends to grant PSP awards to the Executive Directors for
FY27 in line with the Directors’ Remuneration Policy. The detailed terms of these awards, including the
award levels and the applicable performance conditions and targets, had not been determined as at the
date of this report. Full details of the awards will be published via RNS market announcement at the time
of grant.
Under the Plan rules, awards are normally granted within the period of 42 days following the
announcement of the Company’s results. Awards to Executive Directors will, as required by the Plan,
be subject to stretching performance conditions measured over three financial years, a two year post
vesting holding period and the malus and clawback provisions of the Plan.
Awards granted to Ian Tichias will vest dependent on two performance conditions, with 50% determined
by reference to the Company’s absolute TSR and 50% determined by reference to the Company’s EPS,
as set out in the table below:
Measure
Performance period
Weighting
Vesting
Absolute TSR
The performance period
is the period commencing
on the grant date and
ending on the vesting
date, which will be the
third anniversary of the
grant date.
50%
0% vesting if TSR is at or
below 65 pence
100% vesting if TSR is at
or above 125 pence
Straight-line vesting
between 65 pence and
125 pence
EPS
The performance period
is the period of three
financial years of the
Company between
1 April 2025 and 31 March
2028. The performance
condition will be based on
the Company’s EPS for
the last financial year of
the performance period
(the financial year ending
31 March 2028).
50%
0% vesting if EPS is at or
below 7.5 pence
100% vesting if EPS is at
or above at 11.5 pence
Straight-line vesting
between 7.5 pence and
11.5 pence
Non-Executive Directors
The Company’s approach to Non-Executive Directors’ remuneration is set by the Board with account
taken of the time and responsibility involved in each role, including, where applicable, the chairing of
Board Committees. A summary of current fees is shown in the table below. The Chair is paid a single
fee for all of their responsibilities. The Senior Independent Director is also not entitled to receive any
remuneration for chairing any Committees.
Fee levels for FY27 can be summarised as follows:
Provision
FY27
FY26
% increase
Non-Executive Chair base fee
£135,000
£135,000
0%
Non-Executive Director base fee
£50,000
£50,000
0%
Senior Independent Director fee
£10,000
£10,000
0%
Committee Chair fees
£7,000
£7,000
0%
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
72
Directors’ remuneration report
continued
Percentage change in Directors’ remuneration
The table below shows the percentage change in each Director’s salary/fees, bonus and benefits between the financial years ended 31 March 2025 and 31 March 2026 compared to that of the total amounts for all
UK employees of the Group for each of these elements of pay. The figures used to calculate the percentage changes for Directors are annualised salary/fees, benefits and bonus on a comparable basis. Prior year
figures have been restated to ensure all figures are presented on a consistent basis.
FY25 to FY26
FY24 to FY25
FY23 to FY24
FY22 to FY23
FY21 to FY22
Base
salary/fee
%
Benefits
%
Bonus
%
Base
salary/fee
%
Benefits
%
Bonus
%
Base
salary/fee
%
Benefits
%
Bonus
%
Base
salary/fee
%
Benefits
%
Bonus
%
Base
salary/ fee
%
Benefits
%
Bonus
%
Chief Executive
Officer
F Doorenbosch
1
8.1
—
(48.6)
—
37.5
100.0
—
(4.8)
—
—
—
—
—
—
—
Executive Director
I Tichias
2
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Non-Executive
Directors
J Oatley
3
50.0
—
—
—
—
—
—
—
—
—
—
—
22.2
—
—
R Amey
4
25.0
—
—
—
—
—
—
—
—
—
—
—
—
—
—
N Kozmina
5
30.9
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Average percentage
change for UK
employees
6, 7
5.2
(32.5)
(24.8)
(4.4)
(0.7)
689.5
4.8
20.4
(42.5)
5.4
1.3
(19.3)
2.9
19.4
(54.1)
1.
Non-Executive Director from 1 April 2022 to 6 June 2022. Appointed as an Executive Director from 7 June 2022. Appointed as CEO on 6 October 2022.
2. CFO from 1 April 2025.
3.
Non-Executive Director to 5 November 2022. Appointed as Non-Executive Chair from 6 November 2022.
4.
Non-Executive Director to 20 August 2023. Senior Independent Director from 21 August 2023 to 31 January 2024 and from 28 February 2024.
5. Non-Executive Director from 22 April 2024.
6.
UK employees have been selected as the most appropriate comparator pool, given the largest number of Group employees and the Group’s headquarters are located in the UK.
7.
Changes in benefits largely reflect changes in business expenses chargeable to income tax.
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
73
Directors’ remuneration report
continued
Relative importance of spend on pay
The table below shows the Group’s actual expenditure on pay (for all employees) relative to the
losses/profits for FY25 and FY26.
FY26
£000
FY25
£000
% change
Staff costs
34,833
36,142
-3.6%
Profit/(loss) for the period
2,695
872
209%
Relative performance
The graph below compares the value of £100 invested in Carclo shares, including reinvested dividends,
with the FTSE Small Cap index over the last ten years. This index was selected because it is considered
to be the most appropriate against which the total shareholder return of Carclo plc should be measured.
In time, the table below will build to represent ten years of data:
Financial year
Method
25th percentile
pay ratio
Median
pay ratio
75th percentile
pay ratio
FY26
Option A
21 : 1
18 : 1
11 : 1
FY25
Option A
28 : 1
22 : 1
15 : 1
FY24
Option A
18 : 1
13 : 1
9 : 1
FY23
Option A
19 : 1
15 : 1
11 : 1
FY22
Option A
7 : 1
6 : 1
4 : 1
FY21
Option A
15 : 1
13 : 1
8 : 1
FY20
Option A
12 : 1
10 : 1
7 : 1
Full-year pay data for the FY26 financial year has been used to calculate the ratios. The full-year pay
data for part-time employees was adjusted by an appropriate multiple to include their data on a full-time
equivalent basis.
The employee data used to calculate the ratios is as follows:
25th percentile
Median
75th percentile
Total pay and benefits
£28,489
£33,855
£54,176
Base salary
£27,217
£32,192
£50,485
We confirm our belief that the median pay ratio for the year is consistent with the Company’s wider pay,
reward and progression policies affecting our employees. Our pay reflects the key market in which we
operate.
Directors’ interests (audited)
The interests of the Directors and their connected persons in the ordinary shares of the Company
are shown below as at 31 March 2026. There have been no changes to these shareholdings between
31 March 2026 and the date of this report; the figures remained unchanged throughout this period:
31 March 2026
31 March 2025
Ordinary shares
Vested options
Ordinary shares
Vested options
J Oatley
400,000
N/A
400,000
N/A
R Amey
5,000
N/A
5,000
N/A
N Kozmina
36,111
N/A
0
N/A
F Doorenbosch
453,958
0
403,958
0
I Tichias
10,000
0
N/A
N/A
0
50
100
150
200
250
2018
2017
2019
2020
2021
2022
2024
2023
2025
2026
Carclo
FTSE Small Cap
2016
CEO pay ratio reporting
Outlined below is the ratio of the CEO’s single figure of total remuneration for FY26 expressed as a
multiple of total remuneration for UK employees. The ratios provided for prior years use a combination
of the CEO’s and the Executive Chair’s single figure of total remuneration, as explained above under
the table of historical data (Chief Executive Officer/Executive Chair), reflecting the period each role
undertook the role of CEO or its equivalent.
The three ratios referenced below are calculated by reference to the employees at the 25th, 50th and
75th percentile. We additionally disclose the total pay and benefits and base salary of the employees
used to calculate the ratios.
Of the three options set out in the new legislation for calculating the Chief Executive/Executive Chair
pay ratio, we have opted to use Option A to calculate the pay ratio. We have chosen to use Option A
because we do not have to calculate gender pay gap information for our whole UK workforce and so do
not have the required data available to use Options B or C.
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
74
Directors’ remuneration report
continued
Directors’ shareholding requirement (audited)
The table below shows the shareholding of each Executive Director against their respective shareholding requirement as at 31 March 2026:
Shares held
Director
Owned outright
or vested
Vested but subject
to holding period
Unvested and
subject to vesting
conditions
Shareholding
requirement
(% salary)
Current
shareholding
(% salary)
1
F Doorenbosch
453,958
0
1,250,000
100
50
I Tichias
10,000
0
750,000
100
1.58
1.
Based on a share price of 44.2 pence per share (being the closing price on 31 March 2026).
Ian Tichias was appointed as CFO from 1 April 2025. On appointment he owned no shares outright. On 18 September 2025, Ian Tichias purchased 10,000 ordinary shares in the Company on the open market, with a
notification released on the same day.
Directors’ interests in shares in Carclo Long-Term Incentive Plans (audited)
Director
Grant date
Award type
At 1 April 2025
Granted
during FY26
Vested
during FY26
Lapsed
during FY26
At 31 March
2026
Market price
per share at
date of grant
Market price
per share at
vesting
Vesting date
Performance
conditions
F Doorenbosch
21/09/2023
Conditional
share award
1,250,000
—
—
—
1,250,000
12.725p
N/A
21/09/2026
50%: TSR
50%: EPS
I Tichias
11/09/2025
Conditional
share award
—
750,000
—
—
750,000
63p
N/A
11/09/2028
50%: TSR
50%: EPS
Approval of the Directors’ remuneration report
The Directors’ remuneration report set out on pages 61 to 66 was approved by the Board of Directors on 30 June 2026 and signed on its behalf by Natalia Kozmina, Chair of the Remuneration Committee.
Natalia Kozmina
Chair of the Remuneration Committee
30 June 2026
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
75
Directors’ report
Pages 76 to 78 inclusive (together with the
sections of the annual report incorporated
into these pages by reference) constitute the
Directors’ report that has been drawn up and
presented in accordance with applicable law.
The Directors’ report also includes certain
disclosures that the Company is required to make
by the Financial Conduct Authority’s Disclosure
Guidance and Transparency Rules and Listing
Rules.
Strategic report
The strategic report required by the Companies
Act 2006 can be found on pages 1 to 49. This
report sets out the Company’s business model
and strategy, contains a review of the business
and describes the development and performance
of the Group’s business during the financial year
and its position at the end of the year. It also
contains, on pages 42 to 49, a description of the
principal risks and uncertainties facing the Group.
The Directors who served during the year are set
out below:
J Oatley
F Doorenbosch
I Tichias – appointed 1 April 2025
R Amey
N Kozmina
FCA’s Disclosure Guidance
and Transparency Rules
For the purposes of the Financial Conduct
Authority’s Disclosure Guidance and
Transparency Rules (DTR 4.1.5R (2) and DTR
4.1.8R), this Directors’ report and the strategic
report on pages 1 to 49 together comprise the
“management report”.
Conflicts of interest
All Directors submit details to the Company
Secretary of any new situations, or changes to
existing ones, which may give rise to an actual
or potential conflict of interest with those of the
Company. Where an actual, or potential, conflict
is approved by the Board, the Board will normally
authorise the situation on the condition that the
Director concerned abstains from participating
in any discussion or decision affected by the
conflicted matter. Authorisation of a conflict is
only given to Directors who are not interested
in the matter. No new conflicts of interest were
noted during 2025 or 2026 or between the
year end and the date of signing of the financial
statements.
Going concern
As described in the viability statement on page
49, the Directors have assessed the prospects
and viability of the Group and parent company
over a three-year period to March 2029.
The Board has maintained its rigorous approach
to cash forecasting and continued to manage
both working capital and capital expenditure
tightly to drive cash generation and reduce net
debt. This has ensured that the Group is in a
stronger position to achieve results that result
in sufficient headroom on covenant tests. The
Company has financing with BZ Commercial
Finance DAC that provides sufficient funds to
allow the Company to invest appropriately in the
pursuit of its strategy. The Board has performed
a robust assessment of the principal risks facing
the Company, including those risks that would
threaten the business model, future performance,
solvency or liquidity. The Board is satisfied that
it is appropriate to adopt the going concern
basis in the preparation of this annual report and
accounts.
Dividend
Under the BZ borrowing facility agreement, which
replaced the previous HSBC facility and came
into effect on 24 April 2025, dividend payments
are permitted but require the prior approval of the
lender.
The current focus is on cash flow generation to
support strategic growth and, with the Company
currently having insufficient distributable
reserves, no dividend is proposed in respect
of the year ended 31 March 2026. The Board
will continue to review the Group financial
performance, capital allocation and Company
reserves regularly to determine the appropriate
time for dividend payments.
Share capital
At 31 March 2026, the Company’s issued share
capital comprised 73,419,193 ordinary shares of
5 pence each.
Each share carries equal rights to dividends,
voting and return of capital on the winding up
of the Company as set out in the Company’s
articles of association.
There are no restrictions on the transfer of
securities in the Company and there are no
restrictions on voting rights or deadlines, other
than those prescribed by law or by the articles
of association, nor is the Company aware of
any arrangement between holders of its shares
which may result in restrictions on the transfer
of securities or voting rights.
Share capital authorities
The Directors were granted a general authority
at the 2025 AGM to allot shares in the capital of
the Company up to an aggregate nominal value of
£1,211,417 (representing approximately 33% of the
issued share capital prior to the 2025 AGM). This
authority is due to lapse at the 2026 AGM.
At the 2025 AGM, the Directors also requested
authority to allot shares for cash on a
non-pre-emptive basis in any circumstances
up to a maximum aggregate nominal amount of
£183,548 (representing approximately 5% of the
issued share capital prior to the 2025 AGM) and
to purchase up to 10% of the Company’s issued
ordinary shares in the market. This authority is
also due to lapse at the 2026 AGM.
We intend to seek renewal of the authorities
described above at the 2026 AGM.
Change of control
The financing agreement with BZ includes a
change of control clause that, on its occurrence,
would result in the cancellation of the facilities
and all amounts outstanding would be
immediately due and repayable. There are
no other significant agreements to which the
Company is a party that take effect, alter or
terminate on a change of control following a
takeover bid, nor are there any agreements
between the Company and its Directors or
employees providing for compensation for
loss of office or employment (whether through
resignation, purported redundancy or otherwise)
that occurs because of a takeover bid.
Amendment of articles of association
The Company’s articles of association may
only be amended by special resolution of the
shareholders at a general meeting.
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
76
Directors’ report
continued
Appointment and replacement of Directors
The Company’s articles of association provide that the number of Directors shall be not more than
twelve and not fewer than four, unless otherwise determined by the Company by ordinary resolution.
Directors may be appointed by an ordinary resolution of the shareholders or by a resolution of the
Board.
A Director appointed by the Board during the year must retire at the first AGM following their
appointment and such Director is eligible to offer themself for election by the Company’s shareholders.
Additionally, the Company’s articles of association provide that every Director shall retire from office at
each AGM. A Director who retires at an AGM may be re-elected by the shareholders.
In line with the Company’s articles of association and the UK Corporate Governance Code, all Directors
in office at the date of the 2025 AGM retired and presented themselves for re-election at the 2025
AGM.
In addition to the statutory power, a Director may be removed by ordinary resolution of the
shareholders. The articles also set out the circumstances when a Director must leave office. These
include where a Director resigns, becomes bankrupt, is absent from the business without permission or
where a Director is removed by notice signed by a requisite number of remaining Directors.
Powers of Directors
The Directors may exercise all the powers of the Company, in accordance with, and subject to, the
Company’s articles of association.
Political donations and expenditure
No political donations were made, nor was any political expenditure incurred during the financial year.
Substantial shareholdings
Pursuant to the Disclosure Guidance and Transparency Rules of the Financial Conduct Authority,
the Company had been notified of the following interests in the voting rights attaching to its issued
share capital as at 31 March 2026 and 31 March 2025. The percentages shown are those stated in each
notification, as at the date it was given.
As at 25 June 2026
As at 31 March 2026
Schroder Investment Management (London)
1
19.6%
19.94%
Janus Henderson Investors (London)
2
6.43%
6.43%
Philip J Milton & Co
3.03%
2.86%
1.
Whose ultimate controlling person is Schroders plc.
2. Whose ultimate controlling person is Janus Henderson Group plc.
Directors’ indemnities
The Company’s articles of association permit the Company to indemnify any Director or any Director of
any associated company against any liability pursuant to any qualifying third-party indemnity provision
or any qualifying pension scheme indemnity provision, or on any other lawful basis.
The indemnity provisions entered into by the Company in favour of all the Directors were in force during
the year and continue to be in force at the date the Directors’ report is approved. The Company also
takes out insurance covering claims against the Directors or officers of the Company and any associated
company and this insurance provides cover in respect of some of the Company’s liabilities under the
indemnity provisions.
Disclosure of information to auditor
In accordance with Section 418(2) of the Companies Act 2006, each of the persons who is a Director at
the date of approval of this annual report confirms that:
•
so far as the Director is aware, there is no relevant audit information of which the Group and
Company’s auditor is unaware; and
•
the Director has taken all the steps that they ought to have taken as a Director in order to make
themself aware of any relevant audit information and to establish that the Group and Company’s
auditor is aware of that information.
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
77
Directors’ report
continued
Disclosure of information to auditor
continued
In accordance with Section 414C(11) of the Companies Act 2006, the following information is
incorporated into this Directors’ report by reference and is deemed to form part of this report:
Disclosure
Section of report
Page(s)
Corporate governance statement
Statement of corporate
governance
50
The Group’s business activities, together with the
factors likely to affect its future development
Strategic report
1 to 49
The Group’s research and development activities
Strategic report
39, 93, 96
The financial position of the Group, its cash flows,
liquidity position and borrowing facilities
Strategic report
— CFO review
Note 19
20 to 25
118 to 120
The profit/(loss) from continuing operations of the
Group before taxation
Consolidated income
statement
86
The statutory result of the Group
Consolidated income
statement
86
Details of the changes in issued share capital during
the year
Note 24
130 to 131
Information on the Group’s financial risk
management objectives and policies and its
exposure to credit risk, interest risk, liquidity risk
and foreign currency risk
Note 26
132 to 137
The Group’s internal control and risk management
systems
Audit & Risk
Committee report
55
The Group’s policies as regards the employment of
disabled persons and a description of actions the
Group has taken to encourage greater employee
involvement in the business
Strategic report –
Responsible
operations – People
28
Information on greenhouse gas emissions and
energy consumption
Strategic report –
Responsible operations
– Environment
33
Information on engagement with employees,
suppliers and customers
Strategic report –
Section 172 statement
27
Information required by LR 6.6.1R
There is no additional information required to be disclosed under LR 6.6.1R other than that disclosed in
the Directors’ remuneration report.
Section 172 statement
Throughout the year, the Directors have had regard to their duties under Section 172 of the Companies
Act 2006. In promoting the long-term success of the Company, the Board has weighed the likely long-
term consequences of its decisions alongside the interests of the Group’s key stakeholders. Stakeholder
perspectives inform Board discussion and decision-making, and the Board keeps its engagement
mechanisms under regular review to ensure those perspectives are understood and reflected in the
matters it considers.
Further details of stakeholder engagement, sustainability matters, risk management and the Board’s
governance and decision-making framework are set out on pages 27 to 49 and 50 to 79.
By order of the Board
Ian Tichias
Chief Financial Officer and Company Secretary
30 June 2026
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
78
Statement of Directors’ responsibilities
The Directors are responsible for preparing
the annual report and the Group and parent
company financial statements in accordance with
applicable law and regulations.
Company law requires the Directors to prepare
Group and parent company financial statements
for each financial year. Under that law, the
Directors have prepared the Group financial
statements in accordance with UK-adopted
International Accounting Standards and have
elected to prepare the parent company financial
statements in accordance with UK accounting
standards, including FRS 101 Reduced Disclosure
Framework.
Under company law the Directors must not
approve the financial statements unless they are
satisfied they give a true and fair view of the state
of affairs of the Group and parent company and
of their profit or loss for that period. In preparing
each of the Group and parent company financial
statements, the Directors are required to:
•
select suitable accounting policies and then
apply them consistently;
•
make judgements and estimates that are
reasonable, relevant, reliable and prudent;
•
for the Group financial statements, state
whether they have been prepared in
accordance with IFRSs as adopted by the UK;
•
for the parent company financial statements,
state whether applicable UK accounting
standards have been followed, subject to any
material departures disclosed and explained in
the parent company financial statements;
•
assess the Group and parent company’s ability
to continue as a going concern, disclosing, as
applicable, matters related to going concern;
and
•
use the going concern basis of accounting
unless they either intend to liquidate the
Group or the parent company or to cease
operations or have no realistic alternative but
to do so.
The Directors are responsible for keeping
adequate accounting records that are sufficient
to show and explain the parent company’s
transactions and disclose with reasonable
accuracy at any time the financial position of
the parent company and enable them to ensure
that its financial statements comply with the
Companies Act 2006. They are responsible
for such internal control as they determine
is necessary to enable the preparation of
financial statements that are free from material
misstatement, whether due to fraud or error, and
have general responsibility for taking such steps
as are reasonably open to them to safeguard the
assets of the Group and to prevent and detect
fraud and other irregularities.
Under applicable law and regulations, the
Directors are also responsible for preparing a
strategic report, Directors’ report, Directors’
remuneration report and statement of corporate
governance that complies with that law and those
regulations.
The Directors are responsible for the
maintenance and integrity of the corporate and
financial information included on the Company’s
website. Legislation in the UK governing the
preparation and dissemination of financial
statements may differ from legislation in other
jurisdictions.
Responsibility statement of the
Directors in respect of the annual
financial report
The Directors as at the date of this report, whose
names and functions are set out on page 52,
confirm that to the best of their knowledge:
•
the financial statements, prepared in
accordance with the applicable set of
accounting standards, give a true and fair
view of the assets, liabilities, financial position
and profit or loss of the Company and the
undertakings included in the consolidation
taken as a whole; and
•
the strategic report includes a fair review of
the development and performance of the
business and the position of the issuer and
the undertakings included in the consolidation
taken as a whole, together with a description
of the principal risks and uncertainties that
they face.
We consider the annual report and accounts,
taken as a whole, is fair, balanced and
understandable and provides the information
necessary for shareholders to assess the Group’s
position and performance, business model and
strategy.
By order of the Board
Frank Doorenbosch
Chief Executive Officer
30 June 2026
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
79
Opinion
We have audited the Group financial statements of Carclo plc (the ‘Parent company’) and its
subsidiaries (the ‘Group’) for the year ended 31 March 2026 which comprise the Consolidated Income
Statement, Consolidated Statement of Comprehensive Income, Consolidated and Parent Company
Statement of Financial Position, Consolidated and Parent Company Statement of Changes in Equity,
Consolidated Statement of Cash Flows, and notes to the financial statements, including significant
accounting policies.
The financial reporting framework that has been applied in their preparation is applicable law and UK
adopted International Financial Reporting Standards (IFRSs).
In our opinion the financial statements:
•
give a true and fair view of the state of the Group’s and of the Parent Company’s affairs as at
31 March 2026 and of the Group’s profit for the year then ended;
•
have been properly prepared in accordance with UK adopted IFRSs; and
•
have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK))
and applicable law. Our responsibilities under those standards are further described in the Auditor’s
responsibilities for the audit of the financial statements section of our report.
We are independent of the Group and Parent Company in accordance with the ethical requirements
that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard
as applied to listed public interest entities, and we have fulfilled our other ethical responsibilities in
accordance with these requirements. We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our opinion.
An overview of the scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of material
misstatement in the financial statements. In particular, we reviewed subjective judgements made by
the directors, for example in respect of significant accounting estimates where those involved making
assumptions and the consideration of future events that are inherently uncertain. As in all our audits,
we also addressed the risk of management override of controls, including evaluating whether there
was evidence of bias by the directors that could represent an increased risk of material misstatement.
We tailored the scope of our audit to ensure that we performed sufficient audit procedures to support
the provision of an audit opinion on the financial statements as a whole, taking into account factors
such as the structure of the Group, the accounting processes and the industry in which it operates. Our
audit consisted principally of substantive tests of detail augmented by the use of audit data analytics
techniques as these were assessed as the most efficient and effective ways of obtaining sufficient
reliable audit evidence.
Our audit scope covered all the Group’s components, with varying levels of testing based upon the
significance of the assessed risks of misstatement across those components. We performed a scoping
assessment of the Group at the planning stage of the audit and subsequently updated this assessment
for the year-end results. We assessed the risk of material misstatement for each of the components
and determined their significance based on the overall impact to the Group financial statements. This
assessment considered the balances and classes of transaction in each component which related to
significant risks as determined in our audit assessment, as well as any other balances or classes of
transaction that are deemed to be significant when compared to the Group financial statements. We
assessed each entity in relation to the risk of management override of controls.
The Group financial statements are a consolidation of the Parent Company, Carclo plc, seven trading
subsidiaries, and five non-trading holding entities. Based on our risk assessment, three components
were subject to full scope audits, four components were subject to specific scope procedures and one
component was subject to analytical review procedures.
The components within the scope of our audit work accounted for the following percentages of the
Group’s results:
Number of
components
Total Group
revenue
Group profit
before tax
Total
Group assets
Full scope
3
73.2%
75.6%
65.1%
Specified scope
4
23.4%
17.9%
32.8%
Total
7
96.6%
93.5%
97.9%
The audit of the UK and US components, including the audit of the Group, were undertaken by the
group audit team. The group audit team instructed component auditors to carry out audit procedures in
relation to components in China, India and the Czech Republic. The instructions covered the significant
areas of audit focus including, where relevant, the key audit matters detailed below and the information
to be reported back to the group audit team. Additionally, key areas of audit work completed by
component auditors were reviewed by the group audit team.
As part of the process, the group audit team directed the audit strategy and held meetings with all the
component auditors at both the planning and completion stage, as well as during the audit fieldwork
as required. At these meetings, the group audit team discussed the audit strategy and the findings
reported to the group audit team by the component auditors. As part of the audit planning process
for specific risk areas we directed the component audit teams on key metrics such as methodology
of testing, sample sizes and specific tests to perform such that significant risk areas were assessed
homogenously throughout the group.
We communicated with both the Directors and the Audit Committee our planned audit work via our
audit planning report and relevant discussions throughout the audit process. We have communicated
our findings
to the Audit Committee and the Directors in our final audit findings report.
At the Group level, we reviewed the consolidation process and performed analytical procedures to reach
a conclusion that the aggregated financial information was materially fairly stated.
to the members of Carclo plc
Independent auditor’s report
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
80
to the members of Carclo plc
Independent auditor’s report
continued
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors’ use of the going concern
basis of accounting in the preparation of the financial statements is appropriate.
Our evaluation of the directors’ assessment of the entity’s ability to continue to adopt the going concern
basis of accounting included:
•
Obtaining and reviewing management’s going concern assessment for a period of 12 months from
date of signing of the financial statements;
•
Obtaining an understanding of the key controls over management’s going concern forecast including
those over the inputs and assumptions used in the forecast;
•
Obtaining management’s forecasts and performing arithmetical and model integrity checks on the
forecast cash flows;
•
Challenging management’s key trading, working capital and cash flow assumptions made within the
forecasts by comparing management’s forecasted position against their historic position;
•
Assessing the accuracy of management’s ability to forecast by comparing management’s past
forecasts to actual results and considering the impact on the plausibility of the going concern
forecast;
•
Obtaining management’s downside scenarios (including management’s downside case (lower
revenue, lower margin), which reflect management’s assessment of uncertainties. We further
evaluated the assumptions regarding the forecast period under each of these scenarios;
•
Performing a review of any cost mitigants included in management’s downside scenarios to ensure
those mitigants are reasonable and actionable;
•
Evaluating management’s assessment on whether there were any breaches in covenants in the going
concern period;
•
Reviewing actual post year end performance alongside our assessment of the appropriateness of the
assumptions made in managements going concern assessment;
•
Obtaining the relevant supporting documentation in relation to the covenants applicable to the BZ
refinancing and obtaining an understanding of the covenants and management’s testing of covenant
compliance applicable for the forecast period;
•
Reviewing in all scenarios provided, both liquidity and covenant compliance as well as a review of in
year and post year end covenant compliance reporting;
•
Where appropriate, performing our own sensitivity analysis of the assessment provided by
management; and
•
Reviewing the appropriateness of the disclosures on going concern in the financial statements.
Based on the work we have performed, we have not identified any material uncertainties relating to
events or conditions that, individually or collectively, may cast significant doubt on the Group and Parent
Company’s
ability to continue as a going concern for a period of at least twelve months from when the
financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described
in the relevant sections of this report.
However, because not all future events or conditions can be
predicted, this statement is not a guarantee as to the Group’s ability to continue as a going concern.
In relation to the Parent Company’s reporting on how it has applied the UK Corporate Governance
Code, we have nothing material to add or draw attention to in relation to the Directors’ statement in the
financial statements about whether the Directors considered it appropriate to adopt the going concern
basis of accounting.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial statements of the current period and include the most significant assessed
risks of material misstatement (whether or not due to fraud) we identified, including those which had the
greatest effect on:
•
the overall audit strategy;
•
the allocation of resources in the audit; and
•
directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial statements as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on these matters.
In determining the key audit matters we considered the:
•
Areas of higher risks of material misstatement or significant risks identified in accordance with ISA
(UK) 315
•
Significant audit judgements on financial statement line items that involved significant management
judgement such as accounting estimates, and
•
The impact of significant events and transactions during the period covered by the audit.
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
81
to the members of Carclo plc
Independent auditor’s report
continued
Key audit matters
continued
The following table summarises the key audit matters we have identified and the rationale for their
identification, together with how we responded to each in our audit.
Key Audit Matter
Accuracy and overstatement of revenue from Design & Engineering (D&E)
(Group) relating to cut-off
Under ISA (UK) 240 ‘The Auditor’s Responsibilities Relating to Fraud in an Audit of Financial Statements’, there is a
rebuttable presumption that there is a risk of fraud in revenue recognition.
Risk assessment:
•
We identified a risk of overstatement of revenue driven by the Group’s listed status and the importance of
revenue growth as a key performance indicator;
•
We determined that a significant risk existed in relation to revenue recognition at or near year-end, where cut-
off errors could result in overstatement of revenue. This risk was heightened by the presence of performance-
related bonuses and share options, which created an incentive for management to overstate revenue to
present improved results; and
•
We considered revenue from design & engineering to be particularly susceptible to material misstatement,
whether due to fraud or error, due to the significant judgement involved in determining both the timing and
basis of revenue recognition. This resulted in an increased risk of inappropriate recognition throughout the
year and particularly at year-end, especially where projects spanned the reporting period.
How our scope addressed this matter
In responding to the key audit matter, the audit procedures included but were not
limited to:
•
Performing a detailed walkthrough of the Order to Cash (OTC) process to obtain an understanding of the revenue
process and identify key controls;
•
Obtaining and reconciling the project income trackers to the balances per trial balance;
•
Critically reviewing management’s IFRS 15 analysis and challenging key assumptions and estimates;
•
For a sample of revenue transactions, testing occurrence through agreeing to supporting evidence such as
purchase orders, delivery confirmations, sales invoices and proof of cash receipt. Agreeing labour costs included
within project calculations to supporting budgeted hours and hourly rates and assessed the reasonableness of key
assumptions through comparison to supporting payroll information and discussions with management;
•
Performing analysis on the change in budgeted costs and prices for projects to assess the reasonableness of
budgeted figures from one year to the next, through inspection of supporting documentation and comparison to
post year-end project activity where available;
•
Performing analytical procedures over labour costs, including assessing staff utilisation rates, comparing labour
costs allocated within the project tracker to total payroll costs and independently recalculating the standard
labour cost per hour applied within the revenue recognition model. From our assessment and based on sensitivities
performed, we concluded that labour would have an immaterial impact on revenue;
•
Performing an assessment of onerous contracts and tested management’s rationale of the provision made
quantifying the potential impact of any over recognition of revenue; and
•
For projects within the tool build phase, obtaining tool card documentation and reviewing invoices incurred up to
two months post year-end to identify potential unrecorded liabilities and revenue.
Key observations
Our audit testing on the design and engineering revenue stream did not identify any material misstatements.
Key Audit Matter
Overstatement of revenue from Manufacturing Solutions (Group) relating to
cut-off
Under ISA (UK) 240 ‘The Auditor’s Responsibilities Relating to Fraud in an Audit of Financial Statements’, there is
a rebuttable presumption that there is a risk of fraud in revenue recognition.
Risk assessment:
•
We identified a risk of overstatement of revenue driven by the Group’s listed status and the importance of
revenue growth as a key performance indicator;
•
We determined that a significant risk existed in relation to revenue recognition at or near year-end, where cut-
off errors could result in overstatement of revenue. This risk was heightened by the presence of performance-
related bonuses and share options, which created an incentive for management to overstate revenue to
present improved results; and
•
The key risks identified in relation to this revenue stream related to the incorrect recognition of revenue in the
accounting period due to an inappropriate application of the relevant INCOTERMS and the point at which the
performance obligation had been met.
How our scope addressed this matter
In responding to the key audit matter, the audit procedures included but were not
limited to:
•
Performing a detailed walkthrough of the Order to Cash (OTC) process to obtain an understanding of the revenue
process and identify key controls;
•
Obtaining and reviewing management’s IFRS 15 assessments to identify performance obligations within contracts
and assessed whether revenue recognition was in line with IFRS 15;
•
Utilising data analytics for the full-scope entities to detect unusual account pairings, outliers in the expected
revenue and receivables cycle which were further investigated to ensure appropriateness;
•
For a sample of transactions, performing substantive testing by:
•
Agreeing transactions to underlying documentation, including purchase orders, invoices, and customer
contracts;
•
Assessing applicable Incoterms and obtaining evidence of delivery or dispatch to confirm that the timing of
revenue recognition was appropriate;
•
Performing cut-off procedures around year-end to ensure that revenue was recognised in the correct
accounting period, in accordance with the accounting policy requiring recognition upon delivery;
•
Considering the impact of deferred and accrued income by reviewing sales invoices around year-end and
obtaining supporting evidence of delivery to ensure revenue was recognised in the appropriate period.
Key observations
Our audit testing on the manufacturing solutions revenue stream did not identify any material misstatements.
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
82
to the members of Carclo plc
Independent auditor’s report
continued
Key Audit Matter
Valuation of goodwill (Group)
We identified the valuation of goodwill allocated to the Carclo Technical Plastics (CTP) Cash Generating Units
(‘CGUs’) as one of the most significant assessed risks of material misstatement due to error.
The CTP CGU has goodwill with a carrying value of £21.9million (2025: £21.7 million) allocated to it.
International accounting standard (‘IAS’) 36 ‘Impairment of assets’ requires annual testing of goodwill for
impairment. Management prepares impairment models to assess the recoverable amount of each CGU and then
compares this to the carrying value of the CGU to assess for impairment.
Determining the recoverable amount of each CGU requires management to make significant judgements over
several key inputs of the value-in-use discounted cash flow models.
How our scope addressed this matter
In responding to the key audit matter, the audit procedures included but
were not limited to:
•
Obtaining management’s goodwill impairment assessment, including supporting memoranda, calculations, and
sensitivity analysis;
•
Assessing whether the CGUs were appropriately identified and challenging management’s determination based on
our understanding of the Group;
•
Reviewing the goodwill impairment assessment for the CGU and challenging the key assumptions and estimates
used in the discounted cash flow models to assess the reasonableness of the valuation and assessing the
appropriateness of the cash flow forecasts, including their allocation to the CGU;
•
Performing sensitivity analyses on the cash flows used in the impairment assessment and evaluating the impact of
changes in key assumptions;
•
Considering both internal and external indicators of impairment as prescribed by IAS 36, as well as those identified
by management;
•
Performing a review of the discount rate applied, including the involvement of an auditor’s expert where
appropriate;
•
Comparing historic cash flow forecasts to actual results to assess management’s ability to accurately forecast
and also considered historic trends relating to the EBITDA margin generated by the CTP division to determine the
reasonableness of the scenario analysis performed by management; and
•
Reviewing financial statements disclosures to ensure these are adequate and no material departures noted.
Key observations
Based on procedures performed, we conclude that Goodwill balance at 31 March 2026 is fairly stated.
Key Audit Matter
Valuation of investments in subsidiary undertakings (Parent Company)
Investments in subsidiary undertakings of £23.6 million (2025: £23.6 million) are accounted for at cost less
provision for impairment in the Parent company balance sheet at 31 March 2026.
Investments are tested for impairment if impairment indicators exist.
If such indicators do exist, the recoverable amounts of the investments in subsidiaries are estimated to determine
whether there is an impairment loss and if so, the extent of such loss, which is recognised in the income statement.
Due to the presence of impairment indicators and the high level of estimation uncertainty present in the
impairment test, we have identified the valuation of the investments held by the Parent company to be a key audit
matter.
How our scope addressed this matter
In responding to the key audit matter, the audit procedures included but
were not limited to:
•
Obtaining and reviewing management’s impairment assessment, including the supporting paper and underlying
calculations;
•
Challenging management’s identification of impairment indicators based on our understanding of the business
and our review of subsidiary performance. Performing testing on individual investments by comparing carrying
values to the net assets of the subsidiaries to identify potential indicators of impairment;
•
Assessing the appropriateness of the valuation methodology applied by management and engaging an internal
valuation expert to evaluate the discount rates used;
•
Reviewing the sensitivity analysis prepared by management and post year end performance of the relevant
subsidiaries to assess the adequacy of headroom or the need for impairment;
•
Evaluating the disclosures made in the financial statements to assess compliance with IFRS requirements.
Key observations
Based on procedures performed, we conclude that investment in subsidiary undertakings at 31 March 2026 is fairly
stated.
Key audit matters
continued
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
83
to the members of Carclo plc
Independent auditor’s report
continued
Our application of materiality
The scope and focus of our audit were influenced by our assessment and application of materiality. We define
materiality as the magnitude of misstatement that could reasonably be expected to influence the readers and
the economic decisions of the users of the financial statements. We use materiality to determine the scope of our
audit and the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements, both
individually and on the financial statements as a whole.
Group Financial Statements
Company Financial Statements
Materiality
£1,140,000 (2025: £1,200,000)
£600,000 (2025: £625,000)
Benchmark
Materiality for the Group was
determined to be 1% (2025: 1%) of
Revenue for the year, based on the
point at which we performed our
audit planning and risk assessment.
Materiality for the Group was
determined to be 1% (2025: 1%) of
total assets for the year, based on
the point at which we performed our
audit planning and risk assessment.
Basis for, and judgements
used in the determination
of materiality
Revenue has been used as the
basis for materiality because profit
before tax has varied significantly
year on year. Revenue has declined
year on year but is considered to be
a is more stable measure.
When considering the usage of
Profit Before Tax (“PBT”) and
Revenue, the revenue metric was
deemed the most appropriate on
the basis that revenue is deemed a
key figure for investors, alongside
presenting the most stable figure
of the two.
Total assets was determined to be
the most appropriate benchmark
for the Parent company because
it is most reflective of the financial
position of the Parent and the
nature of its operations.
Performance materiality -
Based on our risk assessment and our review of the Group’s control
environment, performance materiality was set at 65% (2025: 65%) of materiality, being £741,000 (2025:
£780,000) for the Group and £390,000 (2025: £407,000) for the Parent Company. 65% was set as
the benchmark for performance materiality to reflect our assessment and understanding of the control
environment with consideration of findings in previous audits.
Reporting threshold -
The reporting threshold to the audit committee was set as 5% (2025: 2.8%)
of materiality, being £57,200 (2025: £34,000) for the Group and £30,000 (2025: £15,000) for the
Company.
Differences in materiality levels from the previous audit –
There has been no change in the basis
of materiality and the percentage thresholds compared to the previous year however the reporting
thresholds have changed by virtue of a change in the underlying balances utilised as the metrics for
materiality. The decrease in materiality levels compared to previous year is on account of the decrease in
revenue and total assets compared to the year ended 31 March 2025.
Other information
The directors are responsible for the other information. The other information comprises the
information included in the annual report, other than the financial statements and our auditor’s report
thereon. Our opinion on the financial statements does not cover the other information and, except to
the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion
thereon.
In connection with our audit of the financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with
the financial statements or our knowledge obtained in the audit or otherwise appears to be materially
misstated. If we identify such material inconsistencies or apparent material misstatements, we are
required to determine whether there is a material misstatement in the financial statements or a material
misstatement of the other information. If, based on the work we have performed, we conclude that there
is a material misstatement of this other information, we are required to report that fact. We have nothing
to report in this regard.
Corporate Governance Statement
The UK Listing Rules require us to review the Directors’ statement in relation to going concern, longer-
term viability and that part of the Corporate Governance Statement relating to the Group’s compliance
with the provisions of the UK Corporate Governance Code specified for our review. Based on the work
undertaken as part of our audit, we have concluded that each of the following elements of the Corporate
Governance Statement is materially consistent with the financial statements and our knowledge
obtained during the audit.
Going concern and
viability statement
•
The Directors’ statement with regards to the appropriateness of
adopting the going concern basis of accounting as set out on page 76;
•
The Director’s statement on fair, balanced and understandable, set
out on page 79
•
The Directors’ statement on whether they have a reasonable
expectation that the Group will be able to continue in operation as set
out on page 49.
Other code provisions
•
Board’s confirmation that it has carried out a robust assessment of
the emerging and principal risks set out on pages 42 to 49;
•
The section of the Annual Report that describes the review of
effectiveness of risk management and internal control systems set
out on page 55; and
•
The section describing the work of the Audit Committee set out on
pages 55 to 57
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
84
to the members of Carclo plc
Independent auditor’s report
continued
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
•
the information given in the strategic report and the directors’ report for the financial year for which
the financial statements are prepared is consistent with the financial statements;
•
the strategic report and the directors’ report have been prepared in accordance with applicable legal
requirements;
•
the part of the Directors’ remuneration report to be audited has been properly prepared in
accordance with the Companies Act 2006; and
•
the information presented in the Corporate Governance statement about internal controls and risk
management systems in relation to financial reporting processes is consistent with the financial
statements. We have nothing to report arising from our responsibility to report if a corporate
governance statement has not been prepared by the Group.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Group and the Parent company and its
environment obtained in the course of the audit, we have not identified material misstatements in the
strategic report or the directors’ report.
We have nothing to report in respect of the following matters in relation to which the Companies Act
2006 requires us to report to you if, in our opinion:
•
adequate accounting records have not been kept by the Group, or returns adequate for our audit
have not been received from branches not visited by us; or
•
the Group and Parent company financial statements are not in agreement with the accounting
records and returns; or
•
certain disclosures of directors’ remuneration specified by law are not made;
•
we have not received all the information and explanations we require for our audit; or
A corporate governance statement has not been prepared by the parent company.
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement, the directors are responsible for the
preparation of the financial statements and for being satisfied that they give a true and fair view, and
for such internal control as the directors determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Group’s and the
Parent company’s ability to continue as a going concern, disclosing, as applicable, matters related to
going concern and using the going concern basis of accounting unless the directors either intend to
liquidate the Group or the Parent company or to cease operations, or have no realistic alternative but to
do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report
that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We
design procedures in line with our responsibilities, outlined above, to detect material misstatements
in respect of irregularities, including fraud. The extent to which our procedures are capable of
detecting irregularities, including fraud is detailed below. However, the primary responsibility for the
prevention and detection of fraud rests with both those charged with governance of the Company and
management.
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
85
to the members of Carclo plc
Independent auditor’s report
continued
Explanation as to what extent the audit was considered capable of detecting
irregularities, including fraud.
Based on our understanding of the company and industry, we identified that the principal risks of non-
compliance with laws and regulations related to regulatory requirements for the Investment advisory
business and trade regulations, and we considered the extent to which non-compliance might have a
material effect on the financial statements. We also considered those laws and regulations that have a
direct impact on the preparation of the financial statements such as the Companies Act 2006, Listing
rules, FCA regulation, income tax, payroll tax and sales tax.
We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial
statements (including the risk of override of controls) and determined that the principal risks were
related to posting inappropriate journal entries to revenue and management bias in accounting
estimates. Audit procedures performed by the engagement team included:
•
Discussions with management including consideration of known or suspected instances of non-
compliance with laws and regulation and fraud;
•
Evaluating management’s controls designed to prevent and detect irregularities;
•
Identification and review of manual journals, in particular journal entries which shared key risk
characteristics;
•
The review and challenge of assumptions, estimates and judgements made by management in their
recognition of accounting estimates; and
•
Reviewing the financial statement disclosures and testing to supporting documentation to assess
compliance with provisions of relevant laws and regulations described as having a direct effect on the
financial statements.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities,
including those leading to a material misstatement in the financial statements or non-compliance
with regulation. This risk increases the more that compliance with a law or regulation is removed from
the events and transactions reflected in the financial statements, as we will be less likely to become
aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due
to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or
misrepresentation.
A further description of our responsibilities for the audit of the financial statements is located on the
Financial Reporting Council’s website at:
www.frc.org.uk/auditorsresponsibilities
. This description
forms part of our auditor’s report.
Other matters which we are required to address
Auditor tenure
Following the recommendation of the Board of Directors, with effect from 26 September 2025, we
were appointed by the shareholders to audit financial statements for the year ended 31 March 2026 and
subsequent financial periods. The period of total uninterrupted engagement of the firm at the date of
this audit report is one year.
Consistency of the audit report with the additional report to the Audit Committee
Our audit opinion is consistent with the additional report to the Audit Committee we are required to
provide in accordance with ISAs (UK).
Non-audit and other services
No non-audit services or additional services in addition to the audit have been provided and we
remained independent of the Company in conducting the audit.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part
16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the
company’s members those matters we are required to state to them in an Auditor’s report and for no
other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to
anyone other than the company and the company’s members as a body, for our audit work, for this
report, or for the opinions we have formed.
Laura Mott (Senior Statutory Auditor)
For and on behalf of HaysMac LLP, Statutory Auditors
10 Queen Street Place
London
EC4R 1AG
30 June 2026
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
86
for the year ended 31 March 2026
Consolidated income statement
Notes
2026
£000
2025
£000
Revenue
5
Underlying operating profit
3
Non-underlying items
8
(336 )
(2,258 )
Operating profit
3, 6
Finance revenue
9
Finance expense
9
(7,478 )
(5,499 )
Profit before tax
Income tax
10
(2,137 )
(1,780 )
Profit for the year
Attributable to:
Equity holders of the Company
Non-controlling interests
Equity holders of the Company
Profit per ordinary share
Basic
11
Diluted
11
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
87
for the year ended 31 March 2026
Consolidated statement of comprehensive income
Notes
2026
£000
2025
£000
Profit for the year
Other comprehensive income/(expense)
Items that will not be reclassified to the income statement
Remeasurement losses on defined benefit pension scheme
21
(15,253 )
Deferred tax arising
Total items that will not be reclassified to the income statement
(15,253 )
Items that may in the future be reclassified to the income statement
Foreign exchange translation gains/(losses)
(955 )
Net investment hedge
19, 26
(141 )
Deferred tax arising
20
(1 )
Total items that may in the future be reclassified to the income statement
(571 )
Other comprehensive income/(expense), net of tax
(15,824 )
Total comprehensive income/(expense) for the year
(14,952 )
Attributable to:
Equity holders of the Company
(14,952 )
Equity holders of the Company
(14,952 )
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
88
as at 31 March 2026
Consolidated statement of financial position
Notes
2026
£000
2025
£000
Non-current assets
Intangible assets
13
Property, plant and equipment
14
Deferred tax assets
20
Contract assets
16
Trade and other receivables
17
Total non-current assets
Current assets
Inventories
15
Contract assets
16
Trade and other receivables
17
Cash and cash deposits
18
Current tax assets
Total current assets
Total assets
Current liabilities
Loans and borrowings
19
Trade payables
23
Other payables
23
Current tax liabilities
Contract liabilities
5
Total current liabilities
Notes
2026
£000
2025
£000
Non-current liabilities
Loans and borrowings
19
Deferred tax liabilities
20
Provisions
22
Retirement benefit obligations
21
Total non-current liabilities
Total liabilities
Net liabilities
(8,669 )
(11,840 )
Equity
Ordinary share capital issued
24
Share premium
Translation reserve
25
Retained earnings
25
(26,687 )
(29,494 )
Total equity attributable to equity
holders of the Company
(8,643 )
(11,814 )
Non-controlling interests
(26 )
(26 )
Total equity
(8,669 )
(11,840 )
Frank Doorenbosch
Ian Tichias
Chief Executive Officer
Chief Financial Officer
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
89
for the year ended 31 March 2026
Consolidated statement of changes in equity
Attributable to equity holders of the Company
Notes
Share
capital
£000
Share
premium
£000
Translation
reserve
£000
Retained
earnings
£000
Total
£000
Non-controlling
interests
£000
Total
equity
£000
Balance at 31 March and 1 April 2024
(15,135 )
(26 )
Profit for the year
Other comprehensive income/(expense):
Foreign exchange translation differences
(955 )
(955 )
(955 )
Net investment hedge
19, 26
Remeasurement losses on defined benefit pension scheme
21
(15,253 )
(15,253 )
(15,253 )
Taxation on items above
20
Total comprehensive expense for the year
(571 )
(14,381 )
(14,952 )
(14,952 )
Transactions with owners recorded directly in equity:
Share-based payments
24
Balance at 31 March and 1 April 2025
(29,494 )
(11,814 )
(26 )
(11,840 )
Profit for the year
Other comprehensive income/(expense):
Foreign exchange translation differences
Net investment hedge
19, 26
(141 )
(141 )
(141 )
Remeasurement losses on defined benefit pension scheme
21
Taxation on items above
20
(1 )
(1 )
(1 )
Total comprehensive income for the year
Transactions with owners recorded directly in equity:
Share-based payments
24
Balance at 31 March 2026
(26,687 )
(8,643 )
(26 )
(8,669 )
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
90
for the year ended 31 March 2026
Consolidated statement of cash flows
Notes
2026
£000
2025
£000
Cash generated from operations
27
Interest paid
(3,924 )
(3,694 )
Tax paid
(1,406 )
(1,259 )
Defined benefit pension scheme contributions net of Company-settled administration costs
(2,518 )
(2,633 )
Net cash from operating activities
Cash flows from/(used in) investing activities
Proceeds from sale of property, plant and equipment
Interest received
Purchase of property, plant and equipment
(2,522 )
(1,054 )
Purchase of intangible assets
(333 )
(49 )
Net cash used in investing activities
(2,773 )
(447 )
Cash flows used in financing activities
19
Drawings on existing and new facilities
Refinancing costs associated with the new facility
(2,544 )
(150 )
Additional defined benefit pension scheme contributions paid to release security for new financing facility
(5,100 )
Repayment of borrowings excluding lease liabilities
(24,870 )
(2,525 )
Repayment of other loan facilities
(95 )
Repayment of lease liabilities
(2,973 )
(4,228 )
Net cash used in financing activities
(5,576 )
(6,998 )
Net (decrease)/increase in cash and cash equivalents
(4,204 )
Cash and cash equivalents at beginning of year
Effect of exchange rate fluctuations on cash held and cash equivalents
(7 )
(29 )
Cash and cash equivalents at end of year
Cash and cash equivalents comprise:
Cash and cash deposits
18
Bank overdrafts
19
(765 )
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
91
Strategic report
Corporate governance
Financial statements
Additional information
92
Carclo plc
Annual report and accounts 2026
Notes to the consolidated financial statements
for the year ended 31 March 2026
i) General information
whose shares are listed on the London Stock Exchange, is incorporated and domiciled in the UK and is
registered in England under the Companies Act 2006.
The principal activities of the Company and its subsidiaries (the “Group”) and the nature of the Group’s
operations are set out in note 3.
The financial statements are presented in sterling, which is Carclo plc’s functional and presentational
currency. Certain Group subsidiary entities have functional currencies other than sterling. The financial
position and performance of all such subsidiary entities is translated into the presentational currency
(sterling) in accordance with the foreign currencies accounting policy as detailed within the accounting
policy section of this note. All amounts disclosed in the financial statements and notes have been
rounded off to the nearest thousand pounds unless otherwise stated.
Judgements made by the Directors in the application of these accounting policies that have a significant
effect on the financial statements and estimates with a significant risk of material adjustment in the next
year are discussed in note 2.
The consolidated financial statements have been prepared and approved by the Directors in accordance
with UK-adopted International Accounting Standards and with the requirements of the Companies Act
2006.
The accounting policies have been applied consistently to all periods presented in the consolidated
financial statements, unless otherwise stated.
The Company has elected to prepare its parent company financial statements in accordance with
A £36 million asset-backed borrowing facility with BZ, that was announced on 24 April 2025, provides
available borrowings for a three-year term to April 2028. The level of borrowings is contingent upon
the value of current and non-current asset categories held by the Group’s UK and US trading subsidiaries.
There are three primary financial covenants required to be tested under the BZ facility agreement,
as follows:
Covenant |
Definition |
Threshold |
Minimum EBITDA |
Underlying Group EBITDA calculated on a last six |
No less than 75% of |
months basis |
budget |
|
Fixed Charge Cover |
Underlying Group EBITDA divided by the sum |
Until 31 March 2027 |
Ratio (“FCCR”) |
of fixed charges comprising debt service costs, |
no less than 1:1 |
debt repayments, pension scheme contributions, |
After 31 March 2027 |
|
| tax payments, capital expenditure and dividends |
no less than 1.05:1 |
|
or other capital distributions calculated on a last |
||
twelve months basis |
||
CAPEX |
Cash paid on tangible and intangible fixed assets |
No more than 120% |
measured annually for the twelve months to |
of the annual budget |
|
31 March |
The Group remained compliant with the Minimum EBITDA and FCCR financial covenants throughout
the year ended 31 March 2026. In accordance with the facility agreement, these covenants were tested
monthly from May 2025 and, following twelve months of compliance under the agreement, including
compliance in the two preceding quarters, testing has moved to a quarterly basis. The CAPEX covenant
is tested annually from the start of each reporting period.
The Group has prepared a forecast of financial projections for the three-year period to 31 March
2029, which has been utilised as the base case underpinning the going concern assessment for the
period through June 2027, being 15 months after the year end and 12 months from when the financial
statements are authorised for issue. These projections include assumptions around revenue growth,
modest margin improvements, consistent working capital trends and stable interest rates. The Directors
have reviewed cash flow and covenant forecasts over this period considering the Group’s available
borrowing facilities and the terms of the arrangements with the Group’s lender and the UK defined
benefit pension scheme. The forecast shows adequate headroom and supports the position the Group
can operate within its available borrowing facilities and in compliance with covenants throughout this
period.
The Group is subject to a number of key risks and uncertainties, as detailed in the principal risks and
uncertainties section on pages 42 to 48. Mitigating actions to address the risks are also set out in
that section of the report. These risks and uncertainties have been considered in the base case, and
downside sensitivities have been modelled accordingly. These sensitivities consider the uncertainties
facing the Group and model the impact of a range of severe but plausible downside scenarios, as well
as considering the impact of aggregating certain of these, and shows that the Group would be able to
operate within its available facilities and meet its agreed covenants were these scenarios to arise.
The specific climate-related matters set out in the TCFD section on pages 33 to 41 have been
considered and they are not expected to have a significant impact on the Group’s going concern.
Carclo plc
Annual report and accounts 2026
continued
Notes to the consolidated financial statements
for the year ended 31 March 2026
Strategic report
Corporate governance
Financial statements
Additional information
93
1 Presentation of the financial statements
continued
iii) Going concern
continued
The severe but plausible downside sensitivities modelled included reductions in forecast revenue of up
to 6.6%, a 4% increase in direct material costs (equivalent to approximately 2.2% contribution margin
erosion) and a 2% increase in interest rates. The downside scenario modelling assumes management
bonuses are not payable where the relevant performance conditions are not achieved but does not
include the benefit of any other mitigating actions available to management.
Under each of the standalone downside scenarios modelled, the Group maintains adequate liquidity
throughout the assessment period and remains compliant with all financial covenants. The Directors
also assessed a combined downside scenario incorporating both a significant reduction in forecast
revenue and a sustained increase in direct material costs. Under this combined scenario, no liquidity
shortfall arises; however, there is a temporary breach of the FCCR covenant. The Directors consider
the concurrent occurrence of these downside assumptions to be remote. Furthermore, the scenario
does not reflect a range of mitigating actions available to management, including the reduction of
discretionary expenditure and the deferral of non-essential capital expenditure. Modelling performed
by management demonstrates that actions considered achievable and within management’s control
would be sufficient to restore covenant compliance under this scenario.
Given that FCCR represented the most sensitive covenant within the Group’s financing arrangements,
the Directors performed additional covenant-focused downside testing, including scenarios in which
EBITDA remained broadly flat against FY26 levels and reduced by 10% compared with FY26. While
these scenarios resulted in reduced covenant headroom, management identified specific mitigating
actions that are considered achievable and within management’s control and which would be sufficient
to maintain compliance with the Group’s covenant requirements.
The Group is not exposed to high-risk sectors or countries but is dependent on certain key customers,
creating risks and uncertainties, which are documented in detail alongside mitigating actions in the
principal risks and uncertainties section.
It should be noted that the Group is operating in a period of material geopolitical and macroeconomic
uncertainty. The Directors continue to monitor these risks and their plausible impact; however, the
potential severity is dependent upon many external factors and is difficult to predict.
Accordingly, the
financial impact of these risks may materially differ from the Directors’ current view.
At 31 March 2026, the Group reports net liabilities of £8.7 million (FY25: £11.8 million net liabilities)
largely attributable to the IAS 19 valuation of the UK defined benefit pension liability of £46.8 million
(FY25: £51.8 million).
Pension contributions are funded from cash generated by operations and have
been reflected in the cash flow and covenant forecasts reviewed by the Directors. Given that these
amounts are considered manageable by the Directors, the balance sheet presentation of net liabilities at
31 March 2026 does not imply an inability for the Group to meet its third-party liabilities over the going
concern period.
On the basis of the base case forecast and the severe but plausible sensitivity testing, the Directors
have determined that it is reasonable to assume that the Group will continue to operate within available
borrowing facilities available and adhere to the covenant tests to which it is subject throughout at least
the 12 month period from the date of signing the financial statements through to June 2027.
The following new standards and amendments to existing standards became effective in January 2026
and have been adopted in the consolidated financial statements for the first time during the year ended
31 March 2026.
Effective for | ||
accounting periods | ||
Date issued | beginning on or after | |
Amendments to IFRS 9 Financial Instruments and IFRS 7 | May 2024 | January 2026 |
Financial Instruments: Disclosures | ||
• Clarifies the classification and measurement of financial | ||
instruments. | ||
Annual Improvements to IFRS Accounting Standards – | June 2024 | January 2026 |
Amendments to: | ||
• IFRS 1 First-time Adoption of International Financial Reporting | ||
Standards | ||
• IFRS 7 Financial Instruments: Disclosures and its accompanying | ||
guidance on implementing IFRS 7 | ||
• IFRS 9 Financial Instruments | ||
• IFRS 10 Consolidated Financial Statements | ||
• IAS 7 Statement of Cash Flows |
The above have been assessed as having no financial or disclosure impact on these consolidated
financial statements
The following standards, amendments and interpretations were in issue but were not yet effective at the
balance sheet date. These have been endorsed by the UK Endorsement Board. These standards have
not been applied when preparing the consolidated financial statements for the year ended 31 March
2026:
Effective for | ||
accounting periods | ||
Date issued | beginning on or after | |
IFRS 18 Presentation and Disclosure in Financial Statements | April 2024 | January 2027 |
• Specifies the requirements for presentation and disclosure of | ||
information in financial statements for all entities applying IFRS. | ||
IFRS 19 Subsidiaries without Public Accountability: | May 2024 | January 2027 |
Disclosures | ||
• Sets out the disclosure requirements an eligible entity is | ||
permitted to apply instead of the disclosure requirements in | ||
other IFRS Accounting Standards |
It is not anticipated that the application of the above will have a significant financial impact in future
years, however IFRS 18 is likely to require presentational and disclosure changes to the financial
Carclo plc
Annual report and accounts 2026
continued
Notes to the consolidated financial statements
for the year ended 31 March 2026
Strategic report
Corporate governance
Financial statements
Additional information
94
1 Presentation of the financial statements
continued
a) Basis of accounting
The financial statements are prepared on the historical cost basis except that derivative financial
instruments, share options and defined benefit pension plan assets are stated at their fair value.
Non-current assets and disposal groups held for sale are stated at the lower of carrying amount and fair
value less costs to sell.
The Group financial statements consolidate those of the Company and its subsidiaries (together
referred to as the “Group”). The parent company financial statements present information about the
Company as a separate entity and not about its Group. The results of any subsidiaries sold or acquired
are included in the consolidated income statement up to, or from, the date control passes. Intra-group
transactions, balances and profits are eliminated fully on consolidation. On acquisition of a subsidiary, all
of the identifiable assets and liabilities existing at the date of acquisition are recorded at their fair values
reflecting their condition at that date.
Business combinations are accounted for using the acquisition method as at the acquisition date, which
is the date on which control is transferred to the Group. An entity is controlled by the Group regardless
of the level of the Group’s equity interest in the entity, when the Group is exposed, or has the rights, to
variable returns from its involvement with the entity and has the ability to affect those returns through
its power over the entity. In assessing control, the Group takes into consideration potential voting rights
that currently are exercisable.
The Group measures goodwill at the acquisition date as:
•
the fair value of the consideration transferred; plus
•
the recognised amount of any non-controlling interests in the acquiree; plus
•
if the business combination is achieved in stages, the fair value of the pre-existing equity interest in
the acquiree; less
•
the net recognised amount of the identifiable assets acquired and liabilities assumed.
Any contingent consideration payable is recognised at fair value at the acquisition date. If the contingent
consideration is classified as equity, it is not remeasured and settlement is accounted for within equity.
Otherwise, subsequent changes to the fair value of the contingent consideration are recognised in profit
or loss.
The consideration transferred does not include amounts related to the settlement of pre-existing
relationships. Such amounts are generally recognised in profit or loss.
Transaction costs other than those associated with the issue of debt or equity securities, that the Group
Acquisitions of non-controlling interests are accounted for as transactions with owners in their capacity
as owners and therefore no goodwill is recognised as a result. Adjustments to non-controlling interests
arising from transactions that do not involve the loss of control are based on a proportionate amount of
In respect of business combinations that occurred since 1 April 2004, goodwill arising on consolidation
represents the excess of the fair value of the consideration given over the fair value of the identifiable
net assets acquired. Goodwill arising on acquisition of subsidiaries, joint ventures and businesses is
capitalised as an asset.
In accordance with IFRS 1 and IFRS 3, goodwill at 1 April 2004 has been frozen and will not be amortised.
Goodwill is allocated to cash generating units and is subject to an annual impairment review, with any
impairment losses being recognised immediately in the income statement.
Any goodwill arising on the acquisition of an overseas subsidiary is retranslated at the balance sheet
Intangible assets that are acquired by the Group are stated at cost less accumulated amortisation (see
accounting policy e) and impairment losses (see accounting policy v).
Expenditure on research activities, undertaken with the prospect of gaining new scientific or technical
knowledge and understanding, is recognised in the income statement as an expense as incurred.
Expenditure on development activities, whereby research findings are applied to a plan or design
for the production of new or substantially improved products and processes, is capitalised if the
product or process is technically and commercially feasible and the Group has sufficient resources to
complete development. The expenditure capitalised includes the cost of materials, direct labour and
an appropriate proportion of overheads. Other development expenditure is recognised in the income
statement as an expense as incurred. Capitalised development expenditure is stated at cost less
accumulated amortisation (see accounting policy e) and impairment losses (see accounting policy v).
Expenditure on internally generated goodwill and brands is recognised in the income statement as an
expense as incurred.
Subsequent expenditure on capitalised intangible assets is capitalised only when it increases the future
economic benefits embodied in the specific asset to which it relates. All other expenditure is expensed
Intangible assets, other than goodwill, are amortised on a straight-line basis to write off the cost of the
asset, less estimated residual value, over the estimated economic life of the asset when they become
available for use.
Patents and development costs |
10 years |
Customer-related intangibles |
7 - 10 years |
Computer software |
3 - 5 years |
Carclo plc
Annual report and accounts 2026
continued
Notes to the consolidated financial statements
for the year ended 31 March 2026
Strategic report
Corporate governance
Financial statements
Additional information
95
1 Presentation of the financial statements
continued
v) Accounting policies
continued
Items of property, plant and equipment are stated at cost, or at deemed cost, less accumulated
depreciation and impairment losses. Cost includes the original purchase price of the asset and the costs
attributable to bringing the asset to its working condition for its intended use.
the cost or valuation less estimated residual value, using the following estimated useful economic lives:
Freehold buildings |
20 - 50 years |
Plant and equipment |
3 - 12 years |
At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is,
or contains, a lease if the contract conveys the right to control the use of an identified asset for a period
of time in exchange for consideration. To assess whether a contract conveys the right to control the use
of an identified asset, the Group uses the definition of a lease in IFRS 16.
As a lessee
At commencement or on modification of a contract that contains a lease component, the Group
allocates the consideration in the contract to each lease component on the basis of its relative
standalone prices. However, for the leases of property, the Group has elected not to separate non-lease
components and account for the lease and non-lease components as a single lease component.
The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The
right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability
adjusted for any lease payments made at or before the commencement date, plus any initial direct
costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the
underlying asset or the site on which it is located, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the
commencement date to the end of the lease term, unless the lease transfers ownership of the
underlying asset to the Group by the end of the lease term or the cost of the right-of-use asset reflects
that the Group will exercise a purchase option. In that case, the right-of-use asset will be depreciated
over the useful life of the underlying asset, which is determined on the same basis as those of property,
plant and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if
any, and adjusted for certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are not paid at
the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot
be readily determined, the Group’s incremental borrowing rate. The incremental borrowing rate is the
rate the Group would have to pay to borrow the funds necessary to obtain a similar asset under similar
conditions.
The Group determines its incremental borrowing rate by obtaining interest rates from various external
financing sources and makes certain adjustments to reflect the terms of the lease and the type of asset
leased.
Lease payments included in the measurement of the lease liability comprise the following:
•
fixed payments, including in-substance fixed payments;
•
variable lease payments that depend on an index or a rate, initially measured using the index or rate
as at the commencement date;
•
amounts expected to be payable under a residual value guarantee; and
•
the exercise price under a purchase option that the Group is reasonably certain to exercise, lease
payments in an optional renewal period if the Group is reasonably certain to exercise an extension
option, and penalties for early termination of a lease unless the Group is reasonably certain not to
terminate early.
The lease liability is measured at amortised cost using the effective interest method. It is remeasured
when there is a change in future lease payments arising from a change in an index or rate, if there is a
change in the Group’s estimate of the amount expected to be payable under a residual value guarantee,
if the Group changes its assessment of whether it will exercise a purchase, extension or termination
option or if there is a revised in-substance fixed lease payment.
When the lease liability is remeasured in this way, a corresponding adjustment is made to the
carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the
right-of-use asset has been reduced to zero.
The Group presents right-of-use assets in “property, plant and equipment” and lease liabilities in “loans
and borrowings” in the statement of financial position.
Short-term leases and leases of low-value assets
The Group leases office and IT equipment with contract terms typically between one and ten years. The
Group has elected not to recognise right-of-use assets and lease liabilities for leases of low-value assets
and short-term leases with a duration of one year or less. The Group recognises the lease payments
associated with these leases in the income statement as an expense on a straight-line basis over the
Carclo plc
Annual report and accounts 2026
continued
Notes to the consolidated financial statements
for the year ended 31 March 2026
Strategic report
Corporate governance
Financial statements
Additional information
96
1 Presentation of the financial statements
continued
v) Accounting policies
continued
The Group measures all debt instruments (whether financial assets or liabilities) initially at fair value, which
equates to the principal value of the consideration paid or received. Subsequent to initial measurement,
debt instruments are measured at amortised cost using the effective interest method. Transaction costs
(any such costs incremental and directly attributable to the issue of the financial instrument) are included
in the calculation of the effective interest rate and are amortised over the life of the instrument.
Debt instruments denominated in foreign currencies are revalued using period-end exchange rates, see
accounting policy t)v.
Borrowings are classified as current liabilities unless the Group has a substantive right, at the end of
the reporting period, to defer settlement of the liability for at least twelve months. The classification is
Inventories are stated at the lower of cost and net realisable value. Net realisable value is the estimated
selling price in the ordinary course of business, less the estimated costs of completion and selling
expenses. The cost of inventory is based on the first-in, first-out principle and includes expenditure
incurred in acquiring the inventories and bringing them to their existing location and condition. In the
case of manufactured inventories and work in progress, cost includes an appropriate share of overheads
Revenue arises on the Group’s principal activities. Further details are set out in note 5.
To determine whether to recognise revenue, the Group follows the five-step process as prescribed in
IFRS 15:
1.
identifying the contract with a customer;
2. identifying the performance obligations;
3. determining the transaction price;
4. allocating the transaction price to the performance obligations; and
5.
recognising revenue when/or performance obligations are satisfied.
The Group sometimes enters into transactions involving a range of the Group’s products and services,
which in the CTP segment would be for design, engineering and production manufacturing.
The total transaction price for a contract is allocated among the various performance obligations based
on their relative standalone selling prices, or, in the absence of a standalone selling price, on a cost plus
margin basis. The transaction price for a contract excludes any amounts collected on behalf of third
parties.
Revenue is recognised either at a point in time or over time, when or as the Group satisfies performance
obligations by transferring the promised goods or services to its customers.
The Group recognises contract liabilities for consideration received in respect of unsatisfied performance
obligations and reports these amounts as contract liabilities in the statement of financial position.
Similarly, if the Group satisfies a performance obligation before it receives the consideration, the Group
recognises either a contract asset or a receivable in its statement of financial position, depending on
Transactions in foreign currencies are translated at the foreign exchange rate ruling at the date of the
transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date
are translated to functional currency at the foreign exchange rate ruling at that date. Foreign exchange
differences arising on translation are recognised in the income statement. Non-monetary assets and
liabilities that are measured in terms of historical cost in a foreign currency are translated using the
exchange rate at the date of the transaction. Non-monetary assets and liabilities denominated in
foreign currencies that are stated at fair value are translated to sterling at foreign exchange rates ruling
l) Financial statements of foreign operations
The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on
consolidation, are translated to sterling at foreign exchange rates ruling at the balance sheet date. The
revenues and expenses of foreign operations are translated to sterling at rates approximating to the
foreign exchange rates ruling at the dates of the transactions. Foreign exchange differences arising on
retranslation are recognised directly in a separate component of equity.
Exchange differences arising from the translation of the net investment in foreign operations, and of
related hedges meeting the criteria for hedge accounting under IFRS 9, are taken to the translation
Dividends are only recognised as a liability to the extent that they are declared prior to the year end.
Financing revenue and expenses comprise interest payable on borrowings calculated using an
approximation of the effective interest rate method, interest receivable on funds invested, dividend
income and gains and losses on hedging instruments that are recognised in the income statement.
Interest payable is a combination of principal interest and amortised arrangement fees, at each
reporting date, the resulting charge is tested against the effective interest rate method to demonstrate
they are materially in line.
Carclo plc
Annual report and accounts 2026
continued
Notes to the consolidated financial statements
for the year ended 31 March 2026
Strategic report
Corporate governance
Financial statements
Additional information
97
1 Presentation of the financial statements
continued
v) Accounting policies
continued
Cash and cash equivalents comprise cash balances, cash deposits and bank overdrafts. Cash deposits
are those with original maturities of three months or less that are readily convertible to known amounts
of cash and subject to an insignificant risk of changes in value.
Bank overdrafts that are repayable on demand and form an integral part of the Group’s cash
management are included as a component of cash and cash equivalents for the purposes of the
statement of cash flows.
Bank overdrafts are presented separately as borrowings within current liabilities in the statement of
financial position and are not offset against cash balances, irrespective of whether the overdraft facility
Income tax on the profit or loss for the year comprises current and deferred tax. Income tax is
recognised in the income statement except to the extent that it relates to items recognised directly in
equity, in which case it is recognised in equity or the statement of comprehensive income.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or
substantively enacted at the balance sheet date in the countries where the Group operates and any
adjustments to tax payable in respect of previous years.
between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts
used for taxation purposes. The following temporary differences are not provided for: goodwill not
deductible for tax purposes, the initial recognition of assets or liabilities that affect neither accounting
nor taxable profit, and differences relating to investments in subsidiaries to the extent that they will
probably not reverse in the foreseeable future. The amount of deferred tax provided is based on the
expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax
rates enacted or substantively enacted at the balance sheet date.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be
available against which the asset can be utilised.
Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit
Additional income taxes that arise from the distribution of dividends from foreign operations are
recognised at the same time as the liability to pay the related dividend.
Companies within the Group may be entitled to claim special tax deductions in relation to qualifying
research and development expenditure. The Group accounts for such allowances as tax credits, which
The Group operates a defined benefit pension scheme and also makes payments into defined
contribution pension schemes for employees. The pension payable under the defined benefit pension
scheme is calculated based on years of service up to retirement and pensionable salary at the point of
retirement.
The net obligation in respect of the defined benefit plan is the present value of the defined benefit
obligations less the fair value of the plan’s assets at the balance sheet date. The assumptions used to
calculate the present value of the defined benefit obligations are detailed in note 21.
IFRIC 14 requires that where plan assets exceed the defined benefit obligation, an asset is recognised to
the extent that an economic benefit is available to the Group, in accordance with the terms of the plan
and applicable statutory requirements and the benefit should be realisable during the life of the plan or
on the settlement of the plan liabilities.
The operating and financing costs of the scheme are recognised separately in the income statement as
incurred.
Payments to the defined contribution pension scheme are accounted for on an accruals basis. Once the
Trade receivables and debt securities issued are initially recognised when they are originated. All other
financial assets and financial liabilities are initially recognised when the Group becomes a party to the
contractual provisions of the instrument.
liability is initially measured at fair value (plus transaction costs that are directly attributable to its
acquisition or issue for an item not at fair value through profit or loss (“FVTPL”)). A trade receivable
The fair value is the amount at which a financial instrument could be exchanged in an arm’s length
transaction between third parties. Where available, market values are used to determine fair values,
otherwise fair values are calculated by discounting expected cash flows at prevailing interest and
exchange rates.
Carclo plc
Annual report and accounts 2026
continued
Notes to the consolidated financial statements
for the year ended 31 March 2026
Strategic report
Corporate governance
Financial statements
Additional information
98
1 Presentation of the financial statements
continued
v) Accounting policies
continued
t) Financial instruments
continued
ii) Classification and subsequent measurement
other comprehensive income (“FVOCI”) - debt investment; FVOCI - equity investment; or FVTPL.
Financial assets are not reclassified subsequent to their initial recognition unless the Group changes its
business model for managing financial assets, in which case all affected financial assets are reclassified
on the first day of the first reporting period following the change in business model.
A financial asset is measured at amortised cost if it meets both of the following conditions and is not
designated as at FVTPL:
•
it is held within a business model whose objective is to hold assets to collect contractual cash flows;
and
•
its contractual terms give rise on specified dates to cash flows that are solely payments of principal
and interest on the principal amount outstanding.
On initial recognition of an equity investment that is not held for trading, the Group may irrevocably
elect to present subsequent changes in the investment’s fair value in other comprehensive income
(“OCI”). This election is made on an investment-by-investment basis.
measured at FVTPL. This includes all derivative financial assets. On initial recognition, the Group
may irrevocably designate a financial asset that otherwise meets the requirements to be measured at
amortised cost or at FVOCI as at FVTPL, if doing so eliminates or significantly reduces an accounting
mismatch that would otherwise arise.
Financial assets at FVTPL are subsequently measured at fair value. Net gains and losses, including any
Financial assets at amortised cost are subsequently measured at amortised cost using the effective
interest method. The amortised cost is reduced by impairment losses. Interest income, foreign exchange
gains and losses and impairment are recognised in profit or loss. Any gain or loss on derecognition is
Equity investments at FVOCI are subsequently measured at fair value. Dividends are recognised as
income in the profit or loss unless the dividend clearly represents a recovery of part of the cost of the
investment. Other net gains and losses are recognised in OCI and are never reclassified to profit or loss.
as FVTPL if it is classified as held-for-trading, it is a derivative or it is designated as such on initial
recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including
any interest expense, are recognised in profit and loss. Other financial liabilities are subsequently
measured at amortised cost using the effective interest method. Interest expense and foreign exchange
gains and losses are recognised in profit and loss. Any gain or loss on derecognition is also recognised in
The Group derecognises a financial asset when the contractual rights to the cash flows from the
financial asset expire, or it transfers the rights to receive the contractual cash flow in a transaction in
which substantially all of the risks and rewards of ownership of the financial asset are transferred or in
which the Group neither transfers nor retains substantially all of the risks and rewards of ownership and
it does not retain control of the financial asset.
The Group derecognises a financial liability when its contractual obligations are settled, discharged,
cancelled, or expire. The Group also derecognises a financial liability when its terms are modified and the
cash flows of the modified liability are substantially different, in which case a new financial liability based
on modified terms is recognised at fair value. On derecognition of a financial liability, the difference
between the carrying amount extinguished and the consideration paid (including any non-cash assets
Financial assets and financial liabilities are offset and the net amounts presented in the statement of
financial position when, and only when, the Group currently has a legally enforceable right to set off
the amounts and it intends to settle them on a net basis or to realise the asset and settle the liability
When a non-derivative financial liability is designated as the hedging instrument in a hedge of a
net investment in a foreign operation, the effective portion of foreign exchange gains and losses is
recognised in OCI and presented in the translation reserve within equity. Any ineffective portion of the
foreign exchange gains and losses is recognised immediately in profit or loss. The amount recognised in
The Group issues awards structured as equity-settled share-based payments and cash-settled
share-based payments to certain employees in exchange for services rendered by them. The fair value
of the equity-settled share-based award is calculated at date of grant and is expensed on a straight-line
basis over the vesting period with a corresponding increase in equity. The fair value of the cash-settled
award is calculated at date of grant and recognised as an expense over the vesting period based upon
the cash expected to be paid. The fair value of cash-settled share-based payments is recalculated
at each reporting date and the liability revised accordingly. Both valuations are based on the Group’s
estimate of share awards that will eventually vest and take into account movement of non-market
Carclo plc
Annual report and accounts 2026
continued
Notes to the consolidated financial statements
for the year ended 31 March 2026
Strategic report
Corporate governance
Financial statements
Additional information
99
1 Presentation of the financial statements
continued
v) Accounting policies
continued
The carrying amounts of the Group’s assets, other than inventories (see accounting policy i) and
deferred tax assets (see accounting policy r), are reviewed at each balance sheet date to determine
whether there is any indication of impairment. If any such indication exists, the asset’s recoverable
amount is estimated.
For goodwill, assets that have an indefinite useful life and intangible assets that are not yet available for
use, the recoverable amount is estimated at each year-end date.
An impairment loss is recognised whenever the carrying amount of an asset or its cash generating unit
exceeds its recoverable amount. Impairment losses are recognised in the income statement.
Impairment losses recognised in respect of cash generating units are allocated first to reduce the
carrying amount of any goodwill allocated to cash generating units or group of units and then to reduce
the carrying amount of the other assets in the unit or group of units on a pro-rata basis. The carrying
The Group applies the simplified approach to measuring expected credit losses, as permitted by IFRS 9.
Under this approach, loss allowances are measured at an amount equal to lifetime expected credit
losses (“ECLs”) for:
•
financial assets measured at amortised cost; and
•
contract assets (as defined in IFRS 15).
While cash and cash deposits are also subject to the impairment requirements of IFRS 9, the identified
impairment loss was immaterial.
Under the simplified approach, the Group recognises lifetime ECLs from the point of initial recognition
of trade receivables and contract assets. Immediately after an individual trade receivable or contract
asset is assessed to be unlikely to be recovered, an impairment is recognised as the difference between
the carrying amount of the receivable and the present value of estimated future cash flows. Customer-
specific factors are considered when identifying impairments, which can include the geographic location
and credit rating of a customer.
Where there are no specific concerns over recovery, other than the increasing age of a trade receivable
or contract asset balance past payment terms, the Group uses a provision matrix, where provision rates
are based on days past due. The provision matrix used reflects estimates based on past experience,
current economic factors and consideration of forward-looking estimates of economic conditions. Trade
receivables and contract assets are written off where there is no reasonable expectation of recovery.
Indicators that there is no reasonable expectation of recovery include, among others, the failure of a
debtor to engage in a repayment plan with the Group, and a failure to make contractual payments for a
In order for users of the accounts to better understand the underlying (defined on page 167)
performance of the Group, the Board has separately disclosed transactions which, while falling
within the ordinary activities of the Group, are, by virtue of their size or incidence, considered to be
exceptional in nature. Such transactions include, but are not limited to: rationalisation, restructuring
and refinancing of the Group, costs of impairment, one-off retirement benefit effects, profits, losses
and associated costs arising on the disposal of surplus properties and businesses, litigation costs and
Segmental information is presented on the same basis as that used for internal reporting to the chief
Provision is recognised when the Group has a present legal or constructive obligation as a result of a
past event, it is probable that an outflow of economic benefits will be required to settle the obligation,
and the amount can be reliably estimated.
Provisions are measured by discounting the expected future cash flows at a pre-tax rate that reflects
current market assessments and the risks specific to the liability, where the effect of discounting is
Current assets are generally assets due to be received within twelve months of the reporting date.
Current liabilities are generally those which are due to be settled within twelve months of the reporting
date, or where the Group does not have a substantive right to defer settlement for at least twelve
months after the reporting date. All other assets/ liabilities are classified as non-current unless they are
Carclo plc
Annual report and accounts 2026
continued
Notes to the consolidated financial statements
for the year ended 31 March 2026
Strategic report
Corporate governance
Financial statements
Additional information
100
The preparation of the financial statements in conformity with IFRS requires management to make
judgements, estimates and assumptions that affect the application of policies and reported amounts of
assets and liabilities, income and expenses.
The estimates and assumptions are based on historical experience and various other factors that are
believed to be reasonable under the circumstances. These estimates and assumptions form the basis for
making judgements about the carrying values of assets and liabilities that are not readily apparent from
other sources. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the estimate is revised if the revision affects only that
period, or in the period of revision and future periods if the revision affects both current and future
periods.
The following are the critical judgements and key sources of estimation uncertainty that the Directors
have made in the process of applying the Group’s accounting policies and that have the most significant
effect on the amounts recognised in the financial statements. Management has discussed these with
the Audit & Risk Committee. These should be read in conjunction with the significant accounting policies
provided in the notes to the financial statements.
Going concern
Note 1 contains information about the preparation of these financial statements on a going concern
basis.
Key judgements
Management has exercised judgement over the likelihood of the Group being able to continue to
operate within its available borrowing facilities and in accordance with related lender covenants for
at least 12 months from the date of signing these financial statements. Judgement has been applied
over forecast profit, debt levels and interest rates, particularly base rates. This determines whether the
Group should operate the going concern basis of preparation for these financial statements.
Note 13 contains information about management’s estimates of the recoverable amount of cash
generating units and their risk factors.
Key judgements
Management has applied judgement in determining that the net carrying value of goodwill at
31 March 2026 of £22.0 million (31 March 2025: £21.7 million) is allocated to the CTP cash generating
unit. The CTP segment is deemed to be the smallest cash generating unit with an identifiable group
of assets which generate cash inflows largely independent of the cash inflows from other assets or
groups of assets. The basis of this conclusion is that there are a number of senior global CTP roles with
executive powers over the segment rather than there being site-level management teams operating
autonomously; also, customer contracts are often held globally and served from multiple sites.
Management has also exercised judgement over the underlying assumptions within the valuation models
and consideration as to if there have been indications of impairment. These are key factors in their
assessment of whether there is any impairment in related goodwill or other assets. Where indications
exist, management has estimated recoverable amounts as detailed below.
Key sources of estimation uncertainty
The Group tests whether goodwill has suffered any impairment and considers whether there is any
indication of impairment in either this or other assets on at least an annual basis. As set out in more
detail in notes 13 and 14, the recoverable amounts may be based on either value in use calculations or fair
value less costs of disposal considerations. The former requires the estimation of future cash flows and
the choice of a discount rate in order to calculate the present value of the future cash flows, the latter
method requires the estimation of fair value.
Defined benefit pension assumptions
Note 21 contains information about management’s estimate of the net liability for defined benefit
obligations and their risk factors. The UK defined benefit pension liability at 31 March 2026 amounts to
£46.8 million (2025: £51.7 million).
Key sources of estimation uncertainty
The value of the defined benefit pension plan obligation is determined by long-term actuarial
assumptions. These assumptions include discount rates, inflation rates and mortality rates. Differences
arising from actual experience or future changes in assumptions will be reflected in the Group’s
consolidated statement of comprehensive income. The Group exercises judgement in determining
the assumptions to be adopted after discussion with a qualified actuary. Details of the key actuarial
assumptions used and of the sensitivity of these assumptions are included within note 21.
In the year to 31 March 2022 and the year to 31 March 2021, the scheme introduced a right for members
to Pension Increase Exchange (“PIE”) and a Bridging Pension Option respectively. Having taken
actuarial advice, management exercised judgement that, for each, 40% of members would take the
options at retirement. There is no change to either assumption in the current year. Any change in
estimate would be recognised as remeasurement gains/(losses) through the consolidated statement of
comprehensive income.
Leases
There are imputed interest rates in lease liability calculations and certain leases contain break options.
Key judgements
Lease liabilities are measured initially at the present value of the lease payments discounted using
the rate implicit in the lease, or where not readily determinable as is generally the case, using the
incremental borrowing rate. This requires management to apply judgement.
Management has applied judgement when determining the expected certainty that a break option
within a lease will be exercised. Note 4 details the amount by which lease liabilities would decrease if the
Group were to exercise break options that at 31 March 2026 management are reasonably certain will not
be exercised as well as the amount by which lease liabilities have been adjusted where management are,
at 31 March 2026, reasonably certain that break options will be exercised.
Carclo plc
Annual report and accounts 2026
continued
Notes to the consolidated financial statements
for the year ended 31 March 2026
Strategic report
Corporate governance
Financial statements
Additional information
101
2 Accounting estimates and judgements
continued
As revenue from Design & Engineering contracts is recognised over time, the amount of revenue
recognised in a reporting period depends on the extent to which the performance obligations have been
satisfied. See note 5, Revenue from contracts with customers, for information on contract balances at
31 March 2026.
Key judgements
Revenue recognised on contracts in the CTP segment requires management judgement in determining
the allocation of contract revenue to Design & Engineering obligations, for which a cost-plus basis is
usually applied, assessing whether design, tool manufacture/build and validation activities constitute
a single performance obligation under IFRS 15, and determining that a cost input method based on
costs incurred relative to total expected costs provides the most appropriate measure of progress for
recognising revenue over time.
Key sources of estimation uncertainty
Revenue recognised on Design & Engineering contracts in the CTP segment requires management
to estimate the remaining costs to complete the performance obligations in order to determine the
percentage of completion and revenue in respect of those performance obligations. Costs to complete
are reviewed throughout the life of each contract and determined through consultation with the
contract engineers. Changes to this estimate will therefore impact the amount of revenue and profit
recognised.
If costs to complete were 5% higher or lower than estimated at 31 March 2026, the impact to the Group
Recognition of deferred tax assets
Note 20 contains information about the deferred tax assets recognised in the consolidated statement
of financial position.
Key judgements
Management has exercised judgement over the level of future taxable profits in the UK and the US
against which to relieve deferred tax assets. The Group has concluded that deferred tax assets of
£0.9 million, net of off-setting deferred tax liabilities, which mostly relate to the Group’s US subsidiaries,
will be recovered in the future. See below for the key sources of estimation uncertainty considered
when reaching this conclusion. In the UK, with the exception of a £0.3 million deferred tax asset which
is available to offset against a deferred tax liability for the same amount arising on historic property
valuations (2025: £0.3 million), management has applied judgement to determine that no UK deferred
tax assets will be recognised at either year end.
Key sources of estimation uncertainty
As the majority of the Group’s deferred tax assets are in its US subsidiaries, management has prepared
an estimate of the future taxable income of its subsidiary trading company, CTP Carrera Inc. This
estimate is based upon the Board-approved budget and three-year business plan. All other things equal,
forecast EBIT could decrease by approximately 61% over the three years, before the deferred tax asset
is at risk of not being recovered within that three-year period. A similar working has been prepared for
the UK trading subsidiaries, including the plc company; however, as there is minimal headroom to cover
any reduction in EBIT of the trading entities, management does not believe that a UK deferred tax asset
can be supported currently. A 20% reduction in the underlying earnings before interest and tax of the
UK trading companies would eliminate any estimated taxable profits against which to recover a deferred
tax asset.
Classification of non-underlying items
Note 8 contains information about items classified as exceptional.
Key judgements
Management has exercised judgement over whether items are non-underlying as set out in the Group’s
The Group is organised into two, separately managed, business segments – CTP and Speciality. These
are the segments for which summarised management information is presented to the Group’s chief
operating decision maker (comprising the main Board and Executive Committee).
The CTP segment supplies value-adding engineered solutions from mould design, automation
and production to assembly and printing, for the life science and precision component industries.
This business operates internationally in a fast-growing and dynamic market underpinned by rapid
technological development.
The Speciality segment delivers precise and durable components for the safety and performance of
aircraft manufacturing, aerospace and optical industries.
Central costs relate to the cost of running the Group, plc and non-trading companies.
Transfer pricing between business segments is set on an arm’s length basis. Segmental revenues and
results presented are after the elimination of transfers between business segments. Those transfers are
eliminated on consolidation.
Carclo plc
Annual report and accounts 2026
continued
Notes to the consolidated financial statements
for the year ended 31 March 2026
Strategic report
Corporate governance
Financial statements
Additional information
102
3 Segment reporting
continued
Analysis by business segment
The segment results for the year ended 31 March 2026 were as follows:
CTP |
Speciality |
Central |
Group total |
|
£000 |
£000 |
£000 |
£000 |
|
Consolidated income statement |
||||
Total revenue |
101,719 |
16,455 |
— |
118,174 |
Less inter-segment revenue |
(3,502) |
(461) |
— |
(3,963) |
External revenue |
98,217 |
15,994 |
— |
114,211 |
External expenses |
(83,116) |
(12,570) |
(5,925) |
(101,611) |
Underlying operating profit/(loss) |
15,101 |
3,424 |
(5,925) |
12,600 |
Non-underlying operating items |
(12) |
160 |
(484) |
(336) |
Operating profit/(loss) |
15,089 |
3,584 |
(6,409) |
12,264 |
Net finance expense |
(7,432) |
|||
Income tax expense |
(2,137) |
|||
Profit for the year |
2,695 |
|||
Consolidated statement of financial position |
||||
Segment assets |
79,694 |
11,281 |
1,387 |
92,362 |
Segment liabilities |
(23,426) |
(4,683) |
(72,922) |
(101,031) |
Net assets/(liabilities) |
56,268 |
6,598 |
(71,535) |
(8,669) |
Other segmental information |
||||
Capital expenditure on property, plant and equipment |
1,657 |
1,558 |
93 |
3,308 |
Capital expenditure on computer software |
— |
— |
333 |
333 |
Depreciation |
5,402 |
432 |
62 |
5,896 |
Amortisation of intangible assets |
2 |
28 |
77 |
107 |
Carclo plc
Annual report and accounts 2026
continued
Notes to the consolidated financial statements
for the year ended 31 March 2026
Strategic report
Corporate governance
Financial statements
Additional information
103
3 Segment reporting
continued
Prior year comparatives
The segment results for the year ended 31 March 2025 were as follows:
CTP | Speciality | Central | Group total | |
£000 | £000 | £000 | £000 | |
Consolidated income statement | ||||
External revenue | 106,998 | 14,221 | — | 121,219 |
External expenses | (94,670) | (11,420) | (5,291) | (111,381) |
Underlying operating profit/(loss) | 12,328 | 2,801 | (5,291) | 9,838 |
Non-underlying operating items | 45 | — | (2,303) | (2,258) |
Operating profit/(loss) | 12,373 | 2,801 | (7,594) | 7,580 |
Net finance expense | (4,928) | |||
Income tax expense | (1,780) | |||
Profit for the year | 872 | |||
Consolidated statement of financial position | ||||
Segment assets | 83,295 | 9,691 | 4,049 | 97,035 |
Segment liabilities | (27,393) | (3,311) | (78,171) | (108,875) |
Net assets/(liabilities) | 55,902 | 6,380 | (74,122) | (11,840) |
Other segmental information | ||||
Capital expenditure on property, plant and equipment | 1,899 | 547 | 2 | 2,448 |
Capital expenditure on computer software | — | — | 49 | 49 |
Depreciation | 5,961 | 411 | 84 | 6,456 |
Reversal of impairment of property, plant and equipment | (209) | — | — | (209) |
Amortisation of intangible assets | 8 | 12 | 67 | 87 |
Carclo plc
Annual report and accounts 2026
continued
Notes to the consolidated financial statements
for the year ended 31 March 2026
Strategic report
Corporate governance
Financial statements
Additional information
104
3 Segment reporting
continued
Analysis by geographical segment
The business operates across the following geographical regions: the United Kingdom, North America and in lower-cost regions including Czechia, China and India. The geographical analysis was as follows:
Expenditure on tangible |
||||||
External revenue |
Net segment (liabilities)/assets |
and intangible fixed assets |
||||
2026 |
2025 |
2026 |
2025 |
2026 |
2025 |
|
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
|
United Kingdom |
8,125 |
10,012 |
(51,008) |
(51,342) |
2,044 |
763 |
Rest of Europe |
32,962 |
30,486 |
12,878 |
11,607 |
766 |
87 |
North America |
38,093 |
44,230 |
22,062 |
20,840 |
583 |
266 |
Rest of world |
35,031 |
36,491 |
7,399 |
7,055 |
248 |
1,381 |
114,211 |
121,219 |
(8,669) |
(11,840) |
3,641 |
2,497 |
|
The analysis of segment revenue represents revenue from external customers based upon the location of the customer.
The analysis of segment assets and capital expenditure is based upon the location of the assets.
The material components of the Central assets and liabilities are retirement benefit obligation net liability of £46.8 million (31 March 2025: £51.7 million), and net borrowings of £22.9 million (31 March 2025:
£20.6 million). One customer accounted for 32.4% (31 March 2025: 36.1%), another for 13.7% (31 March 2025: 16.3%) and a third for 13.4% (31 March 2025: 14.4%) of Group revenues and similar proportions of trade
receivables.
No other customer accounted for more than 10.0% of Group revenues from continuing operations in the year.
Deferred tax assets by geographical location are as follows: United Kingdom £nil (31 March 2025: £nil), Rest of Europe £nil (31 March 2025: £nil), North America £0.9 million (31 March 2025: £0.5 million), Rest of
world £0.1 million (31 March 2025: £0.1 million).
Total non-current assets by geographical location are as follows: United Kingdom £17.5 million (31 March 2025: £19.5 million), Rest of Europe £11.6 million (31 March 2025: £10.7 million), North America £21.7 million
Carclo plc
Annual report and accounts 2026
continued
Notes to the consolidated financial statements
for the year ended 31 March 2026
Strategic report
Corporate governance
Financial statements
Additional information
105
The Group’s leases are principally for warehouse and manufacturing facilities and assets, with a small number of vehicles and other equipment.
Information about leases for which the Group is a lessee is presented below.
Amounts recognised in the statement of financial position
Right-of-use assets related to leased properties and plant and equipment are presented as property, plant and equipment (see note 14).
Land and |
Plant and |
||
buildings |
equipment |
Total |
|
£000 |
£000 |
£000 |
|
Balance at 1 April 2024 |
5,248 |
6,202 |
11,450 |
Depreciation charge for the year |
(1,914) |
(583) |
(2,497) |
Additions to right-of-use assets |
1,303 |
121 |
1,424 |
Assets transferred between right-of-use assets and owned property, plant and equipment |
202 |
(283) |
(81) |
Derecognition of right-of-use assets |
(66) |
— |
(66) |
Effect of movements in foreign exchange |
(39) |
(106) |
(145) |
Balance at 31 March and 1 April 2025 |
4,734 |
5,351 |
10,085 |
Depreciation charge for the year |
(1,832) |
(385) |
(2,217) |
Additions to right-of-use assets |
758 |
28 |
786 |
Remeasurement of lease liabilities |
(697) |
21 |
(676) |
Assets transferred from right-of-use assets to owned property, plant and equipment |
— |
(1,057) |
(1,057) |
Effect of movements in foreign exchange |
65 |
(89) |
(24) |
Balance at 31 March 2026 |
3,028 |
3,869 |
6,897 |
During the year, the Group exercised purchase options over certain items of leased equipment in the US. As a result, right-of-use assets with a carrying value of £1.0 million were transferred from right-of-use
assets to owned property, plant and equipment.
On 3 July 2025, the Group signed reversionary leases for the Mitcham CTP UK properties. On signing the reversionary leases, a deed of variation to the existing property leases was agreed, under which the rent
payable for the following 18 months was reduced by 50%. The Group remeasured the related lease liabilities to reflect the revised lease payments, resulting in a £0.5 million reduction in both the lease liabilities and
the carrying value of the associated right-of-use assets.
Carclo plc
Annual report and accounts 2026
continued
Notes to the consolidated financial statements
for the year ended 31 March 2026
Strategic report
Corporate governance
Financial statements
Additional information
106
4 Leases
continued
Amounts recognised in the statement of financial position
continued
ii) Lease liabilities
Lease liabilities have been presented as loans and borrowings, see note 19.
Amounts recognised in the income statement
2026 | 2025 | |
£000 | £000 | |
Interest on lease liabilities | 458 | 679 |
Expenses relating to short-term leases | — | 3 |
Depreciation and impairment expense on right-of-use assets | 2,217 | 2,497 |
Amounts recognised in the consolidated statement of cash flows
2026 | 2025 | |
£000 | £000 | |
Total cash outflow for leases | 2,973 | 4,228 |
Break options
Some property leases contain break options exercisable by the Group, typically at the five-year
anniversary of the lease inception. Where practicable, the Group seeks to include break options in new
leases to provide operational flexibility. The Group assesses at lease commencement date whether it is
reasonably certain to exercise the break options. The Group reassesses whether it is reasonably certain to
exercise the options if there is a significant event or significant changes in circumstances within its control.
The Group has estimated that the potential future lease payments, should it exercise break options at
a) Nature of goods and services
which the Group generates its revenues. For more detailed information about reportable segments,
see note 3.
i) CTP segment:
The CTP segment supplies value-adding engineered solutions from mould design, automation
and production to assembly and printing for the life science and precision component industries.
This business operates internationally in a fast-growing and dynamic market underpinned by rapid
technological development. CTP revenues comprise two typical project types: Manufacturing Solutions
and Design & Engineering.
Manufacturing Solutions
The majority of the CTP business is in manufacturing injection moulded product.
Control of manufactured finished goods transfers to customers on delivery. Therefore revenue is
recognised at a point in time, on delivery of individual manufactured products to customers.
Design & Engineering
The CTP business designs, builds and validates injection moulding tools for customers. For tooling
contracts, the design, tool manufacture/build and validation activities are highly interdependent
and highly interrelated and are integrated to deliver a single combined output, being a validated
and functional injection moulding tool. Accordingly, these activities are accounted for as a single
performance obligation under IFRS 15.
Revenue from tooling contracts is recognised over time where the tooling has no alternative use to
the Group and the Group has an enforceable right to payment for performance completed to date.
Progress towards complete satisfaction of the tooling performance obligation is measured using an
input method based on costs incurred relative to total expected costs (the percentage of completion
method). Costs included in the measure of progress comprise external tool maker costs and internal
direct engineering labour associated with the design, project management and validation of the tooling.
Holding costs and other costs that do not depict the transfer of control to the customer are excluded
from the measure of progress.
The Group considers the cost input method to provide a faithful depiction of performance, as the
incurrence of costs is representative of the enhancement of the tooling and the transfer of control
to the customer over time.
Some CTP contracts include both tooling and Manufacturing Solutions performance obligations.
In these cases, the transaction price is allocated to each performance obligation based on the
contractual arrangement and there is generally no significant variable consideration.
ii) Speciality segment:
The Speciality segment delivers precise and durable components for the safety and performance of
aircraft manufacturing, aerospace and optical industries.
Control of manufactured finished goods transfers to customers on delivery. Therefore revenue is
Carclo plc
Annual report and accounts 2026
continued
Notes to the consolidated financial statements
for the year ended 31 March 2026
Strategic report
Corporate governance
Financial statements
Additional information
107
5 Revenue from contracts with customers
continued
b) Disaggregation of revenue
CTP | CTP | Speciality | Speciality | Group total | Group total | |
2026 | 2025 | 2026 | 2025 | 2026 | 2025 | |
Continuing operations: | £000 | £000 | £000 | £000 | £000 | £000 |
Major products/service lines | ||||||
Manufacturing Solutions | 88,487 | 93,443 | 15,994 | 14,221 | 104,481 | 107,664 |
Design & Engineering | 9,730 | 13,555 | — | — | 9,730 | 13,555 |
98,217 | 106,998 | 15,994 | 14,221 | 114,211 | 121,219 | |
Timing of revenue recognition | ||||||
Products transferred at a point in time | 88,487 | 93,552 | 15,994 | 14,221 | 104,481 | 107,773 |
Products and services transferred over time | 9,730 | 13,446 | — | — | 9,730 | 13,446 |
98,217 | 106,998 | 15,994 | 14,221 | 114,211 | 121,219 |
Refer to note 3 for information on reliance on major customers.
c) Contract balances
The following table provides information about receivables, contract assets and contract liabilities from contracts with customers.
2026 | 2025 | |
£000 | £000 | |
Trade receivables | 14,488 | 10,575 |
Contract assets | 1,816 | 1,721 |
Contract liabilities | (1,737) | (1,624) |
14,567 | 10,672 |
Contract assets primarily relate to the Group’s rights to consideration for work completed but not billed at the reporting date on its Design & Engineering contracts in the CTP segment.
Contract liabilities relate to the advance consideration received from customers before the related revenue has been recognised; this applies to Design & Engineering contracts in the CTP segment.
The following table provides information about revenue recognised in the current year that was included in the contract liability balance at the beginning of the year:
2026 | 2025 | |
£000 | £000 | |
Revenue recognised | 1,352 | 2,831 |
Carclo plc
Annual report and accounts 2026
continued
Notes to the consolidated financial statements
for the year ended 31 March 2026
Strategic report
Corporate governance
Financial statements
Additional information
108
5 Revenue from contracts with customers
continued
d) Transaction price allocated to remaining performance obligations
The following table includes revenue expected to be recognised in the future related to performance obligations that are partially unsatisfied at the reporting date.
The Group is making use of the practical expedient not to include revenue on contracts with an original expected duration of one year or less.
Revenue expected to be recognised
2027 |
2028 |
|
£000 |
£000 |
|
Design & Engineering |
1,638 |
1,094 |
e) Significant payment terms
Design & Engineering contracts are invariably billed in several clearly identifiable stages, with standard payment terms being either 30 or 60 days. Typically, these are linked to key milestones being design, build
and validate.
Billing of manufacturing product is typically on completion of particular production batches. Credit terms are usually negotiated between 30 and 60 days. Only pre-specified conditions would confer any right to
Carclo plc
Annual report and accounts 2026
continued
Notes to the consolidated financial statements
for the year ended 31 March 2026
Strategic report
Corporate governance
Financial statements
Additional information
109
Operating profit from continuing operations is arrived at as follows:
2026 |
2025 |
|
£000 |
£000 |
|
Revenue |
114,211 |
121,219 |
(Increase)/decrease in stocks of finished goods and work |
||
in progress |
(204) |
305 |
Raw materials and consumables |
42,667 |
47,371 |
Personnel expenses (see note 7) |
34,833 |
36,142 |
Impairment (credit)/loss on trade and other receivables, |
||
including contract assets (see note 17) |
(75) |
105 |
Amortisation of intangible assets |
107 |
87 |
Depreciation of property, plant and equipment |
5,896 |
6,456 |
Rent |
207 |
82 |
Rates |
855 |
703 |
Power |
3,126 |
4,386 |
Carriage |
1,644 |
1,585 |
Repairs and maintenance |
3,142 |
2,437 |
Insurance |
1,535 |
868 |
Computer costs |
2,803 |
2,853 |
Gain on disposal of assets |
(14) |
— |
2026 |
2025 |
|
£000 |
£000 |
|
Auditor’s remuneration: |
||
Fees payable to the Company’s auditor for the audit of the |
||
Company’s annual accounts |
350 |
275 |
Fees payable to the Company’s auditor and its associates for |
||
other services: |
||
The audit of the Company’s subsidiaries, pursuant |
||
to legislation |
258 |
499 |
Audit-related assurance services |
35 |
46 |
Total fees payable to Company’s auditor |
643 |
820 |
Fees payable to the Company’s previous auditor for overruns in |
||
respect to the prior year |
200 |
46 |
Total auditor’s remuneration |
843 |
866 |
Non-underlying items: (see note 8) |
||
Refinancing costs |
270 |
2,137 |
Rationalisation costs |
225 |
122 |
Insurance claim |
(159) |
— |
Settlement of legacy claims |
— |
(1) |
Total non-underlying items |
336 |
2,258 |
Foreign exchange losses |
73 |
133 |
Pension scheme administration costs |
700 |
702 |
Other operating charges 1 |
3,473 |
6,300 |
101,947 |
113,639 |
|
Operating profit |
12,264 |
7,580 |
1.
Other operating charges includes other general costs relating to running the business, e.g. travel, welfare,
Carclo plc
Annual report and accounts 2026
continued
Notes to the consolidated financial statements
for the year ended 31 March 2026
Strategic report
Corporate governance
Financial statements
Additional information
110
2026 |
2025 |
|
£000 |
£000 |
|
Wages and salaries |
29,810 |
30,725 |
Social security contributions |
3,227 |
3,725 |
Charge in respect of defined contribution pension plans |
1,683 |
1,248 |
Charge in respect of other pension plans |
— |
412 |
Share-based payments (see note 24) |
113 |
32 |
34,833 |
36,142 |
Redundancy costs arising from Group restructuring of £0.05 million (2025: £0.4 million) and £nil of
other personnel costs (2025: £0.3 million) are excluded from the above analysis and are included within
rationalisation costs, part of non-underlying items as set out in note 8.
Directors’ remuneration and emoluments, which are included in this analysis, are described in the
Directors’ remuneration report on pages 61 to 75.
The Group recognised a net charge of £0.1 million in the consolidated income statement in the year to
31 March 2026 (2025: £0.03 million charge) for share-based payments. As well as adjusting for awards
forfeited by leavers, the cumulative charge recognised over the vesting period requires adjustment
to reflect the recalculated fair value of cash-settled share-based payments, and assessment of likely
vesting for awards subject to non-market-based vesting conditions at each reporting date.
The average monthly number of persons employed by the Group during the year was as follows:
2026 |
2025 |
|
Number of |
Number of |
|
employees |
employees |
|
By segment |
||
Central |
23 |
21 |
CTP |
787 |
846 |
Speciality |
97 |
91 |
907 |
958 |
|
By geographic location |
||
United Kingdom |
318 |
325 |
North America |
244 |
278 |
Rest of Europe |
100 |
111 |
Rest of world |
245 |
244 |
907 |
958 |
Carclo plc
Annual report and accounts 2026
continued
Notes to the consolidated financial statements
for the year ended 31 March 2026
Strategic report
Corporate governance
Financial statements
Additional information
111
2026 |
2025 |
|
£000 |
£000 |
|
Refinancing costs |
(270) |
(2,137) |
Rationalisation costs |
(225) |
(122) |
Net proceeds of insurance claim |
159 |
— |
Settlement of legacy claims |
— |
1 |
(336) |
(2,258) |
|
(336) |
(2,258) |
The cash element of non-underlying items is a net outflow of £0.01 million (2025: £3.3 million).
£0.3 million refinancing costs, incurred in 2026, are costs arising as a result of the Group having
refinanced with BZ Commercial Finance DAC (“BZ”), which are not deemed by the Group as directly
attributable to the refinancing arrangement and have not therefore been capitalised against the BZ loan
balance. These are mostly costs incurred as a result of the accelerated charge of the remaining HSBC
costs which were expensed when the loans were repaid. Refinancing costs in the prior periods were legal
and professional costs incurred by the Group up until 14 February 2025, on which date the Carclo plc
Board of Directors agreed BZ as the preferred lender with whom the Group subsequently completed its
refinancing on 24 April 2025.
Current period rationalisation costs are non-underlying pension administration costs. Rationalisation
costs of £0.1 million in the prior period relate to the restructuring of the Group.
This is largely costs
and credits arising from the US facility closures as part of the turnaround plan and includes the
following: £0.7 million employee-related costs for severance and retention bonuses, £0.4 million other
closure-related costs including costs to relocate plant and equipment, less £1.0 million of balance sheet
credits, being £0.7 million provisions and property lease liabilities released following surrender of the
leased properties at the Tucson, Arizona facility and £0.3 million for the reversal of asset provisions
booked at 31 March 2024 no longer required.
An insurance claim was processed for damage following a break-in at the Bruntons location; an amount
of £0.2 million proceeds net of restitution costs has been received in the period ended 31 March 2026.
The credit in the prior period on settlement of legacy claims is the release of provisions booked for
2026 |
2025 |
|
£000 |
£000 |
|
Finance income comprises: |
||
Interest receivable on cash and cash deposits |
46 |
535 |
Other interest |
— |
36 |
Finance income |
46 |
571 |
Finance expense comprises: |
||
Interest payable on bank loans and overdrafts |
(3,766) |
(3,075) |
Lease interest |
(458) |
(679) |
Interest on the net defined benefit pension liability |
(2,711) |
(1,745) |
Other interest |
(543) |
— |
Finance expense |
(7,478) |
(5,499) |
Net finance expense |
(7,432) |
(4,928) |
Carclo plc
Annual report and accounts 2026
continued
Notes to the consolidated financial statements
for the year ended 31 March 2026
Strategic report
Corporate governance
Financial statements
Additional information
112
The income tax (expense)/credit recognised in the consolidated income statement comprises:
2026 |
2025 |
|
£000 |
£000 |
|
United Kingdom corporation tax: |
||
Corporation tax on losses for the current year |
26 |
— |
Current tax |
— |
— |
Adjustments for prior years |
(26) |
(13) |
Overseas taxation: |
||
Current tax |
(1,245) |
(1,379) |
Adjustments for prior years |
91 |
(1) |
Total current tax net expense |
(1,154) |
(1,393) |
Deferred tax |
||
Deferred tax |
(918) |
(409) |
Adjustments for prior years |
(69) |
13 |
Rate change |
4 |
9 |
Total deferred tax expense – see note 20 |
(983) |
(387) |
Total income tax expense recognised |
||
in the consolidated income statement |
(2,137) |
(1,780) |
Reconciliation of tax (expense)/credit for the year
The Group has reported an effective tax rate
1
for the period of 44.2% (2025: 67.1%) which is above the
standard rate of UK corporation tax of 25% (2025: 25%).
The differences are explained as follows:
2026 |
2025 |
|||
£000 |
% |
£000 |
% |
|
Profit before tax |
4,832 |
2,652 |
||
Income tax using standard rate |
||||
of UK corporation tax of 25% |
||||
(2025: 25%) |
(1,208) |
(25.0) |
(663) |
(25.0) |
Expenses not deductible for |
||||
tax purposes |
(306) |
(6.3) |
(221) |
(8.3) |
Income not taxable |
102 |
2.1 |
66 |
2.5 |
Adjustments in respect of |
||||
overseas tax rates |
290 |
6.0 |
127 |
4.8 |
Unprovided deferred tax |
||||
movement |
(787) |
(16.3) |
(654) |
(24.7) |
Adjustment to current tax in |
||||
respect of prior periods |
||||
(UK and overseas) |
117 |
2.4 |
(14) |
(0.5) |
Adjustments to deferred tax in |
||||
respect of prior periods |
||||
(UK and overseas) |
(69) |
(1.4) |
13 |
0.5 |
Foreign taxes expensed |
||||
in the UK |
(295) |
(6.1) |
(434) |
(16.4) |
Rate change on deferred tax |
4 |
0.1 |
9 |
0.3 |
Foreign exchange currency loss |
15 |
0.3 |
(9) |
(0.3) |
Total income tax |
||||
expense |
(2,137) |
(44.2) |
(1,780) |
(67.1) |
1.
See the glossary on page 167.
Carclo plc
Annual report and accounts 2026
continued
Notes to the consolidated financial statements
for the year ended 31 March 2026
Strategic report
Corporate governance
Financial statements
Additional information
113
10 Income tax (expense)/credit
continued
Tax on items credited outside of the consolidated income statement
2026 |
2025 |
|
£000 |
£000 |
|
Recognised in other comprehensive income: |
||
Foreign exchange movements |
(1) |
13 |
Total income tax credited to other comprehensive |
||
income — see note 20 |
(1) |
13 |
The calculation of basic earnings per share is based on the profit attributable to equity holders of the
parent company divided by the weighted average number of ordinary shares outstanding during the
year.
The calculation of diluted earnings per share is based on the profit attributable to equity holders of the
parent company divided by the weighted average number of ordinary shares outstanding during the
year (adjusted for dilutive options).
The result and average number of shares used in calculating the basic and diluted earnings per share are
shown below.
2026 |
2025 |
|
£000 |
£000 |
|
Profit after tax |
2,695 |
872 |
Profit attributable to non-controlling interests |
— |
— |
Profit attributable to equity holders of the parent |
2,695 |
872 |
2026 |
2025 |
|
Shares |
Shares |
|
Weighted average number of ordinary shares in the year |
73,419,193 |
73,419,193 |
Effect of dilutive share options in issue 1 |
923,712 |
546,306 |
Weighted average number of ordinary shares (diluted) in the year |
||
for underlying earnings per share calculation 2 |
74,342,905 |
73,965,499 |
1.
There are 15,974 vested shares outstanding that are not yet issued. 806,729 share options granted on
21 September 2023, 57,990 share options granted on 9 September 2025 under the Deferred Bonus Plan 2025
and 43,063 share options granted on 9 September 2025 are included in the calculation of the weighted average
number of dilutive shares for earnings per share in the current year.
2. See the glossary on page 167.
In addition to the above, the Company also calculates an earnings per share based on underlying profit
as the Board believes this provides a more useful comparison of business trends and performance.
The following table reconciles the Group’s profit to underlying profit used in calculating underlying
earnings per share:
2026 |
2025 |
|
£000 |
£000 |
|
Profit attributable to equity holders of the parent |
2,695 |
872 |
Non-underlying – refinancing costs, net of tax |
270 |
2,096 |
Non-underlying – rationalisation and restructuring costs, net of tax |
216 |
173 |
Non-underlying – settlement in respect to legacy claims, net of tax |
— |
(1) |
Non-underlying – insurance proceeds from Bruntons, net of tax |
(159) |
— |
Underlying profit after tax, attributable to equity holders |
||
of the parent |
3,022 |
3,140 |
The following table reconciles the Group’s underlying profit after tax attributable to equity holders of
the parent:
2026 |
2025 |
|
£000 |
£000 |
|
Underlying operating profit |
12,600 |
9,838 |
Finance income |
46 |
571 |
Finance expense |
(7,478) |
(5,499) |
Income tax expense |
(2,146) |
(1,770) |
Underlying profit after tax attributable to equity holders |
||
of the parent |
3,022 |
3,140 |
Carclo plc
Annual report and accounts 2026
continued
Notes to the consolidated financial statements
for the year ended 31 March 2026
Strategic report
Corporate governance
Financial statements
Additional information
114
11 Earnings per share
continued
The following table summarises the earnings per share figures based on the above data:
2026 |
2025 |
|
Pence |
Pence |
|
Basic earnings per share |
3.7 |
1.2 |
Diluted earnings per share |
3.6 |
1.2 |
Basic underlying earnings per share |
4.1 |
4.3 |
Diluted underlying earnings per share |
4.1 |
4.2 |
The current focus is on cash flow generation to support strategic growth and with the Company
currently having insufficient distributable reserves, no dividend is proposed in respect of the year ended
31 March 2026 (2025: nil). The Board will continue to review the Group financial performance, capital
allocation and reserves regularly to determine the appropriate time for dividend payments.
Under the terms of the previous HSBC borrowing facility agreement, in place up to the BZ refinancing
completed in April 2025, the Company was not permitted to make a dividend payment to shareholders
up to the period ending 31 December 2025. Under the BZ borrowing facility agreement, dividend
Carclo plc
Annual report and accounts 2026
continued
Notes to the consolidated financial statements
for the year ended 31 March 2026
Strategic report
Corporate governance
Financial statements
Additional information
115
Patents and | Customer- | ||||
development | related | Computer | |||
Goodwill | costs | intangibles | software | Total | |
£000 | £000 | £000 | £000 | £000 | |
Cost | |||||
Balance at 31 March and 1 April 2024 | 23,131 | 16,802 | 588 | 1,681 | 42,202 |
Additions | — | — | — | 49 | 49 |
Disposals | — | — | — | (307) | (307) |
Effect of movements in foreign exchange | (339) | — | — | (7) | (346) |
Balance at 31 March and 1 April 2025 | 22,792 | 16,802 | 588 | 1,416 | 41,598 |
Additions | — | — | — | 333 | 333 |
Reclassification of assets under construction from PPE | — | — | — | 208 | 208 |
Disposals | — | — | — | — | — |
Effect of movements in foreign exchange | 285 | — | — | (1) | 284 |
Balance at 31 March 2026 | 23,077 | 16,802 | 588 | 1,956 | 42,423 |
Amortisation | |||||
Balance at 31 March and 1 April 2024 | 1,104 | 16,802 | 588 | 1,511 | 20,005 |
Amortisation for the year | — | — | — | 87 | 87 |
Disposals | — | — | — | (307) | (307) |
Effect of movements in foreign exchange | 18 | — | — | (6) | 12 |
Balance at 31 March and 1 April 2025 | 1,122 | 16,802 | 588 | 1,285 | 19,797 |
Amortisation for the year | — | — | — | 107 | 107 |
Disposals | — | — | — | — | — |
Effect of movements in foreign exchange | (10) | — | — | (2) | (12) |
Balance at 31 March 2026 | 1,112 | 16,802 | 588 | 1,390 | 19,892 |
Carrying amounts | |||||
At 1 April 2024 | 22,027 | — | — | 170 | 22,197 |
At 31 March 2025 | 21,670 | — | — | 131 | 21,801 |
At 31 March 2026 | 21,965 | — | — | 566 | 22,531 |
During the year, the Group has incurred research and development costs of £0.3 million (2025: £0.2 million) which did not meet the criteria to be capitalised and have been included within operating expenses in
the consolidated income statement.
13 Intangible assets
continued
Impairment tests for cash generating units containing goodwill
Goodwill acquired in a business combination is allocated at acquisition to the cash generating units
(“CGUs”) that are expected to benefit from that business combination. The carrying amount of goodwill
is allocated to the Group’s principal CGUs, being the operating segments described in the operating
segment descriptions in note 3.
The carrying value of goodwill at 31 March 2026 and 31 March 2025 is allocated wholly to the CTP cash
generating unit as follows:
2026 | 2025 | |
£000 | £000 | |
CTP | 21,965 | 21,670 |
At 31 March 2026, the recoverable amount of the CTP CGU was determined using a value in use
calculation, which exceeded the carrying amount of the CGU by £53.5 million (31 March 2025:
£33.3 million). Accordingly, no impairment of goodwill was identified.
The value in use calculation is based on cash flow projections derived from the Group’s Board-approved
strategic plan covering a three-year period. Cash flows for years four and five have been assumed
to remain at year three levels, reflecting a prudent transition to a steady-state operating position.
A terminal value has then been calculated using long-term growth rates ranging from 1.5% to 4.0%
(31 March 2025: 0.6% to 4.5%), depending on the market served. These growth rates do not exceed
management’s long-term expectations for the relevant markets.
Future cash flows have been discounted using pre-tax discount rates appropriate to the markets in
which the CGU operates, with a weighted average pre-tax discount rate of 17.0% (31 March 2025: 17.1%).
The discount rates are derived from the Group’s weighted average cost of capital and reflect market-
specific risks and the time value of money.
The key assumptions underpinning the assessment relate to forecast revenue growth, operating
margins, long-term growth rates and discount rates. These assumptions are based on management’s
expectations of future trading performance, taking into account historical experience, current trading
conditions and the Group’s strategic plans.
Sensitivity analysis has been performed on the key assumptions used in the value in use calculation. All
other assumptions remaining unchanged, an increase in the pre-tax discount rate from 17.0% to 30.5%
(31 March 2025: 17.1% to 24.2%), a 12.1% reduction in forecast revenue or a reduction in forecast EBIT
of 33.5% (31 March 2025: 31.5%) would reduce the headroom of the CTP CGU to £nil. No reasonably
possible change in any other key assumption would cause the carrying amount of the CGU to exceed its
Land and | Plant and | ||
buildings | equipment | Total | |
£000 | £000 | £000 | |
Cost | |||
Balance at 1 April 2024 | 47,235 | 76,555 | 123,790 |
Additions | 1,504 | 944 | 2,448 |
Disposals | (4,580) | (4,501) | (9,081) |
Effect of movements in foreign exchange | (787) | (931) | (1,718) |
Balance at 31 March and 1 April 2025 | 43,372 | 72,067 | 115,439 |
Additions | 934 | 2,374 | 3,308 |
Disposals | (12) | (1,132) | (1,144) |
Reassessment of lease value | (697) | 21 | (676) |
Reclassification of assets under construction | |||
to intangibles | — | (208) | (208) |
Effect of movements in foreign exchange | (67) | (404) | (471) |
Balance at 31 March 2026 | 43,530 | 72,718 | 116,248 |
Depreciation and impairment losses | |||
Balance at 1 April 2024 | 23,579 | 59,810 | 83,389 |
Depreciation charge for the year | 3,357 | 3,099 | 6,456 |
Disposals | (4,514) | (4,414) | (8,928) |
Reversal of impairment | — | (209) | (209) |
Effect of movements in foreign exchange | (407) | (704) | (1,111) |
Balance at 31 March and 1 April 2025 | 22,015 | 57,582 | 79,597 |
Depreciation charge for the year | 3,020 | 2,876 | 5,896 |
Disposals | (12) | (1,108) | (1,120) |
Effect of movements in foreign exchange | 57 | (429) | (372) |
Balance at 31 March 2026 | 25,080 | 58,921 | 84,001 |
Carrying amounts | |||
At 1 April 2024 | 23,656 | 16,745 | 40,401 |
At 1 April 2025 | 21,357 | 14,485 | 35,842 |
At 31 March 2026 | 18,450 | 13,797 | 32,247 |
Carclo plc
Annual report and accounts 2026
continued
Notes to the consolidated financial statements
for the year ended 31 March 2026
Strategic report
Corporate governance
Financial statements
Additional information
116
Carclo plc
Annual report and accounts 2026
continued
Notes to the consolidated financial statements
for the year ended 31 March 2026
Strategic report
Corporate governance
Financial statements
Additional information
117
2026 | 2025 | |
£000 | £000 | |
Amounts due within one year | ||
Trade receivables | 14,488 | 10,764 |
Less impairment provisions | (70) | (189) |
14,418 | 10,575 | |
Prepayments | 2,397 | 3,761 |
Other debtors | 1,532 | 1,323 |
Trade and other receivables – due within one year | 18,347 | 15,659 |
Amounts due after one year | ||
Other debtors and prepayments | 540 | 594 |
Trade and other receivables – due after one year | 540 | 594 |
The Group applies the IFRS 9 simplified approach to measuring expected credit losses which uses a
2026 | 2025 | |
£000 | £000 | |
Raw materials and consumables | 4,745 | 4,680 |
Work in progress | 910 | 894 |
Finished goods | 5,374 | 4,354 |
11,029 | 9,928 |
The value of inventories is stated after impairment for obsolescence and write downs to net realisable
value of £0.7 million (2025: £0.5 million). Cost of inventories recognised as an expense which are
2026 | 2025 | |
£000 | £000 | |
Contract assets – amounts due within one year | 1,742 | 1,551 |
Contract assets – amounts due in more than one year | 74 | 170 |
1,816 | 1,721 |
lifetime expected loss allowance for all contract assets.
To measure the expected credit losses, contract assets have been grouped based on shared credit
risk characteristics. The contract assets relate to unbilled work in progress and are therefore not past
due. The Group has reviewed the risk characteristics and considers them to be the same as the trade
receivables not past due for the same types of contracts. The Group has concluded that the expected
Against an opening contract asset balance of £1.7 million at 31 March 2025, £1.4 million has been
Carclo plc
Annual report and accounts 2026
continued
Notes to the consolidated financial statements
for the year ended 31 March 2026
Strategic report
Corporate governance
Financial statements
Additional information
118
17 Trade and other receivables
continued
as follows for trade receivables:
| 2026 | 2025 | |||||
Gross carrying | Gross carrying | |||||
amount | Loss allowance | Expected loss rate | amount | Loss allowance | Expected loss rate | |
£000 | £000 | % | £000 | £000 | % | |
Not past due | 12,824 | 67 | 0.5% | 9,668 | 110 | 1.1% |
Past due 0 - 30 days | 1,456 | 1 | 0.1% | 913 | 3 | 0.3% |
Past due 31 - 60 days | 136 | — | 0.0% | 107 | 4 | 3.7% |
Past due 61 - 120 days | 70 | — | 0.0% | 21 | 17 | 81.0% |
More than 120 days | 2 | 2 | 100.0% | 55 | 55 | 100.0% |
14,488 | 70 | 0.5% | 10,764 | 189 | 1.8% | |
The movement in the allowance for impairment in respect of trade receivables and contract assets during the year was as follows:
2026 | 2025 | |
£000 | £000 | |
Balance at 1 April | 189 | 694 |
Amounts written off | (44) | (610) |
Net measurement of loss allowance | (75) | 105 |
Balance at 31 March | 70 | 189 |
2026 | 2025 | |
£000 | £000 | |
Cash at bank and in hand | 5,769 | 10,745 |
5,769 | 10,745 |
At 31 March 2026, £1.5 million cash was held on deposit (2025: £1.4 million).
The above figure reconciles to the amount of cash shown in the statement of cash flows at the end of the financial year as follows:
2026 | 2025 | |
£000 | £000 | |
Balance as above | 5,769 | 10,745 |
Bank overdrafts (see note 19) | — | (765) |
Balance per statement of cash flows | 5,769 | 9,980 |
Until 26 March 2025, the Group had a net UK multi-party, multi-currency overdraft facility with a £nil net limit and a £12.5 million gross limit per party. Since that date, the Group does not have an overdraft facility
available. At 31 March 2025, Carclo plc was briefly overdrawn due to timing of cash flows; however, the balance was immediately repaid on 1 April 2025, with no adverse consequence. The overdraft of £0.8 million
from the year ended 31 March 2025 is presented within note 19.
Carclo plc
Annual report and accounts 2026
continued
Notes to the consolidated financial statements
for the year ended 31 March 2026
Strategic report
Corporate governance
Financial statements
Additional information
119
2026 |
2025 |
|
£000 |
£000 |
|
Current |
||
Bank overdrafts |
— |
765 |
Bank loans: |
||
Term loan |
3,985 |
21,233 |
Revolving credit facility |
1,189 |
— |
Lease liabilities: |
||
Land and buildings |
1,178 |
1,642 |
Plant and equipment |
1,150 |
1,116 |
Other loans: |
||
Other |
66 |
88 |
7,568 |
24,844 |
|
Non-current |
||
Bank loans repayable between one and two years: |
||
Term loan |
19,684 |
— |
Revolving credit facility |
(226) |
— |
Lease liabilities: |
||
Land and buildings |
2,120 |
2,981 |
Plant and equipment |
498 |
2,027 |
Other loans: |
||
Other loans repayable between one and two years |
32 |
66 |
Other loans repayable between two and five years |
— |
31 |
22,108 |
5,105 |
|
Total loans and borrowings |
29,676 |
29,949 |
On 24 April 2025, the Group concluded the refinancing of its primary external borrowing facility
with a three-year multi-currency borrowing facility agreement with BZ Commercial Finance DAC
(“BZ”), comprising a term loan facility of £27.0 million and a revolving credit facility of £9.0 million. At
commencement, £29.9 million was borrowed under the BZ facility, of which £26.8 million was drawn
under the term loan and £3.1 million was drawn under the revolving credit facility. £21.3 million was
paid to discharge all amounts owing under the previous borrowing arrangement with HSBC, including
accrued interest, and £5.1 million of additional contributions were paid to the Group’s defined benefit
pension scheme, allowing securitised assets marked in favour of the pension scheme to be reassigned to
the new lender.
The BZ facility is an asset-based lending arrangement with drawings permitted against the value of
various classes of assets held by the UK and US businesses. Of the £27.0 million term loan element,
£8.0 million is designated against the value of owned land and buildings, £5.0 million is designated
against the value of owned plant and machinery and the balance of £14.0 million is designated as a cash
flow loan that is non-asset specific. Of the £9.0 million revolving credit facility, £7.0 million is designated
against the value of trade receivables and £2.0 million against the value of inventory.
The facility permits borrowings in GBP, EUR and USD. The named Group companies currently permitted
to borrow under the facility are Carclo plc, Carclo Technical Plastics Limited and Bruntons Aero
Products Limited. Group companies subject to cross guarantees under the BZ facility are the named
borrowing companies and material subsidiaries, as defined in the facility agreement.
Repayments on the term loan commenced in November 2025. At 31 March 2026, balances of the term
loan and the revolving credit facility were respectively: £23.7m and £1m.
Interest is calculated at SONIA, SOFR or €STR for loans denominated in GBP, USD or EUR respectively,
plus a margin of 4.5% for the receivables facility, 6.0% for the inventory, plant and machinery and
property facilities, and 7.5% for the cash flow facility. In addition, 2.0% is payable on the undrawn portion
of the £9.0 million revolving credit facility.
Bank facilities at 31 March 2026 were subject to three monthly covenant tests as follows:
1.
minimum EBITDA;
2. fixed charge ratio cover; and
3. CAPEX.
Further details of the covenants can be found in note 1.
The Group has complied with the financial covenants of its borrowing facilities during the financial
reporting period.
Carclo plc
Annual report and accounts 2026
continued
Notes to the consolidated financial statements
for the year ended 31 March 2026
Strategic report
Corporate governance
Financial statements
Additional information
120
19 Loans and borrowings
continued
Reconciliation of movements of liabilities to cash flows arising from financing activities
Bank | Term | Revolving | Lease | Other | ||
overdraft | loan | credit facility | liabilities | loans | Total | |
£000 | £000 | £000 | £000 | £000 | £000 | |
Balance at 1 April 2024 | 4,479 | 23,682 | 300 | 11,167 | 282 | 39,910 |
Changes from financing cash flows | ||||||
Transaction costs associated with the issue of debt | — | (150) | — | — | — | (150) |
Repayment of borrowings | — | (2,225) | (300) | (4,907) | (95) | (7,527) |
Changes in bank overdraft | (4,184) | — | — | — | — | (4,184) |
Interest paid | 470 | — | — | — | — | 470 |
(3,714) | (2,375) | (300) | (4,907) | (95) | (11,391) | |
Effect of changes in foreign exchange rates | — | (371) | — | (161) | (2) | (534) |
Liability-related other changes | ||||||
Drawings on new facilities | — | — | — | 1,327 | — | 1,327 |
Reassessment of lease liability | — | — | — | — | — | — |
Termination of facilities | — | — | — | (339) | — | (339) |
Interest expense – presented within non-underlying items | — | — | — | — | — | — |
Interest expense – presented within finance expense | — | 297 | — | 679 | — | 976 |
— | 297 | — | 1,667 | — | 1,964 | |
Equity-related other changes | — | — | — | — | — | — |
Balance at 1 April 2025 | 765 | 21,233 | — | 7,766 | 185 | 29,949 |
Carclo plc
Annual report and accounts 2026
continued
Notes to the consolidated financial statements
for the year ended 31 March 2026
Strategic report
Corporate governance
Financial statements
Additional information
121
19 Loans and borrowings
continued
Reconciliation of movements of liabilities to cash flows arising from financing activities
continued
Bank |
Term |
Revolving |
Lease |
Other |
||
overdraft |
loan |
credit facility |
liabilities |
loans |
Total |
|
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
|
Balance at 1 April 2025 |
765 |
21,233 |
— |
7,766 |
185 |
29,949 |
Changes from financing cash flows |
||||||
Drawings on new facilities |
— |
26,812 |
3,099 |
— |
— |
29,911 |
Transaction costs associated with the issue of debt |
— |
(1,908) |
(636) |
— |
— |
(2,544) |
Repayment of HSBC facility |
— |
(21,255) |
— |
— |
— |
(21,255) |
Repayment of borrowing |
(765) |
(1,877) |
(1,698) |
(3,431) |
(63) |
(7,834) |
Changes in bank overdraft |
— |
— |
— |
— |
— |
— |
Interest paid |
— |
— |
— |
— |
— |
— |
(765) |
1,772 |
765 |
(3,431) |
(63) |
(1,722) |
|
Effect of changes in foreign exchange rates |
— |
(171) |
— |
43 |
(24) |
(152) |
Liability-related other changes |
||||||
Drawings on new facilities |
— |
— |
— |
786 |
— |
786 |
Reassessment of lease liability |
— |
— |
— |
(676) |
— |
(676) |
Amortisation of transaction costs – presented within finance expense |
— |
645 |
198 |
— |
— |
843 |
Amortisation of transaction costs – presented within non-underlying items |
— |
190 |
— |
— |
— |
190 |
Interest expense |
— |
— |
— |
458 |
— |
458 |
— |
835 |
198 |
568 |
— |
1,601 |
|
Equity-related other changes |
— |
— |
— |
— |
— |
— |
Balance at 31 March 2026 |
— |
23,669 |
963 |
4,946 |
98 |
29,676 |
Recognised deferred tax assets and liabilities
Deferred tax assets and liabilities are attributable to the following:
2026 |
2025 |
|
£000 |
£000 |
|
Assets: |
||
Property, plant and equipment |
328 |
323 |
Short-term timing differences |
137 |
286 |
Tax losses |
800 |
648 |
Offset with deferred tax liabilities |
(1,182) |
(616) |
Deferred tax assets |
83 |
641 |
Liabilities: |
||
Intangible assets |
(2,417) |
(2,441) |
Property, plant and equipment |
(1,758) |
(854) |
Short-term timing differences |
(80) |
(71) |
Tax losses |
— |
— |
Foreign tax on undistributed foreign profits |
(394) |
(291) |
Offset with deferred tax assets |
1,182 |
616 |
Deferred tax liabilities |
(3,467) |
(3,041) |
Net deferred tax liability |
(3,384) |
(2,400) |
Unrecognised deferred tax assets
Deferred tax assets have not been recognised in respect of the following items:
2026 |
2025 |
|
£000 |
£000 |
|
Tax losses – trading |
6,460 |
5,997 |
Tax losses – capital |
50 |
50 |
Tax losses – non-trading |
914 |
737 |
Property, plant and equipment |
2,969 |
3,021 |
Short-term timing differences |
2,378 |
1,616 |
Employee benefits |
11,947 |
12,936 |
24,718 |
24,357 |
Deferred tax assets have not been recognised on the balance sheet to the extent that the underlying
timing differences are not expected to reverse. The nature of the tax regimes in certain regions in which
the Group operates are such that tax losses may arise even though the business is profitable. This
situation is expected to continue in the medium term.
Capital losses will be recognised at the point when a transaction gives rise to an offsettable capital gain;
this was not the case at 31 March 2026. Similarly, non-trading losses will only be utilised against future
non-trading profits. No such non-trading profits are foreseen at 31 March 2026.
At 31 March 2026, £0.4 million of deferred tax liabilities were recognised for taxes that would be
deductible on the unremitted earnings of the Group’s overseas subsidiary undertakings (2025: £0.3
million). As the Group policy is to continually reinvest in those businesses, provision has not been made
against unremitted earnings that are not planned to be remitted. If all earnings were remitted it is
estimated that £0.6 million of additional tax would be payable (2025: £0.7 million).
Deferred tax assets and liabilities at 31 March 2026 have been calculated based on the rates
substantively enacted at the balance sheet date.
The main rate of corporation tax became 25% from 1 April 2023. Deferred tax on future UK balances
has been calculated based on this rate. Overseas taxes are calculated at the rates prevailing in the
respective jurisdictions.
Carclo plc
Annual report and accounts 2026
continued
Notes to the consolidated financial statements
for the year ended 31 March 2026
Strategic report
Corporate governance
Financial statements
Additional information
122
Carclo plc
Annual report and accounts 2026
continued
Notes to the consolidated financial statements
for the year ended 31 March 2026
Strategic report
Corporate governance
Financial statements
Additional information
123
20 Deferred tax assets and liabilities
continued
Reconciliation of movement in net recognised deferred tax liabilities
Recognised | ||||
Balance | in other | Balance | ||
as at | Recognised | comprehensive | as at | |
1 April 2025 | in income | income | 31 March 2026 | |
£000 | £000 | £000 | £000 | |
Property, plant and equipment | (531) | (872) | (26) | (1,429) |
Intangible assets | (2,441) | — | 24 | (2,417) |
Short-term timing differences | 215 | (157) | (1) | 57 |
Tax losses | 648 | 149 | 2 | 799 |
Foreign tax on undistributed foreign profits | (291) | (103) | — | (394) |
(2,400) | (983) | (1) | (3,384) |
Recognised | ||||
Balance | in other | Balance | ||
as at | Recognised | comprehensive | as at | |
1 April 2024 | in income | income | 31 March 2025 | |
£000 | £000 | £000 | £000 | |
Property, plant and equipment | (553) | 23 | (1) | (531) |
Intangible assets | (2,475) | — | 34 | (2,441) |
Short-term timing differences | 1,045 | (830) | — | 215 |
Tax losses | 76 | 591 | (19) | 648 |
Foreign tax on undistributed foreign profits | (119) | (171) | (1) | (291) |
(2,026) | (387) | 13 | (2,400) |
The Group operates a UK defined benefit pension scheme which provides pensions based on service
and final pay. Outside of the UK, retirement benefits are determined according to local practice and
funded accordingly.
In the UK, Carclo plc sponsors the Carclo Group Pension Scheme (the “Scheme”), a funded defined
benefit pension scheme which provides defined benefits for some of its members. This is a legally
separate, trustee-administered fund holding the Scheme’s assets to meet long-term pension liabilities
for some 2,269 current and past employees as at 31 March 2026.
The Trustee of the Scheme is required to act in the best interest of the Scheme’s beneficiaries.
The appointment of the Trustee is determined by the Scheme’s trust documentation. For the year ended
31 March 2026 the Trustees currently comprised of two Company nominated trustees (of which one is an
independent professional Trustee and one is the Independent professional Chairperson) as well as one
member-nominated trustee. As at 1 April 2026 the Trustee is a sole independent professional trustee
and PAN Sole Trustees Limited was appointed in this role on 1 April 2026. The Trustee is also responsible
for the investment of the Scheme’s assets.
The Scheme provides pensions and lump sums to members on retirement and to their dependants on
death. The level of retirement benefit is principally based on final pensionable salary prior to leaving
active service and is linked to changes in inflation up to retirement. The defined benefit section is closed
to new entrants who instead have the option of entering into the defined contribution section of the
Scheme, and the Group has elected to cease future accrual for existing members of the defined benefit
section such that members who have not yet retired are entitled to a deferred pension.
The Company currently pays contributions to the Scheme as determined by regular actuarial valuations.
The trustees are required to use prudent assumptions to value the liabilities and costs of the Scheme
whereas the accounting assumptions that support the IAS 19 calculation must be best estimates.
The Scheme is subject to the funding legislation, which came into force on 30 December 2005,
outlined in the Pensions Act 2004. This, together with documents issued by the Pensions Regulator and
Guidance Notes adopted by the Financial Reporting Council, set out the framework for funding defined
benefit occupational pension plans in the UK.
A full actuarial valuation was carried out as at 31 March 2024 in accordance with the scheme funding
requirements of the Pensions Act 2004. The funding of the Scheme is agreed between the Group
and the trustees in line with those requirements. These, in particular, require the surplus or deficit to
be calculated using prudent, as opposed to best estimate, actuarial assumptions. The 31 March 2024
actuarial valuation showed a deficit of £64.5 million (31 March 2021 actuarial valuation deficit: £82.8
million). Under the recovery plan agreed with the trustees following the 2024 valuation, the Group
agreed that it would aim to eliminate the deficit, over a period of 13 years and 7 months commencing
1 April 2024 and continuing until 31 October 2037, by the payment of annual contributions combined
with the assumed asset returns in excess of gilt yields. The trustees and the Group have agreed that
contributions will be paid to the Scheme as follows: £3.5 million per annum payable monthly for a
period of five years from 1 April 2024 to 31 March 2029 and £5.75 million per annum payable monthly
for a period of eight years and seven months from 1 April 2029 to 31 October 2037, plus £5.1 million as a
one-off lump sum payment on 24 April 2025. These contributions include an allowance of £0.6 million
in respect of the expenses of running the Scheme and the Pension Protection Fund (“PPF”) levy in years
ending 31 March 2026 onwards.
At each triennial valuation, the schedule of contributions is reviewed and reconsidered between the
employer and the trustees; the next review being no later than by 30 June 2028 after the results of the
31 March 2027 triennial valuation are known.
On 14 August 2020, security was granted by certain Group companies to the Scheme trustees. As at
31 March 2025, the gross value of the assets secured, which includes applicable intra-group balances,
goodwill and investments in subsidiaries at net book value in the relevant component companies’
accounts, but which eliminate in the Group upon consolidation, amounted to £122.8 million. Excluding
the assets which eliminate in the Group upon consolidation, the value of the security was £30.5 million.
This security was released in 2026 following the payment of a £5.1 million lump sum payment.
For the purposes of IAS 19, the results of the actuarial valuation as at 31 March 2025, which was carried
out by a qualified independent actuary, have been updated on an approximate basis to 31 March 2026.
There have been no changes in the valuation methodology adopted for this year’s disclosures compared
to the previous year’s disclosures.
The Scheme exposes the Group to actuarial risks and the key risks are set out in the table presented
below. In each instance these risks would detrimentally impact the Group’s statement of financial
position and may give rise to increased interest costs in the Group income statement. The trustees
could require higher cash contributions or additional security from the Group.
The trustees manage governance and operational risks through a number of internal controls policies,
including a risk register and integrated risk management.
Carclo plc
Annual report and accounts 2026
continued
Notes to the consolidated financial statements
for the year ended 31 March 2026
Strategic report
Corporate governance
Financial statements
Additional information
124
Carclo plc
Annual report and accounts 2026
continued
Notes to the consolidated financial statements
for the year ended 31 March 2026
Strategic report
Corporate governance
Financial statements
Additional information
125
21 Retirement benefit obligations
continued
Risk | Description | Mitigation |
Investment risk | Weaker than expected investment returns result in a | The trustee continually monitors investment risk and performance and dedicates specific time at each meeting for such |
worsening in the Scheme’s funding position. | duties. In addition, specific investment-focused meetings, which include a Group representative, take place to consider | |
investment strategy. The trustee is advised by professional investment advisors. | ||
The Scheme currently invests approximately 60% of its asset value in liability-driven investments and cash flow | ||
matching credit funds, 28% in a portfolio of diversified growth funds and 12% in cash and liquidity funds. The objective | ||
of the growth portfolio is that in combination, the matching credit, liability-driven investments and cash components | ||
generate sufficient return to meet the overall portfolio return objective. | ||
Interest rate risk | A decrease in corporate bond yields increases the | The trustee’s investment strategy includes investing in liability-driven investments and bonds whose values increase |
present value of the IAS 19 defined benefit obligations. | with decreases in interest rates. | |
A decrease in gilt yields results in a worsening in the | At the end of the Group’s accounting period, the strategy targets that 75% of the Scheme’s liabilities are hedged on the | |
Scheme’s funding position. | Scheme’s technical provisions basis against interest rates using liability-driven investments. | |
It should be noted that the Scheme hedges interest rate risk on a statutory and long-term funding basis (gilts) whereas | ||
AA corporate bonds are implicit in the IAS 19 discount rate and so there is some mismatching risk to the Group should | ||
yields on gilts and corporate bonds diverge. | ||
Inflation risk | An increase in inflation results in higher benefit increases | The trustee’s investment strategy at the end of the Group’s accounting period included investing in liability-driven |
for members which in turn increases the Scheme’s | investments which will move with inflation expectations with approximately 75% of the Scheme’s inflation-linked | |
liabilities. | liabilities being hedged on the Scheme’s technical provisions basis. | |
The growth assets held are expected to provide protection over inflation in the long term. | ||
Mortality risk | An increase in life expectancy leads to benefits being | The Scheme actuary provides regular updates on mortality, based on scheme experience, and the assumption continues |
payable for a longer period which results in an increase in | to be reviewed. | |
the Scheme’s liabilities. |
The amounts recognised in the statement of financial position in respect of the defined benefit scheme were as follows:
2026 | 2025 | |
£000 | £000 | |
Present value of funded obligations | (129,711) | (133,155) |
Fair value of Scheme assets | 82,926 | 81,412 |
Recognised liability for defined benefit obligations | (46,785) | (51,743) |
The present value of Scheme liabilities is measured by discounting the best estimate of future cash flows to be paid out of the Scheme using the projected unit credit method. The value calculated in this way is
reflected in the net liability in the statement of financial position as shown above.
The projected unit credit method is an accrued benefits valuation method in which allowance is made for projected earnings increases. The accumulated benefit obligation is an alternative actuarial measure of the
Scheme’s liabilities whose calculation differs from that under the projected unit credit method in that it includes no assumption for future earnings increases. In this case, as the Scheme is closed to future accrual,
the accumulated benefit obligation is equal to the valuation using the projected unit credit method.
All actuarial remeasurement gains and losses will be recognised in the year in which they occur in other comprehensive income.
The cumulative remeasurement net loss reported in the statement of comprehensive income since 1 April 2004 is £69.3 million.
IFRIC 14 has no effect on the figures disclosed because the Company has an unconditional right to a refund under the resulting trust principle.
21 Retirement benefit obligations
continued
Movements in the net liability for defined benefit obligations recognised in the
consolidated statement of financial position
2026 | 2025 | |
£000 | £000 | |
Net liability for defined benefit obligations at the start of the year | (51,743) | (37,186) |
Contributions paid | 8,600 | 3,208 |
Net expense recognised in the consolidated income statement | ||
(see below) | (3,693) | (2,512) |
Remeasurement gains/(losses) recognised in other | ||
comprehensive income | 51 | (15,253) |
Net liability for defined benefit obligations at the end | ||
of the year | (46,785) | (51,743) |
Movements in the present value of defined benefit obligations
2026 | 2025 | |
£000 | £000 | |
Defined benefit obligation at the start of the year | 133,155 | 130,420 |
Interest expense | 7,230 | 6,089 |
Actuarial loss due to scheme experience | 555 | 5,809 |
Actuarial loss due to changes in demographic assumptions | 2,467 | 11,051 |
Actuarial gain due to changes in financial assumptions | (3,178) | (10,332) |
Benefits paid | (10,518) | (9,882) |
Defined benefit obligation at the end of the year | 129,711 | 133,155 |
There have been no plan amendments, curtailments or settlements during the year.
The English High Court ruling in Lloyds Banking Group Pension Trustees Limited v Lloyds Bank plc and
others was published on 26 October 2018, and held that UK pension schemes with Guaranteed Minimum
Pensions (“GMPs”) accrued from 17 May 1990 must equalise for the different effects of these GMPs
between men and women. The case also gave some guidance on related matters, including the methods
for equalisation.
The trustees of the plan will need to obtain legal advice covering the impact of the ruling on the plan,
before deciding with the employer on the method to adopt. The legal advice will need to consider
(among other things) the appropriate GMP equalisation solution, whether there should be a time limit
on the obligation to make back-payments to members (the “look-back” period) and the treatment of
former members (members who have died without a spouse and members who have transferred out for
example).
In the year to 31 March 2020, the trustees commissioned scheme-specific calculations to determine
the likely impact of the ruling on the Scheme. An allowance for the impact of GMP equalisation was
included within the accounting figures for that year, increasing liabilities by 1.68%, and a resulting past
service cost of £3.6 million was recognised in the income statement at that time. The Scheme has not
yet implemented GMP equalisation and therefore the allowance made in 2019 has been maintained for
accounting disclosures.
On 20 November 2020, the High Court issued a supplementary ruling in the Lloyds Bank GMP
equalisation case with respect to members that have transferred out of their scheme prior to the ruling.
The results mean that trustees are obliged to make top-up payments that reflect equalisation benefits
and to make top-up payments where this was not the case in the past. Also, a defined benefit scheme
that received a transfer is concurrently obliged to provide equalised benefits in respect to the transfer
payments and, finally, there were no exclusions on the grounds of discharge forms, CETV legislation,
forfeiture provisions or the Limitation Act 1980.
The impact of this ruling was estimated to cost £0.2 million (approximately 0.1% of liabilities). This
additional service cost was recognised through the income statement as a past service cost in the year
ended 31 March 2021 and was presented within non-underlying items and therefore the impact of the
ruling is allowed for in the figures presented at 31 March 2026.
During the year to 31 March 2024, the trustees of the Scheme identified that a group of members
required an adjustment to their benefits in respect of the requirement to provide equal benefits to
males and females following the Barber judgement in 1990. In summary, the adjustment consisted of
decreasing the normal retirement age from 65 to 60 for some members’ benefits, for some elements
of service after 17 May 1990. This resulted in additional liabilities in the Scheme which were accounted
for as a £1.0 million past service cost in the income statement, recognised as a non-underlying cost
(approximately 0.8% of liabilities) in the year ended 30 March 2024.
In June 2023, the judgement in the Virgin Media v NTL Pension Trustees Limited case was handed
down. The case decided that amendments made to the Virgin Media scheme were invalid because
the scheme’s actuary did not provide the associated Section 37 certificate necessary. The case was
subsequently reviewed by the Court of Appeal in July 2024 which upheld the High Court’s decision.
In June 2025, the Department for Work and Pensions (“DWP”) confirmed that the Government will
introduce legislation to give affected pension schemes the ability to retrospectively obtain written
actuarial confirmation that historic benefit changes met the necessary standards. Further detail on
the approach and process for this retrospective confirmation is expected to follow in due course.
The decision has a wide range of implications, affecting other schemes that were contracted out on
a salary-related basis, and made amendments between April 1997 and April 2016. Historic scheme
amendments without the appropriate certification might now be considered invalid, leading to additional
unforeseen liabilities.
The Carclo Group scheme was contracted out and amendments were made during the relevant period.
As such, the ruling could have implications for the Company. Carclo has been supporting the trustees
of the Scheme to begin the process of investigating any potential impact for the Scheme. This has
included compiling a list of all the relevant deeds and amendments made over the relevant period and
determining which of these could have a material impact on member benefits and identifying areas
where further investigation is required.
Carclo plc
Annual report and accounts 2026
continued
Notes to the consolidated financial statements
for the year ended 31 March 2026
Strategic report
Corporate governance
Financial statements
Additional information
126
21 Retirement benefit obligations
continued
As the detailed investigation is currently ongoing, the amount of any potential impact on the defined
benefit obligation cannot be confirmed and/or measured with sufficient certainty at 31 March 2026. As
such, it is identified as a potential contingent liability at the 2026 year end. The situation will be reviewed
again at the next reporting date when there may be further clarity. Until then, the Company and the
trustees will continue to seek legal advice on the matter and will act accordingly.
The Scheme liabilities are split between active, deferred and pensioner members at 31 March as follows:
2026 | 2025 | |
% | % | |
Active | — | — |
Deferred | 28 | 27 |
Pensioners | 72 | 73 |
100 | 100 |
Movements in the fair value of Scheme assets
2026 | 2025 | |
£000 | £000 | |
Fair value of Scheme assets at the start of the year | 81,412 | 93,234 |
Interest income | 4,519 | 4,344 |
Loss on Scheme assets excluding interest income | (105) | (8,725) |
Contributions by employer | 8,600 | 3,208 |
Benefits paid | (10,518) | (9,882) |
Expenses paid | (982) | (767) |
Fair value of Scheme assets at the end of the year | 82,926 | 81,412 |
Actual gain/(loss) on Scheme assets | 4,414 | (4,381) |
The fair value of Scheme asset investments was as follows:
2026 | 2025 | |
£000 | £000 | |
Diversified growth funds | 23,470 | 26,160 |
Bonds and liability-driven investment funds | 49,799 | 52,011 |
Cash and liquidity funds | 10,182 | 3,241 |
Less accrued fees | (525) | — |
Total assets | 82,926 | 81,412 |
None of the fair values of the assets shown include any of the Group’s own financial instruments or any
property occupied, or other assets used by, the Group.
All of the Scheme assets have a quoted market price in an active market with the exception of the
trustees’ bank account balance.
Diversified growth funds are pooled funds invested across a diversified range of assets with the aim of
giving long-term investment growth with lower short-term volatility than equities.
It is the policy of the trustees and the Group to review the investment strategy at the time of each
funding valuation. The trustees’ investment objectives and the processes undertaken to measure and
manage the risks inherent in the Scheme are set out in the Statement of Investment Principles.
A proportion of the Scheme’s assets is invested in the BMO LDI Nominal Dynamic LDI Fund and in the
BMO LDI Real Dynamic LDI Fund which provides a degree of asset liability matching.
The net expense recognised in the consolidated income statement was as follows:
2026 | 2025 | |
£000 | £000 | |
Net interest on the net defined benefit liability | 2,711 | 1,745 |
Scheme administration expenses | 982 | 767 |
3,693 | 2,512 |
The net expense recognised in the following line items in the consolidated income statement was as
follows:
2026 | 2025 | ||
Note | £000 | £000 | |
Charged to operating profit | 746 | 482 | |
Charged to non-underlying items | 8 | 236 | 285 |
Other finance revenue and expense – net interest | |||
on the net defined benefit liability | 2,711 | 1,745 | |
3,693 | 2,512 |
Carclo plc
Annual report and accounts 2026
continued
Notes to the consolidated financial statements
for the year ended 31 March 2026
Strategic report
Corporate governance
Financial statements
Additional information
127
Carclo plc
Annual report and accounts 2026
continued
Notes to the consolidated financial statements
for the year ended 31 March 2026
Strategic report
Corporate governance
Financial statements
Additional information
128
21 Retirement benefit obligations
continued
The principal actuarial assumptions at the balance sheet date (expressed as weighted averages) were:
2026 | 2025 | |
% | % | |
Discount rate at 31 March | 5.95 | 5.65 |
Future salary increases | N/A | N/A |
Inflation (RPI) (non-pensioner) | 3.35 | 3.2 |
Inflation (CPI) (non-pensioner) | 2.95 | 2.7 |
Allowance for revaluation of deferred pensions of RPI or 5% p.a. if less | 3.3 | 3.3 |
Allowance for revaluation of deferred pensions of CPI or 5% p.a. if less | 2.8 | 2.8 |
Allowance for pension in payment increases of RPI or 5% p.a. if less | 3.1 | 3.0 |
Allowance for pension in payment increases of CPI or 3% p.a. if less | 2.25 | 2.1 |
Allowance for pension in payment increases of RPI or 5% p.a. if less, minimum 3% p.a. | 3.75 | 3.75 |
Allowance for pension in payment increases of RPI or 5% p.a. if less, minimum 4% p.a. | 4.30 | 4.30 |
The mortality assumptions adopted at 31 March 2026 are 127% of each of the standard tables S3PMA/S3PFA (2025: 127% of S3PMA/S3PFA respectively), year of birth, no age rating for males and females,
projected using CMI_2025 (2025: CMI_2023) converging to 1.0% p.a. (2025: 1.0%) with a smoothing parameter 7.0% (2025: 7.0%).
2026 | 2025 | |
Life expectancy for a male (current pensioner) aged 65 | 20 years | 19.3 years |
Life expectancy for a female (current pensioner) aged 65 | 21.7 years | 21.3 years |
Life expectancy at 65 for a male aged 45 | 20.9 years | 20.2 years |
Life expectancy at 65 for a female aged 45 | 22.9 years | 22.5 years |
It is assumed that 80% of the post A-Day maximum for active and deferred members will be commuted for cash (2025: 80%).
Pension Increase Exchange take-up was estimated to be 40% on implementation in the year ended 31 March 2022; there has been no change made to this assumption nor to the 2021 bridging pension option
take-up of 40%.
The pension scheme liabilities are derived using actuarial assumptions for inflation, future salary increases, discount rates, mortality rates and commutation. Due to the relative size of the Scheme’s liabilities, small
changes to these assumptions can give rise to a significant impact on the pension scheme deficit reported in the Group statement of financial position.
Carclo plc
Annual report and accounts 2026
continued
Notes to the consolidated financial statements
for the year ended 31 March 2026
Strategic report
Corporate governance
Financial statements
Additional information
129
21 Retirement benefit obligations
continued
The sensitivity to the principal actuarial assumptions of the present value of the defined benefit obligation is shown in the following table:
2026 |
2026 |
2025 |
2025 |
|
% |
£000 |
% |
£000 |
|
Discount rate 1 |
||||
Increase of 0.25% per annum |
(2.23%) |
(2,892) |
(2.19%) |
(2,913) |
Decrease of 0.25% per annum |
2.32% |
3,008 |
2.27% |
3,028 |
Decrease of 1.0% per annum |
9.86% |
12,789 |
9.66% |
12,869 |
Inflation 2 |
||||
Increase of 0.25% per annum |
0.63% |
816 |
0.46% |
610 |
Increase of 1.0% per annum |
2.32% |
3,010 |
2.22% |
2,951 |
Decrease of 1.0% per annum |
(2.32%) |
(3,003) |
(2.25%) |
(2,994) |
Life expectancy |
||||
Increase of 1 year |
3.83% |
4,966 |
4.03% |
5,361 |
1.
At 31 March 2026, the assumed discount rate is 5.95% (2025: 5.65%).
2. At 31 March 2026, the assumed rate of RPI inflation is 3.35% and CPI inflation 2.95% (2025: RPI 3.2% and CPI 2.7%).
The sensitivities shown above are approximate. Each sensitivity considers one change in isolation. The inflation sensitivity includes the impact of changes to the assumptions for revaluation and pension increases.
The weighted average duration of the defined benefit pension obligation at 31 March 2026 is ten years (2025: ten years).
The life expectancy assumption at 31 March 2026 is based upon increasing the age rating assumption by one year (2025: one year).
Other than those specifically mentioned above, there were no changes in the methods and assumptions used in preparing the sensitivity analysis from the prior year.
The history of the Scheme’s deficits and experience gains and losses is shown in the following table:
2026 |
2025 |
|
£000 |
£000 |
|
Present value of funded obligation |
(129,711) |
(133,155) |
Fair value of Scheme asset investments |
82,926 |
81,412 |
Recognised liability for defined benefit obligations |
(46,785) |
(51,743) |
Actual gain/(loss) on Scheme assets |
4,414 |
(4,381) |
Actuarial loss due to scheme experience |
(555) |
(5,809) |
Actuarial losses due to changes in demographic assumptions |
(2,467) |
(11,051) |
Actuarial gains due to changes in financial assumptions |
3,178 |
10,332 |
Carclo plc
Annual report and accounts 2026
continued
Notes to the consolidated financial statements
for the year ended 31 March 2026
Strategic report
Corporate governance
Financial statements
Additional information
130
2026 |
2025 |
|||||
Property |
Tucson, US |
Legacy |
Property |
|||
dilapidation |
Total |
restructuring |
health claims |
dilapidation |
Total |
|
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
|
Balance at 1 April |
975 |
975 |
709 |
12 |
900 |
1,621 |
Provision established in the year |
— |
— |
— |
— |
75 |
75 |
Provisions used in the year |
— |
— |
(261) |
(11) |
— |
(272) |
Provision released in the year |
— |
— |
(448) |
(1) |
— |
(449) |
Effect of movements in foreign exchange |
(6) |
(6) |
— |
— |
— |
— |
Balance at 31 March |
(969) |
(969) |
— |
— |
975 |
975 |
Non-current |
(969) |
(969) |
— |
— |
975 |
975 |
Current |
— |
— |
— |
— |
— |
— |
(969) |
(969) |
— |
— |
975 |
975 |
|
The amount of provision for dilapidation is management’s best estimate of the cost per sq ft to make good the properties should they be vacated at any time in the future. The provisions are not discounted as the
2026 | 2025 | |
£000 | £000 | |
Trade payables | 10,250 | 9,697 |
Other taxes and social security costs | 696 | 806 |
Other payables | 1,886 | 1,830 |
Accruals | 5,123 | 8,458 |
17,955 | 20,791 |
Ordinary shares of 5 pence each
Number | ||
of shares | £000 | |
Issued and fully paid at 31 March 2025 and 2026 | 73,419,193 | 3,671 |
There are 15,974 vested shares outstanding in respect of a buyout award granted to a former Director of
the Company. These are yet to be issued.
There are 3,313,537 potential share options outstanding under the performance share plan at 31 March
2026 (2025: 3,113,862). 68,300 shares vested during the year to 31 March 2026 (2025: nil).
The Group operates a number of share schemes for certain employees of the Group, as follows:
•
2023 Long-Term Incentive Plan (“LTIP”)
•
2025 Long-Term Incentive Plan (“LTIP”)
•
2025 Deferred Bonus Plan (“DBP”)
Conditional share awards have been granted to Executive Directors and senior managers within the
Group under the above schemes. In addition, a number of managers have been granted conditional
cash awards linked to the future value of Carclo plc shares, which also fall within the scope of IFRS 2
Share-based Payments .
The vesting conditions for the outstanding cash and equity awards are linked to continued employment
and satisfaction of market-based and non-market-based performance conditions.
As required under IFRS 2, a charge is recognised for the conditional share awards and conditional cash
awards granted under the PSP, and awards are valued using a Monte Carlo model and a Black-Scholes
model. Additional awards granted to Executive Directors are subject to a two-year post-vesting holding
period applicable to the post-tax number of shares acquired on vest. For these awards, a discount for
lack of marketability (“DLOM”) has been calculated using a Finnerty model.
Awards outstanding during the year ended 31 March 2026 under the performance share plan are as
follows:
Date | Number of | Earliest | ||
granted | shares | Price | date of vesting | |
2023 Long-Term Incentive Plan | 21 September | 21 September | ||
(“LTIP”) | 2023 | 2,355,000 | nil | 2026 |
2025 Long-Term Incentive Plan | 9 September | 9 September | ||
(“LTIP”) | 2025 | 750,000 | nil | 2028 |
2025 Deferred Bonus Plan | 9 September | 9 September | ||
(“DBP”) | 2025 | 208,537 | nil | 2027 |
There were two awards granted under the performance share plan in the year ended 31 March 2026,
one under a deferred bonus scheme and one performance share plan award.
Deferred bonus scheme
Under the Group’s Deferred Bonus Plan, Executive Directors are awarded an annual bonus, 70%
achieved in cash and 30% is awarded in the form of shares, for which there is a compulsory holding
period of two years and a requirement for continued employment before these fully vest to the
employee (“deferred shares”).
2026 | |
Deferred bonus scheme – date granted 9 September 2026 | Equity award |
Number of shares per tranche | 208,537 |
Fair value at grant date | N/A |
Share price at grant date | 59p |
Exercise price | nil |
Risk-free rate | N/A |
Expected volatility | N/A |
Expected dividend yield | 0% |
Carclo plc
Annual report and accounts 2026
continued
Notes to the consolidated financial statements
for the year ended 31 March 2026
Strategic report
Corporate governance
Financial statements
Additional information
131
24 Ordinary share capital
continued
Long-Term Incentive Plans
2026 | ||
Equity award | Equity award | |
Performance share plan – date granted 9 September 2025 | TSR | EPS |
Number of shares per tranche | 375,000 | 375,000 |
Fair value at grant date | 7p | 42p |
Share price at grant date | 53.5p | 53.5p |
Exercise price | 0.0p | 0.0p |
Risk-free rate | 4.00% | 4.00% |
Expected volatility | 60.00% | 60.00% |
Expected dividend yield | 0% | 0% |
Restricted equity awards are subject to a two-year post-vesting holding period.
The equity and restricted equity awards issued under the performance share plan on 9 September 2025
have a split performance condition whereby half of the awards would vest after three years based on
performance compared to total shareholder return (“TSR”) and the remaining half would vest based on
earnings per share (“EPS”) performance. For those granted on 9 September 2025, 100% of the awards
subject to the TSR performance condition will vest where the Company’s average share price during
the 60 days prior to vest (the “measurement period”) is at least 125 pence and 0% vest if the average
is lower than 65 pence, with options vesting in a straight-line apportionment between 65 pence and
120 pence.
100% of awards granted on 9 September 2025, subject to the EPS condition, will vest in full if Carclo
plc’s EPS for the financial year ending 31 March 2028 is at least 11.5 pence and 0% will vest if less than
7.5 pence. Between 11.5 pence and 7.5 pence, awards will vest on a straight-line apportionment.
The expected volatility is based on the historical volatility (calculated based on the weighted average
remaining life of the share options), adjusted for any expected changes to future volatility due to
publicly available information.
The amounts recognised in the income statement arising from equity-settled share-based payments
was a charge of £0.1 million (2025: charge of £0.03 million).
The number and weighted average exercise price of the outstanding awards under the PSP are set out in
the following table:
2026 | 2025 | |||
Weighted | Weighted | |||
average exercise | average exercise | |||
price | Number | price | Number | |
pence | of shares | pence | of shares | |
Outstanding at 1 April | — | 3,129,836 | — | 4,622,931 |
Lapsed during the year | — | (690,562) | — | (1,493,095) |
Settled/exercised during | ||||
the year | — | (68,300) | — | — |
Granted during the year | — | 958,537 | — | — |
Outstanding at the end | ||||
of the year | — | 3,329,511 | — | 3,129,836 |
Exercisable at 31 March | 15,974 | 15,974 | ||
Weighted average remaining | ||||
contractual life at 31 March | 0.98 years | 1.27 years | ||
Carclo plc
Annual report and accounts 2026
continued
Notes to the consolidated financial statements
for the year ended 31 March 2026
Strategic report
Corporate governance
Financial statements
Additional information
132
Carclo plc
Annual report and accounts 2026
continued
Notes to the consolidated financial statements
for the year ended 31 March 2026
Strategic report
Corporate governance
Financial statements
Additional information
133
Translation reserve
The translation reserve comprises all foreign exchange differences arising from the translation of the
financial statements of foreign subsidiaries, as well as from the translation of liabilities that hedge the
Company’s net investment in a foreign subsidiary.
Retained earnings
The Company maintains an employee share ownership plan for the benefit of employees and which
can be used in conjunction with any of the Group’s share option schemes. As at 31 March 2026, the
plan held 3,077 of its own shares (31 March 2025: 3,077 shares). The original cost of these shares was
£0.003 million (2025: £0.003 million). The cost of the shares was charged against the profit and loss
The Group’s financial instruments comprise bank loans and overdrafts, cash and short-term deposits.
These financial instruments are used for the purpose of funding the Group’s operations. In addition,
the Group has other financial instruments such as trade receivables, trade payables and lease liabilities
which arise directly from its operational activities.
credit risk, interest rate risk, liquidity risk and foreign currency risk.
Credit risk is the risk of financial loss to the Group if a customer or financial institution fails to meet its
contractual obligations. The Group’s credit risk is mainly attributable to its trade receivables which the
Group mitigates by way of credit insurance. Credit insurance, covering insolvency, default and political
risk, is sought for all customers where exposure is in excess of £0.02 million. Trade receivables are shown
after making due provision for any credit loss provision.
The Group maintains any surplus cash balances on deposit accounts or legal offset accounts with the
Group’s principal bank, which has a high credit rating assigned by independent international credit rating
agencies. In addition, the Group had undrawn revolving credit facilities of £9.0 million at 31 March 2026
(2025: £3.5 million).
The maximum exposure to credit risk as at 31 March was:
2026 | 2025 | |
£000 | £000 | |
Trade receivables, net of attributable impairment | ||
provisions (see note 17) | 14,418 | 10,575 |
Cash and cash deposits (see note 18) | 5,769 | 10,745 |
Contract assets (see note 16) | 1,816 | 1,721 |
22,003 | 23,041 |
Carclo is a worldwide supplier of components and systems. As a consequence, the Group’s trade
receivables and contract assets reside across a broad spectrum of countries with potentially higher
attributable credit risk in certain territories. The following tables analyse the geographical location of
trade receivables (net of attributable impairment provisions) and of contract assets:
2026 | 2025 | |
£000 | £000 | |
United Kingdom | 7,046 | 1,008 |
Rest of Europe | 1,822 | 3,432 |
North America | 4,040 | 2,756 |
Rest of world | 1,510 | 3,379 |
Trade receivables, net of attributable impairment provisions | 14,418 | 10,575 |
2026 | 2025 | |
£000 | £000 | |
United Kingdom | 478 | 178 |
Rest of Europe | 246 | 533 |
North America | 1,041 | 972 |
Rest of world | 51 | 38 |
Contract assets, net of attributable impairment provisions | 1,816 | 1,721 |
b) Interest rate risk
The Group’s borrowings are on fixed and floating rate terms, no borrowings are non-interest bearing.
The interest rate profile of financial liabilities by currency of the Group as at 31 March was as follows:
Fixed | Floating | ||
rate interest | rate interest | ||
payable | payable | Total | |
£000 | £000 | £000 | |
As at 31 March 2026 | |||
Sterling | 1,851 | 18,899 | 20,750 |
US dollar | 1,223 | 5,765 | 6,988 |
Euro | 362 | — | 362 |
Other | 1,510 | 66 | 1,576 |
4,946 | 24,730 | 29,676 |
b) Interest rate risk
continued
Fixed |
Floating |
||
rate interest |
rate interest |
||
payable |
payable |
Total |
|
£000 |
£000 |
£000 |
|
As at 31 March 2025 |
|||
Sterling |
3,033 |
7,588 |
10,621 |
US dollar |
2,633 |
10,301 |
12,934 |
Euro |
942 |
4,109 |
5,051 |
Other |
1,343 |
— |
1,343 |
7,951 |
21,998 |
29,949 |
The interest rate profile of financial assets by currency of the Group as at 31 March was as follows:
Floating |
Non-interest |
||
rate interest |
bearing |
||
receivable |
receivable |
Total |
|
£000 |
£000 |
£000 |
|
As at 31 March 2026 |
|||
Sterling |
685 |
907 |
1,592 |
US dollar |
448 |
223 |
671 |
Euro |
109 |
338 |
447 |
Other |
263 |
2,796 |
3,059 |
1,505 |
4,264 |
5,769 |
Floating |
Non-interest |
||
rate interest |
bearing |
||
receivable |
receivable |
Total |
|
£000 |
£000 |
£000 |
|
As at 31 March 2025 |
|||
Sterling |
1,250 |
3,760 |
5,010 |
US dollar |
— |
2,395 |
2,395 |
Euro |
84 |
1,460 |
1,544 |
Other |
76 |
1,720 |
1,796 |
1,410 |
9,335 |
10,745 |
During the year ended 31 March 2026, floating interest earned was from cash balances placed on money
market deposits earning between 1.7% - 4.5%.
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due.
The Group manages this risk by maintaining a mixture of term loans, revolving credit facilities and,
until recently, short-term overdraft facilities which were established to ensure that adequate funding is
available for its operating, investing and financing activities. Refer to note 19 for further details.
As detailed in note 19, at 31 March 2026, the Group had committed term loans outstanding of
£23.7 million (2025: £21.2 million) and a committed revolving credit facility available of £9.0 million
which was £1.0 million drawn (2025: £3.5 million facility, £nil drawn).
The Group’s net debt at 31 March 2026 was £23.9 million (2025: £19.2 million). The net debt comprised
£29.7 million interest-bearing loans and borrowings, see note 19, less £5.8 million cash and cash
deposits, see note 18.
At 31 March 2026, the Group’s term loan and revolving credit facilities are available in the UK.
The Group performs detailed, weekly, rolling 13-week cash flow forecasts to help manage its short-term
liquidity risk. Additionally, the Board monitors a monthly twelve-month Group cash flow forecast,
comparing it to internal targets and covenants and thresholds established with the Group’s lenders.
Carclo plc
Annual report and accounts 2026
continued
Notes to the consolidated financial statements
for the year ended 31 March 2026
Strategic report
Corporate governance
Financial statements
Additional information
134
26 Financial instruments
continued
Carclo plc
Annual report and accounts 2026
continued
Notes to the consolidated financial statements
for the year ended 31 March 2026
Strategic report
Corporate governance
Financial statements
Additional information
135
26 Financial instruments
continued
c) Liquidity risk
continued
The maturity of financial liabilities of the Group on an undiscounted cash flow basis at 31 March was as follows:
Trade | Bank | Term | Revolving credit | Lease | |||
payables | overdraft | loan | facility | Other loans | liabilities | Total | |
£000 | £000 | £000 | £000 | £000 | £000 | £000 | |
As at 31 March 2026 | |||||||
Within 1 year | 10,250 | — | 3,985 | 1,401 | 66 | 1,178 | 16,880 |
Within 1 to 2 years | — | — | 3,981 | — | 32 | 2,120 | 6,133 |
Within 2 to 5 years | — | — | 15,701 | — | — | 1,150 | 16,851 |
More than 5 years | — | — | — | — | — | 497 | 497 |
10,250 | — | 23,667 | 1,401 | 98 | 4,945 |
40,361
Trade | Bank | Term | Revolving credit | Lease | |||
payables | overdraft | loan | facility | Other loans | liabilities | Total | |
£000 | £000 | £000 | £000 | £000 | £000 | £000 | |
As at 31 March 2025 | |||||||
Within 1 year | 9,697 | 765 | 21,233 | — | 88 | 3,598 | 35,381 |
Within 1 to 2 years | — | — | — | — | 66 | 2,662 | 2,728 |
Within 2 to 5 years | — | — | — | — | 31 | 1,775 | 1,806 |
More than 5 years | — | — | — | — | — | — | — |
9,697 | 765 | 21,233 | — | 185 | 8,035 | 39,915 |
Carclo plc
Annual report and accounts 2026
continued
Notes to the consolidated financial statements
for the year ended 31 March 2026
Strategic report
Corporate governance
Financial statements
Additional information
136
26 Financial instruments
continued
d) Foreign currency risk
The Group has a number of overseas subsidiary operations. The major overseas subsidiaries are located in the United States, France, Czechia, China and India. As a result, the balance sheet of the Group can
be affected by the applicable conversion rates, the sterling/US dollar exchange rate in particular. It is the Group’s policy to hedge the effect of such structural currency exposures by having borrowings in the
appropriate currencies where it is considered efficient to do so. A loan of $9.0 million (2025: $13.3 million) is designated as the hedging instrument against foreign currency exposures in the net investment in the
trading subsidiaries in the United States. Under this hedge accounting, foreign exchange gains and losses on non-GBP loans are recognised, not in the income statement, but in other comprehensive income.
In addition, the Group is subject to transactional foreign currency exposures arising from the sale and purchase of goods and services in currency other than the Company’s local currency. Historically it has been
the Group’s policy to hedge such exposure by reviewing the forecasted exposure on a monthly basis where the net exposure in any one currency exceeds an estimated £50,000 for that month using forward
contracts. However, within the UK operations, opportunities have been exploited to naturally hedge inflows in currency with similar outflows. It is the Group’s policy not to undertake any speculative transactions.
The balance sheet exposure to currency at the year end arising from trading activities is illustrated in the following analysis by currency of the Group’s trade receivables and trade payables:
Sterling | US dollar | Euro | Other | Total | |
£000 | £000 | £000 | £000 | £000 | |
As at 31 March 2026 | |||||
Trade receivables, net of attributable impairment provisions (see note 17) | 6,416 | 4,809 | 1,483 | 1,710 | 14,418 |
Trade payables (see note 23) | (4,112) | (3,837) | (1,972) | (329) | (10,250) |
Net | 2,304 | 972 | (489) | 1,381 | 4,168 |
As at 31 March 2025 | |||||
Trade receivables, net of attributable impairment provisions (see note 17) | 4,800 | 2,794 | 1,955 | 1,026 | 10,575 |
Trade payables (see note 23) | (3,811) | (4,200) | (782) | (904) | (9,697) |
Net | 989 | (1,406) | 1,173 | 122 | 878 |
Carclo plc
Annual report and accounts 2026
continued
Notes to the consolidated financial statements
for the year ended 31 March 2026
Strategic report
Corporate governance
Financial statements
Additional information
137
26 Financial instruments
continued
d) Foreign currency risk
continued
The following table summarises the main exchange rates used during the year:
Reporting date |
||||
Average rate |
mid-market rate |
|||
2026 |
2025 |
2026 |
2025 |
|
Sterling/US dollar |
1.34 |
1.28 |
1.32 |
1.30 |
Sterling/euro |
1.15 |
1.19 |
1.45 |
1.20 |
Sterling/Czech koruna |
28.24 |
29.95 |
28.13 |
29.89 |
Sterling/Chinese yuan |
9.49 |
9.21 |
9.09 |
9.40 |
Sterling/Indian rupee |
118.88 |
108.05 |
123.75 |
110.67 |
The fair value is the amount at which a financial instrument could be exchanged in an arm’s length transaction between third parties. Where available, market values are used to determine fair values, otherwise
fair values are calculated by discounting expected cash flows at prevailing interest and exchange rates. The fair value of the derivatives and financial instruments was not materially different to the book value at
31 March 2026 and 31 March 2025. Unrecognised and deferred gains and losses in respect of derivatives and financial instruments at 31 March 2026 were insignificant.
Hedges of net investments in foreign operations
The Group has net investments in foreign operations in its subsidiaries in North America, France, Czechia, China and India.
A foreign currency exposure arises from the Group’s net investments in subsidiaries with foreign currencies i.e. functional currencies other than sterling. The risk arises from the fluctuations in spot exchange rates
between these foreign currencies and sterling (in particular the sterling/US dollar exchange rate), which causes the amount of the Group’s net investment to vary when translated into sterling.
Parts of the Group’s net investments in these overseas subsidiaries are hedged by foreign currency denominated, secured loans, as detailed in note 19. This mitigates the foreign currency risks arising from the
subsidiary’s net assets. The loan is designated as a hedging instrument for the changes in the value of the net investments that are attributable to changes in the spot exchange rates.
A summary of the Group’s hedges of net investments in foreign operations is as follows:
| 2026 |
2025 |
|||||
| Carrying amount |
Carrying amount |
|||||
Loans and |
Loans and |
|||||
borrowings |
Assets |
Liabilities |
borrowings |
Assets |
Liabilities |
|
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
|
US dollar |
5,765 |
30,773 |
(8,711) |
10,301 |
31,862 |
(11,022) |
Euro |
— |
3,103 |
(1,261) |
4,109 |
5,291 |
(1,258) |
Other currencies |
— |
24,226 |
5,791 |
— |
23,221 |
(6,108) |
To assess hedge effectiveness, the Group determines the economic relationship between the hedging instrument and the hedged item by comparing changes in the carrying amount of the debt that is attributable
to a change in the spot rate with changes in the investment in the foreign operation due to movements in the spot rate (the offset method). The Group’s policy is to hedge the net investment only to the extent of
the debt principal.
During the year a gain of £0.2 million (2025: £0.4 million gain) was recognised on these hedging instruments within other comprehensive income. During the year there has been no hedge ineffectiveness
26 Financial instruments
continued
d) Foreign currency risk
continued
In managing interest rate and currency risks the Group aims to reduce the impact of short-term
fluctuations on the Group’s earnings. Over the longer term, however, permanent changes in
foreign exchange and interest rates would have an impact on consolidated earnings. In the year ended
31 March 2026, it is estimated that a general increase of one percentage point in interest rates would
have decreased the Group’s profit before tax by approximately £0.3 million (2025: £0.2 million
decrease).
It is estimated that a general increase of 10% in the value of sterling against the above-noted main
currencies would have decreased the Group’s profit before tax by approximately £0.7 million for the
year ended 31 March 2026 (2025: £0.3 million decrease) which is detailed by currency in the following
table:
2026 |
2025 |
|
£000 |
£000 |
|
US dollar |
284 |
75 |
Euro |
124 |
85 |
Czech koruna |
75 |
84 |
Other |
248 |
193 |
731 |
437 |
The capital structure of the Group consists of net debt, comprising borrowings as detailed in note 19
offset by cash and cash deposits as detailed in note 18, and equity of the Group comprising issued share
capital, reserves and retained earnings as detailed in the statement of changes in equity.
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a
going concern in order to provide returns for shareholders and benefits for other stakeholders and to
maintain an appropriate capital structure. In order to maintain or adjust the capital structure, the Group
will take into account the amount of dividends paid to shareholders, the level of debt and the number
of shares in issue. Close control of deployment of capital is maintained by detailed management review
procedures for authorisation of significant capital commitments, such as land acquisition, capital
targets for local management and a system of internal interest charges, ensuring capital cost impact is
understood and considered by all management tiers.
Decisions regarding the balance of equity and borrowings, dividend policy and all major borrowing
2026 |
2025 |
|
£000 |
£000 |
|
Profit for the year |
2,695 |
872 |
Adjustments for: |
||
Pension scheme costs settled by the Scheme |
— |
192 |
Depreciation charge |
5,896 |
6,456 |
Amortisation charge |
107 |
87 |
Non-underlying rationalisation costs |
— |
(1,041) |
Non-underlying settlement of legacy claims |
— |
(1) |
Loss on disposal of other plant and equipment |
— |
2 |
Profit on disposal of intangible non-current assets |
(14) |
— |
Share-based payment charge |
61 |
32 |
Financial income |
(46) |
(571) |
Financial expense |
7,478 |
5,499 |
Taxation expense |
2,137 |
1,780 |
Operating cash flow before changes in working capital |
18,314 |
13,307 |
Changes in working capital |
||
(Increase)/decrease in inventories |
(1,099) |
1,310 |
Increase in contract assets |
(112) |
(93) |
(Increase)/decrease in trade and other receivables |
(2,434) |
2,269 |
(Increase)/decrease in trade and other payables |
(2,774) |
3,862 |
Decrease/(increase) in contract liabilities |
92 |
(1,317) |
Decrease/(increase) in provisions |
6 |
(272) |
Cash generated from operations |
11,993 |
19,066 |
Carclo plc
Annual report and accounts 2026
continued
Notes to the consolidated financial statements
for the year ended 31 March 2026
Strategic report
Corporate governance
Financial statements
Additional information
138
Carclo plc
Annual report and accounts 2026
continued
Notes to the consolidated financial statements
for the year ended 31 March 2026
Strategic report
Corporate governance
Financial statements
Additional information
139
2026 | 2025 | |
£000 | £000 | |
Contracted future capital expenditure | 385 | 49 |
Identity of related parties
During the year to 31 March 2026, the Group paid £0.6 million (2025: £0.7 million) to Thingtrax
Limited, a company that offers intelligent manufacturing infrastructure as a service; the cost has been
recognised in the income statement. Frank Doorenbosch, a Carclo plc Executive Director, is also a
Non-Executive Director of Thingtrax Limited and, as such, the company is identified as a related party.
There is no balance outstanding as at 31 March 2026 (FY25: £nil outstanding).
On 30 September 2025, Carclo plc settled a liability of £29,500 on behalf of Frank Doorenbosch,
Chief Executive Officer, in connection with the purchase of Carclo plc shares on market in his name.
The amount was repaid in full on 2 October 2025, together with interest and costs, with no loss to the
Company.
There have been no other changes to related parties in the year ended 31 March 2026.
Key management personnel are those persons having authority and responsibility for planning, directing
and controlling the activities of the Group. This includes all Executive and Non-Executive Directors and
other members of the senior management team who meet the above criteria. Total compensation for
key management personnel during the year was as follows:
2026 |
2025 |
|
£000 |
£000 |
|
Short-term benefits |
1,978 |
2,130 |
Share-based payments |
29 |
5 |
Total compensation |
2,007 |
2,135 |
The remuneration of the Directors of Carclo plc can be found in the Directors’ remuneration report on
Group pension scheme
A third-party professional firm is engaged to administer the Group’s UK defined benefit pension scheme
(the Carclo Group Pension Scheme). The associated investment costs are borne by the Scheme in full. It
has been agreed with the trustees of the pension Scheme that, under the terms of the recovery plan, the
Scheme would bear its own administration costs.
Contributions agreed with the trustees of the Group pension Scheme were £0.3 million per month
during the year to 31 March 2025 to incorporate both deficit recovery contributions and Scheme
expenses including the PPF levy. The monthly cost will remain the same in the year to 31 March 2027.
Carclo incurred Scheme administration costs of £0.6 million during the year which have been charged
to the consolidated income statement (2025: £1.0 million). Costs of £nil were incurred to manage the
plan’s assets (2025: £nil). The total of deficit reduction contributions and administration costs paid by
the Group during the year was £8.3 million (2025: £3.2 million), which included £5.1 million additional
contributions allowing securitised assets marked in favour of the Group pension Scheme to be
Carclo plc
Annual report and accounts 2026
continued
Notes to the consolidated financial statements
for the year ended 31 March 2026
Strategic report
Corporate governance
Financial statements
Additional information
140
The Group’s ultimate parent company is Carclo plc England.
The ordinary share capital of the subsidiary undertakings is owned by the Company except where indicated.
The Company and Group have the following investments in subsidiaries:
Registered | Principal place | Class of | 2026 | 2025 | ||
Company | office address | of business | Status | shares held | % | % |
Acre Mills (UK) Limited | 1 | UK | Dormant | Ordinary | 100 | 100 |
Arthur Lee & Sons (Hot Rolling Mills) Limited | 1 | UK | Dormant | Ordinary | 100 | 100 |
Australian Card Clothing Limited | 1 | UK | Dormant | Ordinary | 100 | 100 |
Bruntons Aero Products Limited | 1 | UK | Active | Ordinary | 100 | 100 |
Bruntons (Musselburgh) Limited | 2 | UK | Dormant | Ordinary | 100 | 100 |
Brymill Stockholders Limited | 1 | UK | Dormant | Ordinary | 100 | 100 |
Carclo Diagnostic Solutions Limited | 1 | UK | Dormant | Ordinary | 100 | 100 |
Carclo Group Services Limited | 1 | UK | Dormant | Ordinary | 100 | 100 |
Carclo Holding Corporation | One Nexus Way, Camana Bay, | Cayman Islands | Active | Ordinary | 100 | 100 |
Grand Cayman, KY1-9005 | ||||||
Carclo Holding Limited | 1 | UK | Dormant | Ordinary | 100 | 100 |
Carclo Investments Limited | 1 | UK | Dormant | Ordinary | 100 | 100 |
Carclo Overseas Holdings Limited | 1 | UK | Active | Ordinary | 100 | 100 |
Carclo Platt Nederland BV | 1 | UK | Active | Ordinary | 100 | 100 |
Carclo Technical Plastics Limited | 1 | UK | Active | Ordinary | 100 | 100 |
Carclo Technical Plastics Private Co. Limited | 27A (2) KIADB Industrial Area, | India | Active | Ordinary | 100 | 100 |
Doddabalapur, Bangalore - 561203, Karnataka | ||||||
Carclo Technical Plastics (Mitcham) Limited | 1 | UK | Dormant | Ordinary | 100 | 100 |
Carclo Technical Plastics (Slough) Limited | 1 | UK | Dormant | Ordinary | 100 | 100 |
Carclo Zephyr Limited | 1 | UK | Dormant | Ordinary | 100 | 100 |
CIT Technology Limited | 1 | UK | Dormant | Ordinary | 100 | 100 |
Critchley, Sharp & Tetlow Limited | 1 | UK | Dormant | Ordinary | 100 | 100 |
Crowther & Gee Limited | 1 | UK | Dormant | Ordinary | 100 | 100 |
CTP Davall Limited | 2 | UK | Dormant | Ordinary | 100 | 100 |
1.
Registered office address is: 47 Wates Way, Mitcham, Surrey, CR4 4HR .
2. Registered office address is: C/O Bruntons Aero Products, Units 1-3, Block 1, Inveresk Industrial Estate, Musselburgh, East Lothian, EH21 7PA.
Carclo plc
Annual report and accounts 2026
continued
Notes to the consolidated financial statements
for the year ended 31 March 2026
Strategic report
Corporate governance
Financial statements
Additional information
141
30 Group entities
continued
Investments in subsidiaries
continued
Registered | Principal place | Class of | 2026 | 2025 | ||
Company | office address | of business | Status | shares held | % | % |
CTP Lichfield Limited | 1 | UK | Dormant | Ordinary | 100 | 100 |
CTP Silleck Limited | 1 | UK | Dormant | Ordinary | 100 | 100 |
CTP Silleck Scotland Limited | 2 | UK | Dormant | Ordinary | 100 | 100 |
CTP White Knight Limited | 1 | UK | Dormant | Ordinary | 100 | 100 |
Dell Baler Limited | 1 | UK | Dormant | Ordinary | 100 | 100 |
Edwin Stead & Sons Limited | 1 | UK | Dormant | Ordinary | 100 | 100 |
Fairbank Brearley Limited | 1 | UK | Dormant | Ordinary | 100 | 100 |
Finespark (Horsham) Limited | 1 | UK | Dormant | Ordinary | 100 | 100 |
Highfield Mills Limited | 1 | UK | Dormant | Ordinary | 100 | 100 |
Hills Diecasting Company Limited | 1 | UK | Dormant | Ordinary | 100 | 100 |
Hills Non Ferrous Limited | 1 | UK | Dormant | Ordinary | 100 | 100 |
Horsfall & Bickham Limited | 1 | UK | Dormant | Ordinary | 100 | 100 |
Horsfall Card Clothing Limited | 1 | UK | Dormant | Ordinary | 100 | 100 |
Ironfoil Limited | 1 | UK | Dormant | Ordinary | 100 | 100 |
John Sharp (Wire) Limited | 1 | UK | Dormant | Ordinary | 100 | 100 |
J.W.& H. Platt Limited | 1 | UK | Dormant | Ordinary | 100 | 100 |
Lee of Sheffield Limited | 1 | UK | Dormant | Ordinary | 100 | 100 |
Lee Stainless Steel Services Limited | 1 | UK | Dormant | Ordinary | 100 | 100 |
Leeplas Limited | 1 | UK | Dormant | Ordinary | 100 | 100 |
Metallic Card Clothing Company Limited (The) | 1 | UK | Dormant | Ordinary | 100 | 100 |
Norseman (Cables & Extrusions) Limited | 1 | UK | Dormant | Ordinary | 100 | 100 |
Novoplex Limited | 1 | UK | Dormant | Ordinary | 100 | 100 |
Pratt, Levick and Company Limited | 1 | UK | Dormant | Ordinary | 100 | 100 |
Rumbold Securities Limited | 1 | UK | Dormant | Ordinary | 100 | 100 |
Seymour Plastics Limited | 1 | UK | Dormant | Ordinary | 100 | 100 |
Sheffield Wire Rope Company Limited (The) | 1 | UK | Dormant | Ordinary | 100 | 100 |
1.
Registered office address is: 47 Wates Way, Mitcham, Surrey, CR4 4HR.
2. Registered office address is: C/O Bruntons Aero Products, Units 1-3, Block 1, Inveresk Industrial Estate, Musselburgh, East Lothian, EH21 7PA.
Carclo plc
Annual report and accounts 2026
continued
Notes to the consolidated financial statements
for the year ended 31 March 2026
Strategic report
Corporate governance
Financial statements
Additional information
142
30 Group entities
continued
Investments in subsidiaries
continued
Registered | Principal place | Class of | 2026 | 2025 | ||
Company | office address | of business | Status | shares held | % | % |
Shepley Investments Limited | 1 | UK | Dormant | Ordinary | 100 | 100 |
Smith Wires Limited | 1 | UK | Dormant | Ordinary | 100 | 100 |
Station Road (UK) Limited | 1 | UK | Dormant | Ordinary | 100 | 100 |
Streamline Aerospace Limited | 1 | UK | Dormant | Ordinary | 100 | 100 |
Texture Rolled Limited | 1 | UK | Dormant | Ordinary | 100 | 100 |
Thomas White & Sons Limited | 2 | UK | Dormant | Ordinary | 100 | 100 |
Trubrite Limited | 1 | UK | Dormant | Ordinary | 100 | 100 |
Tru-Grit Limited | 1 | UK | Dormant | Ordinary | 100 | 100 |
Woodcock & Booth Limited | 1 | UK | Dormant | Ordinary | 100 | 100 |
Woodhead Limited | 1 | UK | Dormant | Ordinary | 100 | 100 |
Yorkshire Engineering Supplies Limited | 1 | UK | Dormant | Ordinary | 100 | 100 |
1.
Registered office address is: 47 Wates Way, Mitcham, Surrey, CR4 4HR.
2. Registered office address is: C/O Bruntons Aero Products, Units 1-3, Block 1, Inveresk Industrial Estate, Musselburgh, East Lothian, EH21 7PA.
Carclo plc
Annual report and accounts 2026
continued
Notes to the consolidated financial statements
for the year ended 31 March 2026
Strategic report
Corporate governance
Financial statements
Additional information
143
30 Group entities
continued
Group entities
Registered | Principal place | Class of | 2026 | 2025 | ||
Group | office address | of business | Status | shares held | % | % |
Apollo Steels Limited | 1 | UK | Dormant | Ordinary | 100 | 100 |
Carclo France SAS | 40 bis Avenue d’Orleans, 28000, Chartres | France | Active | Ordinary | 100 | 100 |
Carclo Securities Limited | 1 | UK | Dormant | Ordinary | 100 | 100 |
Carclo Technical Plastics (Brno) s.r.o | Turanka 98, 627000, Brno | Czechia | Active | Ordinary | 100 | 100 |
Carclo US Finance No. 2 | 1 | UK | Dormant | Ordinary | 100 | 100 |
Carclo US Holdings Inc | 600 Depot St. Latrobe, PA. 15650 | USA | Active | Ordinary | 100 | 100 |
Chapmans Springs Limited | 1 | UK | Dormant | Ordinary | 100 | 100 |
CTP Alan Limited | 1 | UK | Dormant | Ordinary | 100 | 100 |
CTP Carrera Inc | 600 Depot St. Latrobe, PA. 15650 | USA | Active | Ordinary | 100 | 100 |
CTP Moulded Gears Limited | 1 | UK | Dormant | Ordinary | 100 | 100 |
CTP Precision Tooling Limited | 1 | UK | Dormant | Ordinary | 100 | 100 |
CTP Taicang Co., Ltd | No. 8 Xixin Road, Chengxiang Town, Taicang | China | Active | Ordinary | 100 | 100 |
City, Jiangsu Province 215411 | ||||||
Datacall Limited | 1 | UK | Dormant | Ordinary | 100 | 100 |
D.B.T. (Motor Factors) Limited | 1 | UK | Dormant | Ordinary | 100 | 100 |
Douglas Campbell Limited | 2 | UK | Dormant | Ordinary | 100 | 100 |
European Card Clothing Company Limited | 1 | UK | Dormant | Ordinary | 100 | 100 |
Electro-Medical Limited | 1 | UK | Dormant | A1 ordinary | 64 | 64 |
& ordinary | ||||||
Finemoulds Limited | 1 | UK | Dormant | Ordinary | 100 | 100 |
Finespark (Singapore) PTE. Limited | One Raffles Place, #10-62, Tower 2 | Singapore | Member’s | Ordinary | ||
Voluntary | ||||||
Liquidation |
100
100
1.
Registered office address is: 47 Wates Way, Mitcham, Surrey, CR4 4HR.
2. Registered office address is: C/O Bruntons Aero Products, Units 1-3, Block 1, Inveresk Industrial Estate, Musselburgh, East Lothian, EH21 7PA.
Strategic report
Corporate governance
Financial statements
Additional information
Carclo plc
Annual report and accounts 2026
continued
Notes to the consolidated financial statements
for the year ended 31 March 2026
30 Group entities
continued
Group entities
continued
Registered |
Principal place |
Class of |
2026 |
2025 |
||
Group |
office address |
of business |
Status |
shares held |
% |
% |
Gilby-Brunton Limited |
2 |
UK |
Dormant |
Ordinary |
100 |
100 |
Industates Limited |
1 |
UK |
Dormant |
Ordinary |
100 |
100 |
Jacottet Industrie SAS |
40 bis Avenue d’Orleans, 28000, Chartres |
France |
Active |
Ordinary |
100 |
100 |
John Shaw Lifting & Testing Services Limited |
1 |
UK |
Dormant |
Ordinary |
100 |
100 |
Jonas Woodhead Limited |
1 |
UK |
Dormant |
Ordinary |
100 |
100 |
Jonas Woodhead (Manchester) Limited |
1 |
UK |
Dormant |
Ordinary |
100 |
100 |
Jonas Woodhead (Ossett) Limited |
1 |
UK |
Dormant |
Ordinary |
100 |
100 |
Jonas Woodhead (Sheffield) Limited |
1 |
UK |
Dormant |
Ordinary |
100 |
100 |
Jonas Woodhead & Sons Limited |
1 |
UK |
Dormant |
Ordinary |
100 |
100 |
K.A.S. Precision Engineering Limited |
1 |
UK |
Dormant |
Ordinary |
100 |
100 |
Platform Diagnostics Limited |
1 |
UK |
Dormant |
A1 ordinary |
64 |
64 |
Rumbold Investments Limited |
1 |
UK |
Dormant |
Ordinary |
100 |
100 |
Shepley Securities Limited |
1 |
UK |
Dormant |
Ordinary |
100 |
100 |
Sima Plastics Limited |
1 |
UK |
Dormant |
Ordinary |
100 |
100 |
Squires Steel Stockholders Limited |
1 |
UK |
Dormant |
Ordinary |
100 |
100 |
Sybro Limited |
1 |
UK |
Dormant |
Ordinary |
100 |
100 |
Toledo Woodhead Springs Limited |
1 |
UK |
Dormant |
Ordinary |
100 |
100 |
Tolwood Engineering Limited |
1 |
UK |
Dormant |
Ordinary |
100 |
100 |
Woodhead Components Limited |
1 |
UK |
Dormant |
Ordinary |
100 |
100 |
Woodhead Construction Services Limited |
1 |
UK |
Dormant |
Ordinary |
100 |
100 |
Woodhead Steel Limited |
1 |
UK |
Dormant |
Ordinary |
100 |
100 |
1.
Registered office address is: 47 Wates Way, Mitcham, Surrey, CR4 4HR.
144
Carclo plc
Annual report and accounts 2026
continued
Notes to the consolidated financial statements
for the year ended 31 March 2026
Strategic report
Corporate governance
Financial statements
Additional information
145
The Group is pursuing additional recoveries under certain insurance policies in respect of an insured
event. Management considers the receipt of further insurance proceeds to be probable. However, due
to the current status of discussions and claims assessment processes, the amount and timing of any
additional recovery cannot be estimated reliably at the reporting date. Accordingly, no asset has been
Carclo plc
Annual report and accounts 2026
Strategic report
Corporate governance
Financial statements
Additional information
146
as at 31 March 2026
2026 |
2025 |
||
Notes |
£000 |
£000 |
|
Non-current assets |
|||
Intangible assets |
C4 |
181 |
72 |
Property, plant and equipment |
C3 |
20 |
79 |
Investments in subsidiary undertakings |
C5 |
23,560 |
23,560 |
Debtors – amounts falling due after more than one year |
C6 |
— |
805 |
Deferred tax assets |
C10 |
283 |
283 |
24,044 |
24,799 |
||
Current assets |
|||
Debtors – amounts falling due within one year |
C6 |
33,560 |
40,530 |
Cash at bank and in hand |
118 |
1,468 |
|
33,678 |
41,998 |
||
Creditors – amounts falling due within one year |
|||
Trade and other creditors |
C8 |
(58,403) |
(135,197) |
(58,403) |
(135,197) |
||
Net current liabilities |
(24,725) |
(93,199) |
|
Total assets less current liabilities |
(681) |
(68,400) |
|
Creditors – amounts falling due after more than one year |
C8, C9 |
(41,909) |
(9,893) |
Carclo plc
Annual report and accounts 2026
continued
Company balance sheet
as at 31 March 2026
Strategic report
Corporate governance
Financial statements
Additional information
147
2026 | 2025 | ||
Notes | £000 | £000 | |
Net assets excluding pension liability | (42,590) | (78,293) | |
Pension liability | C11 | (46,785) | (51,743) |
Net liabilities | (89,375) | (130,036) | |
Capital and reserves | |||
Called-up share capital | 24 | 3,671 | 3,671 |
Share premium account | 7,359 | 7,359 | |
Profit and loss account | (100,405) | (141,066) | |
Shareholders’ deficit | (89,375) | (130,036) |
The Company reported a profit after tax for the year of £40.5 million (2025: loss of £9.0 million). Profit for the year includes dividend income of £52m relating to the waiving of an intercompany loan. For further
detail see note C8.
These accounts were approved by the Board of Directors on 30 June 2026 and were signed on its behalf by:
Frank Doorenbosch
Ian Tichias
Chief Executive Officer
Chief Financial Officer
Registered Number 00196249
Carclo plc
Annual report and accounts 2026
Company statement of changes in equity
for the year ended 31 March 2026
Strategic report
Corporate governance
Financial statements
Additional information
148
Share |
Share |
Profit and |
Total |
|
capital |
premium |
loss account |
equity |
|
£000 |
£000 |
£000 |
£000 |
|
Balance at 1 April 2024 |
3,671 |
7,359 |
(116,840) |
(105,810) |
Loss for the year |
— |
— |
(8,995) |
(8,995) |
Other comprehensive expense |
||||
Remeasurement losses on defined benefit scheme |
— |
— |
(15,253) |
(15,253) |
Taxation on items above |
— |
— |
— |
— |
Total comprehensive expense for the year |
— |
— |
(24,248) |
(24,248) |
Transactions with owners recorded directly in equity |
||||
Share-based payments |
— |
— |
22 |
22 |
Balance at 31 March and 1 April 2025 |
3,671 |
7,359 |
(141,066) |
(130,036) |
Profit for the year |
— |
— |
40,469 |
40,469 |
Other comprehensive expense |
||||
Remeasurement losses on defined benefit scheme |
— |
— |
51 |
51 |
Taxation on items above |
— |
— |
— |
— |
Total comprehensive income for the year |
— |
— |
40,520 |
40,520 |
Transactions with owners recorded directly in equity |
||||
Share-based payments |
— |
— |
61 |
61 |
Net investment hedge |
— |
— |
80 |
80 |
Balance at 31 March 2026 |
3,671 |
7,359 |
(100,405) |
(89,375) |
for the year ended 31 March 2026
Notes to the Company financial statements
The Group is subject to a number of key risks and uncertainties, as detailed in the principal risks and
uncertainties section on pages 42 to 48. Mitigating actions to address the risks are also set out in
that section of the report. These risks and uncertainties have been considered in the base case, and
downside sensitivities have been modelled accordingly. These sensitivities consider the uncertainties
facing the Group and model the impact of a range of severe but plausible downside scenarios, as well
as considering the impact of aggregating certain of these, and shows that the Group would be able to
operate within its available facilities and meet its agreed covenants were these scenarios to arise.
The specific climate-related matters set out in the TCFD section on pages 33 to 41 have been
considered and they are not expected to have a significant impact on the Group’s going concern.
The severe but plausible downside sensitivities modelled included reductions in forecast revenue of up
to 6.6%, a 4% increase in direct material costs (equivalent to approximately 2.2% contribution margin
erosion) and a 2% increase in interest rates. The downside scenario modelling assumes management
bonuses are not payable where the relevant performance conditions are not achieved but does not
include the benefit of any other mitigating actions available to management.
Under each of the standalone downside scenarios modelled, the Group maintains adequate liquidity
throughout the assessment period and remains compliant with all financial covenants. The Directors
also assessed a combined downside scenario incorporating both a significant reduction in forecast
revenue and a sustained increase in direct material costs. Under this combined scenario, no liquidity
shortfall arises; however, there is a temporary breach of the FCCR covenant. The Directors consider
the concurrent occurrence of these downside assumptions to be remote. Furthermore, the scenario
does not reflect a range of mitigating actions available to management, including the reduction of
discretionary expenditure and the deferral of non-essential capital expenditure. Modelling performed
by management demonstrates that actions considered achievable and within management’s control
would be sufficient to restore covenant compliance under this scenario.
Given that FCCR represented the most sensitive covenant within the Group’s financing arrangements,
the Directors performed additional covenant-focused downside testing, including scenarios in which
EBITDA remained broadly flat against FY26 levels and reduced by 10% compared with FY26. While
these scenarios resulted in reduced covenant headroom, management identified specific mitigating
actions that are considered achievable and within management’s control and which would be sufficient
to maintain compliance with the Group’s covenant requirements.
C1 Basis of preparation for the Company
Going concern
A £36 million asset-backed borrowing facility with BZ, that was announced on 24 April 2025, provides
available borrowings for a three-year term to April 2028. The level of borrowings is contingent upon
the value of current and non-current asset categories held by the Group’s UK and US trading subsidiaries.
There are three primary financial covenants required to be tested under the BZ facility agreement,
as follows:
Covenant
Definition
Threshold
Minimum EBITDA
Underlying
1
Group EBITDA calculated on a last six
months basis
No less than 75% of
budget
Fixed Charge Cover
Ratio (“FCCR”)
Underlying
1
Group EBITDA divided by the sum
of fixed charges comprising debt service costs,
debt repayments, pension scheme contributions,
tax payments, capital expenditure and dividends
or other capital distributions calculated on a last
twelve months basis
Until 31 March 2027
no less than 1:1
After 31 March 2027
no less than 1.05:1
CAPEX
Cash paid on tangible and intangible fixed assets
measured annually for the twelve months to
31 March
No more than 120%
of the annual budget
1.
See the glossary on page 167.
The Group remained compliant with the Minimum EBITDA and FCCR financial covenants throughout
the year ended 31 March 2026. In accordance with the facility agreement, these covenants were tested
monthly from May 2025 and, following twelve months of compliance under the agreement, including
compliance in the two preceding quarters, testing has moved to a quarterly basis. The CAPEX covenant
is tested annually from the start of each reporting period.
The Group has prepared a forecast of financial projections for the three-year period to 31 March 2029,
which has been utilised as the base case underpinning the going concern assessment for the period
through to June 2027, being 15 months after the year end and 12 months from when the financial
statements are authorised for issue. These projections include assumptions around revenue growth,
modest margin improvements, consistent working capital trends and stable interest rates. The Directors
have reviewed cash flow and covenant forecasts over this period considering the Group’s available
borrowing facilities and the terms of the arrangements with the Group’s lender and the UK defined
benefit pension scheme. The forecast shows adequate headroom and supports the position the Group
can operate within its available borrowing facilities and in compliance with covenants throughout this
period.
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
149
for the year ended 31 March 2026
Notes to the Company financial statements
continued
In these financial statements, the Company has applied the exemptions available under FRS 101 in
respect of the following disclosures:
•
cash flow statement and related notes;
•
comparative period reconciliations for share capital, tangible and intangible fixed assets;
•
disclosures in respect of transactions with wholly owned subsidiaries;
•
disclosures in respect of capital management;
•
the effects of new but not yet effective IFRSs;
•
an additional balance sheet for the beginning of the earliest comparative period following the
reclassification of items in the financial statements;
•
disclosures in respect of the compensation of key management personnel; and
•
disclosures of transactions with a management entity that provides key management personnel
services to the Company.
As the consolidated financial statements include the equivalent disclosures, the Company has also
taken the exemptions under FRS 101 available in respect of the following disclosures:
•
IFRS 2 Share-based Payments in respect of Group-settled share-based payments; and
•
certain disclosures required by IFRS 13 Fair Value Measurement and the disclosures required by
IFRS 7 Financial Instrument Disclosures.
The Company proposes to continue to adopt the reduced disclosure framework of FRS 101 in its next
financial statements.
The accounting policies set out below have, unless otherwise stated, been applied consistently to all
periods presented in these financial statements.
Judgements made by the Directors in the application of these accounting policies that have significant
effect on the financial statements, and estimates with a significant risk of material adjustment in the
next year, are discussed in note 47.
Certain new standards, amendments and interpretations to existing standards have been published that
are mandatory for the Company’s accounting period beginning on or after 1 April 2025. The following
amendment to standards is mandatory and has been adopted for the first time for the financial year
beginning 1 April 2025:
IAS 21 The Effects of Changes in Foreign Exchange Rates (Amendment): Lack of Exchangeability
(effective date 1 January 2025).
The amendment did not have a material impact on the Company’s financial statements.
a) Measurement convention
The financial statements are prepared on the historical cost basis except that the following assets and
liabilities are stated at their fair value: derivative financial instruments, financial instruments classified
as fair value through the profit or loss, liabilities for cash-settled share-based payments and defined
benefit pension plan assets.
C1 Basis of preparation for the Company
continued
Going concern
continued
The Group is not exposed to high-risk sectors or countries but is dependent on certain key customers,
creating risks and uncertainties, which are documented in detail alongside mitigating actions in the
principal risks and uncertainties section.
It should be noted that the Group is operating in a period of material geopolitical and macroeconomic
uncertainty. The Directors continue to monitor these risks and their plausible impact; however, the
potential severity is dependent upon many external factors and is difficult to predict.
Accordingly, the
financial impact of these risks may materially differ from the Directors’ current view.
At 31 March 2026, the Group reports net liabilities of £8.7 million (FY25: £11.8 million net liabilities)
largely attributable to the IAS 19 valuation of the UK defined benefit pension liability of £46.8 million
(FY25: £51.8 million).
Pension contributions are funded from cash generated by operations and have
been reflected in the cash flow and covenant forecasts reviewed by the Directors. Given that these
amounts are considered manageable by the Directors, the balance sheet presentation of net liabilities at
31 March 2026 does not imply an inability for the Group to meet its third-party liabilities over the going
concern period.
On the basis of the base case forecast and the severe but plausible sensitivity testing, the Directors
have determined that it is reasonable to assume that the Group will continue to operate within available
borrowing facilities available and adhere to the covenant tests to which it is subject throughout at least
the 12 month period from the date of signing the financial statements through to June 2027.
Accordingly, these financial statements are prepared on a going concern basis.
Accounting policies for the Company
The following accounting policies have been applied consistently in dealing with items which are
considered material in relation to the financial statements.
These financial statements were prepared in accordance with Financial Reporting Standard 101 Reduced
Disclosure Framework (“FRS 101”). There are no amendments to accounting standards, or IFRIC
interpretations, that are effective for the year ended 31 March 2026 which have had a material impact on
the Company.
In preparing these financial statements, the Company applies the recognition, measurement and
disclosure requirements of UK-adopted international accounting standards, but makes amendments
where necessary in order to comply with the Companies Act 2006 and has set out below where
advantage of the FRS 101 disclosure exemptions has been taken.
Under Section 408 of the Companies Act 2006 the Company is exempt from the requirement to
present its own profit and loss account.
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
150
for the year ended 31 March 2026
Notes to the Company financial statements
continued
Lease payments included in the measurement of the lease liability comprise the following:
•
fixed payments, including in-substance fixed payments;
•
variable lease payments that depend on an index or a rate, initially measured using the index or rate
as at the commencement date;
•
amounts expected to be payable under a residual value guarantee; and
•
the exercise price under a purchase option that the Company is reasonably certain to exercise, lease
payments in an optional renewal period if the Company is reasonably certain to exercise an extension
option, and penalties for early termination of a lease unless the Company is reasonably certain not to
terminate early.
The lease liability is measured at amortised cost using the effective interest method. It is remeasured
when there is a change in future lease payments arising from a change in an index or rate, if there is
a change in the Company’s estimate of the amount expected to be payable under a residual value
guarantee, if the Company changes its assessment of whether it will exercise a purchase, extension or
termination option, or if there is a revised in-substance fixed lease payment.
When the lease liability is remeasured in this way, a corresponding adjustment is made to the
carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the
right-of-use asset has been reduced to zero.
The Company presents right-of-use assets that do not meet the definition of investment property in
“tangible fixed assets” and lease liabilities in “trade and other creditors – amounts falling due in less than
one year” and “creditors – amounts falling due after more than one year” in the balance sheet.
Short-term leases and leases of low-value assets
The Company has elected not to recognise right-of-use assets and lease liabilities for leases of
low-value assets and short-term leases, including IT equipment. The Company recognises the lease
payments associated with these leases as an expense on a straight-line basis over the lease term.
c) Investments
Fixed asset investments are stated at cost less provision for impairment where appropriate.
The Directors consider annually whether a provision against the value of investments on an
individual basis is required. Such provisions are charged in the profit and loss account in the year.
d) Property, plant and equipment
Property, plant and equipment is stated at cost less accumulated depreciation and accumulated
impairment losses.
Where parts of an item of property, plant and equipment have different useful lives, they are accounted
for as separate items of property, plant and equipment.
Depreciation is charged to the profit and loss account on a straight-line basis over the estimated useful
lives of each part of an item of tangible fixed assets. Land is not depreciated. The estimated useful lives
are between three and twelve years.
Depreciation methods, useful lives and residual values are reviewed at each balance sheet date.
C1 Basis of preparation for the Company
continued
Accounting policies for the Company
continued
b) Leases
At inception of a contract, the Company assesses whether a contract is, or contains, a lease. A contract
is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a
period of time in exchange for consideration. To assess whether a contract conveys the right to control
the use of an identified asset, the Company uses the definition of a lease in IFRS 16.
As a lessee
At commencement or on modification of a contract that contains a lease component, the Company
allocates the consideration in the contract to each lease component on the basis of its relative
standalone prices. However, for the leases of property, the Company has elected not to separate
non-lease components and account for the lease and non-lease components as a single lease
component.
The Company recognises a right-of-use asset and a lease liability at the lease commencement date.
The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease
liability adjusted for any lease payments made at or before the commencement date, plus any initial
direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to
restore the underlying asset or the site on which it is located, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the
commencement date to the end of the lease term, unless the lease transfers ownership of the
underlying asset to the Company by the end of the lease term or the cost of the right-of-use asset
reflects that the Company will exercise a purchase option. In that case, the right-of-use asset will be
depreciated over the useful life of the underlying asset, which is determined on the same basis as those
of property and equipment. In addition, the right-of-use asset is periodically reduced by impairment
losses, if any, and adjusted for certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are not paid at
the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot
be readily determined, the Company’s incremental borrowing rate. Generally, the Company uses its
incremental borrowing rate as the discount rate.
The Company determines its incremental borrowing rate by obtaining interest rates from various
external financing sources and makes certain adjustments to reflect the terms of the lease and type of
the asset leased.
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
151
for the year ended 31 March 2026
Notes to the Company financial statements
continued
Remeasurements arising from defined benefit plans comprise actuarial gains and losses, the return
on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest). The
Company recognises them immediately in other comprehensive income and all other expenses related
to defined benefit plans in employee benefit expenses in profit or loss.
When the benefits of a plan are changed, or when a plan is curtailed, the portion of the changed benefit
related to past service by employees, or the gain or loss on curtailment, is recognised immediately in
profit or loss when the plan amendment or curtailment occurs.
The calculation of the defined benefit obligations is performed by a qualified actuary using the
projected unit credit method. When the calculation results in a benefit to the Company, the recognised
asset is limited to the present value of benefits available in the form of any future refunds from the plan
or reductions in future contributions and takes into account the adverse effect of any minimum funding
requirements.
The liability in respect of the defined benefit plan is the fair value of the plan assets less the present
value of the defined benefit obligation at the balance sheet date, together with adjustments for
actuarial gains and losses. Actuarial gains and losses that arise are recognised in full with the movement
recognised in the statement of comprehensive income.
The Company is the principal sponsoring employer of a UK-group defined benefit pension plan. As there
is no contractual agreement or stated Group policy for charging the net defined benefit cost of the
plan to participating entities, the net defined benefit cost of the pension plan is recognised fully by the
principal sponsoring employer, which is the Company.
g) Foreign currency
Transactions in foreign currencies are recorded using the rate of exchange ruling at the date of the
transaction or, if hedged forward, at the rate of exchange under the related forward currency contract.
Monetary assets and liabilities denominated in foreign currencies are translated using the contracted
rate or the rate of exchange ruling at the balance sheet date and the gains or losses on translation are
included in the profit and loss account.
h) Financial instruments
The Company uses derivative financial instruments to hedge its exposure to foreign exchange rate risks
arising from operational activities. In accordance with its treasury policy, the Company does not hold or
issue derivative financial instruments for trading purposes. However, derivatives that do not qualify for
hedge accounting are accounted for as trading instruments.
Derivative financial instruments are recognised initially at fair value. The gain or loss on remeasurement
of fair values is recognised immediately in the income statement. However, where derivatives qualify
for hedge accounting, recognition of any resultant gain or loss depends on the nature of the item being
hedged. At the year end no derivative financial instruments qualified for hedge accounting.
C1 Basis of preparation for the Company
continued
Accounting policies for the Company
continued
e) Taxation
Tax on the profit or loss for the year comprises current and deferred tax. Tax is recognised in the profit
and loss account except to the extent that it relates to items recognised directly in equity or other
comprehensive income, in which case it is recognised directly in equity or other comprehensive income.
Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using
tax rates enacted or substantively enacted at the balance sheet date, and any adjustment to tax payable
in respect of previous years.
Deferred tax is provided on temporary differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used for taxation purposes. The following
temporary differences are not provided for: the initial recognition of goodwill; the initial recognition
of assets or liabilities that affect neither accounting nor taxable profit other than in a business
combination; and differences relating to investments in subsidiaries to the extent that they will probably
not reverse in the foreseeable future. The amount of deferred tax provided is based on the expected
manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates
enacted or substantively enacted at the balance sheet date. A deferred tax asset is recognised only to
the extent that it is probable that future taxable profits will be available against which the temporary
difference can be utilised.
f) Employee benefits
Defined contribution plans
A defined contribution plan is a post-employment benefit plan under which the Company pays fixed
contributions into a separate entity and will have no legal or constructive obligation to pay further
amounts. Obligations for contributions to defined contribution pension plans are recognised as an
expense in the profit and loss account in the periods during which services are rendered by employees.
Defined benefit plans
A defined benefit plan is a post-employment benefit plan other than a defined contribution plan. The
Company’s net obligation in respect of defined benefit pension plans is calculated by estimating the
amount of future benefit that employees have earned in return for their service in the current and
prior periods; that benefit is discounted to determine its present value, and the fair values of any
plan assets (at bid price) are deducted. The Company determines the net interest on the net defined
benefit liability/asset for the period by applying the discount rate used to measure the defined benefit
obligation at the beginning of the annual period to the net defined benefit liability/asset.
The discount rate is the yield at the reporting date on bonds that have a credit rating of at least AA that
have maturity dates approximating the terms of the Company’s obligations and that are denominated in
the currency in which the benefits are expected to be paid.
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
152
for the year ended 31 March 2026
Notes to the Company financial statements
continued
C2 Personnel
The average number of employees in the year was 23 (2025: 21). All employees are based in the United
Kingdom and are employed by Carclo plc.
2026
£000
2025
£000
Wages and salaries
2,900
2,140
Social security contributions
282
218
Charge in respect of defined contribution pension plans
227
128
Share-based payments (see note 24)
109
28
3,518
2,514
C3 Property, plant and equipment
Plant and
equipment
£000
Total
£000
Cost
Balance at 31 March and 1 April 2025
325
325
Additions
4
4
Balance at 31 March 2026
329
329
Depreciation and impairment losses
Balance at 31 March and 1 April 2025
246
246
Depreciation charge
63
63
Disposals
—
—
Balance at 31 March 2026
309
309
Carrying amounts
At 31 March 2025
79
79
At 31 March 2026
20
20
C1 Basis of preparation for the Company
continued
Accounting policies for the Company
continued
i) Share-based payments
Share-based payment arrangements in which the Company receives goods or services as consideration
for its own equity instruments are accounted for as equity-settled share-based payment transactions,
regardless of how the equity instruments are obtained by the Company.
The grant date fair value of share-based payment awards granted to employees is recognised as an
employee expense, with a corresponding increase in equity, over the period in which the employees
become unconditionally entitled to the awards. The fair value of the awards granted is measured using
an option valuation model, taking into account the terms and conditions upon which the awards were
granted. The amount recognised as an expense is adjusted to reflect the actual number of awards for
which the related service and non-market vesting conditions are expected to be met, such that the
amount ultimately recognised as an expense is based on the number of awards that do meet the related
service and non-market performance conditions at the vesting date. For share-based payment awards
with non-vesting conditions, the grant date fair value of the share-based payment is measured to reflect
such conditions and there is no true-up for differences between expected and actual outcomes.
Share-based payment transactions in which the Company receives goods or services by incurring a
liability to transfer cash or other assets that is based on the price of the Company’s equity instruments
are accounted for as cash-settled share-based payments. The fair value of the amount payable to
employees is recognised as an expense, with a corresponding increase in liabilities, over the period in
which the employees become unconditionally entitled to payment. The liability is remeasured at each
balance sheet date and at settlement date. Any changes in the fair value of the liability are recognised as
personnel expense in profit or loss.
Further disclosure in relation to share-based payments is given in note 24 of the Group financial
statements.
j) Dividends
Dividends are only recognised as a liability to the extent that they are declared prior to the year end.
Unpaid dividends that do not meet these criteria are disclosed in the note to the financial statements.
k) Provisions
A provision is recognised in the balance sheet when the Company has a present legal or constructive
obligation as a result of a past event, that can be reliably measured and it is probable that an outflow of
economic benefits will be required to settle the obligation. Provisions are determined by discounting the
expected future cash flows at a pre-tax rate that reflects risks specific to the liability to the extent that
the effect of discounting is material.
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
153
for the year ended 31 March 2026
Notes to the Company financial statements
continued
C5 Investments in subsidiary undertakings
2026
£000
2025
£000
Cost
At 1 April 2025
150,117
150,117
At 31 March 2026
150,117
150,117
Provision for impairment
At 1 April 2025
126,557
126,557
At 31 March 2026
126,557
126,557
Net book value
At 31 March 2026
23,560
23,560
Value in use models are used to assess the recoverable amount of investments in the material trading
subsidiaries.
The value in use calculations use cash flow projections based upon financial budgets approved by
management covering a three-year period. Cash flows beyond the three-year period are extrapolated
using estimated growth rates of between 1.5% and 4% (31 March 2025: 0.6% and 4.5%) depending upon
the market served. The cash flows are discounted at a weighted average pre-tax rate of between 15.0%
and 20.4% (31 March 2025: 14.6% and 19.6%). The discount rates are calculated and reviewed annually
and are based on the Group’s weighted average cost of capital. Changes in income and expenditure are
based on expectations of future changes in the market.
The Directors are comfortable that there is sufficient headroom between recoverable amount and net
book value of all investments in subsidiary undertakings and that any reasonably possible changes to
key assumptions would not result in an impairment. As such, no impairment of investments has been
recognised in the year ended 31 March 2026.
A list of subsidiary undertakings is given in note 30 to the Group financial statements.
C4 Intangible fixed assets
Computer software
£000
Cost
Balance at 31 March and 1 April 2025
1,044
Additions
185
Balance at 31 March 2026
1,229
Amortisation and impairment losses
Balance at 31 March and 1 April 2025
972
Amortisation charge
76
Balance at 31 March 2026
1,048
Carrying amounts
At 31 March 2025
72
At 31 March 2026
181
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
154
for the year ended 31 March 2026
Notes to the Company financial statements
continued
C7 Provisions
2026
£000
2025
£000
Balance at 1 April
—
12
Provisions used in the year
—
(11)
Provision released in the year
—
(1)
Balance at 31 March
—
—
No provisions were required as at 31 March 2026.
C6 Debtors
2026
£000
2025
£000
Debtors – amounts falling due within one year:
Amounts owed by Group undertakings
32,399
38,869
Other debtors
134
193
Prepayments and accrued income
1,027
1,468
Balance at 31 March
33,560
40,530
Debtors – amounts falling due after more than one year:
Amounts owed by Group undertakings
—
211
Prepayment and accrued income
—
594
—
805
Amounts owed by Group undertakings which fall due within one year are primarily non-interest bearing
and repayable on demand.
In accordance with IFRS 9, the Company assesses the expected credit losses (“ECL”) on balances owed
by Group undertakings, including those repayable on demand. The Company applies the simplified
ECL approach, where ECL is minimal if the borrower can repay in full, or recovery is expected over time.
Receivables are written off when recovery is no longer expected, with write-offs derecognised under
IFRS 9 and any recoveries recognised in profit and loss.
Amounts owed by Group undertakings are presented after provision for credit risk.
Movements on the Company’s loss provision on amounts owed by Group undertakings were as follows:
2026
£000
2025
£000
At 1 April
—
7,376
Loss provision during the year
—
(7,376)
Balance at 31 March
—
—
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
155
for the year ended 31 March 2026
Notes to the Company financial statements
continued
C8 Trade and other creditors - amounts falling due within one year
2026
£000
2025
£000
Bank overdrafts
—
765
Trade creditors
630
950
Taxation and social security
111
99
Lease liabilities
7
59
Other creditors
3
—
Accruals and deferred income
2,354
2,788
Amounts owed to Group undertakings
51,840
109,277
Bank loans
3,458
21,233
Other loans
—
26
58,403
135,197
On 24 April 2025, the Group concluded the refinancing of its primary external borrowing facility
with a three-year multi-currency borrowing facility agreement with BZ Commercial Finance DAC
(“BZ”), comprising a term loan facility of £27.0 million and a revolving credit facility of £9.0 million. At
commencement, £29.9 million was borrowed under the BZ facility, of which £26.8 million was drawn
under the term loan and £3.1 million was drawn under the revolving credit facility. £21.3 million was
paid to discharge all amounts owing under the previous borrowing arrangement with HSBC, including
accrued interest, and £5.1 million of additional contributions were paid to the Group’s defined benefit
pension scheme, allowing securitised assets marked in favour of the pension scheme to be reassigned to
the new lender.
The BZ facility is an asset-based lending arrangement with drawings permitted against the value of
various classes of assets held by the UK and US businesses. Of the £27.0 million term loan element,
£8.0 million is designated against the value of owned land and buildings, £5.0 million is designated
against the value of owned plant and machinery and the balance of £14.0 million is designated as a cash
flow loan that is non-asset specific. Of the £9.0 million revolving credit facility, £7.0 million is designated
against the value of trade receivables and £2.0 million against the value of inventory.
The facility permits borrowings in GBP, EUR and USD. The named Group companies currently permitted
to borrow under the facility are Carclo plc, Carclo Technical Plastics Limited and Bruntons Aero
Products Limited. Group companies subject to cross guarantees under the BZ facility are the named
borrowing companies and material subsidiaries, as defined in the facility agreement.
Repayments on the term loan commenced in November 2025. At 31 March 2026, balances of the term
loan and the revolving credit facility were respectively: £23.7 million and £1 million.
Interest is calculated at SONIA, SOFR or €STR for loans denominated in GBP, USD or EUR respectively,
plus a margin of 4.5% for the receivables facility, 6.0% for the inventory, plant and machinery and
property facilities, and 7.5% for the cash flow facility. In addition, 2.0% is payable on the undrawn portion
of the £9.0 million revolving credit facility.
Amounts owed to Group undertakings which fall due within one year are non-interest bearing and
repayable on demand.
At 31 March 2025 the Company continued to recognise a £52 million intercompany liability to a
liquidated group company as there was insufficient evidence that the liability had been legally released.
Therefore the IFRS 9 derecognition criteria had not been met.
Since the 31 March 2025
reporting date, the group company has been reopened and a formal legal
waiver has been executed. The waiver provides legal release of the liability and, accordingly, the
£52 million balance has been derecognised as at 31 March 2026.
Although legally a loan waiver, the transaction is considered in substance to be an intercompany
distribution and the resulting £52 million credit has been recognised as dividend income in the Company
financial statements.
C9 Creditors - amounts falling due after more than one year
2026
£000
2025
£000
Bank loans
19,455
—
Other loans
—
2
Amounts owed to Group undertakings
22,451
9,884
Lease liabilities
3
7
41,909
9,893
Amounts owed to Group undertakings which fall due after more than one year bear interest at market
interest rates.
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
156
for the year ended 31 March 2026
Notes to the Company financial statements
continued
C10 Deferred tax assets and liabilities
Deferred tax assets and liabilities are attributable to the following:
Assets
Liabilities
Net
2026
£000
2025
£000
2026
£000
2025
£000
2026
£000
2025
£000
Tax losses
—
—
—
—
—
—
Revaluation of property
283
283
—
—
283
283
Deferred tax assets
283
283
—
—
283
283
No deferred tax assets or liabilities were recognised at the current or prior period balance sheet date.
Deferred tax assets have not been recognised in respect of the following items:
2026
£000
2025
£000
Tax losses – trading
5,896
5,375
Tax losses – capital
50
50
Tax losses – non-trading
548
363
Short-term timing differences
2,346
1,594
Employee benefits
11,947
12,936
Tangible fixed assets
145
144
20,932
20,462
Deferred tax assets have not been recognised on the balance sheet to the extent that the underlying timing differences are not expected to reverse in the foreseeable future. This situation is expected to continue
in the medium term. Capital losses will be recognised at the point when a transaction gives rise to an offsettable capital gain; this was not the case at 31 March 2026. Similarly, non-trading losses will only be utilised
against future non-trading profits. No such non-trading profits are foreseen at 31 March 2026.
The tax losses at 31 March 2026 are available to carry forward without time restriction.
There has been no change to the deferred tax asset during the year, or the prior year, as follows:
Balance at
1 April 2024
and 2025
£000
Recognised
in income
£000
Recognised
in other
comprehensive
income
£000
Balance at
31 March 2025
and 2026
£000
Revaluation of property
283
—
—
283
283
—
—
283
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
157
for the year ended 31 March 2026
Notes to the Company financial statements
continued
C16 Related parties
The Company has a related party relationship with its subsidiaries, set out in note 30, its Directors and
executive officers and the Group defined benefit pension scheme. There are no transactions that are
required to be disclosed in relation to the Group’s 64% dormant subsidiaries.
Transactions with related parties are set out in note 29 of the Group financial statements.
In addition to this:
•
interest payable to Group companies during the year was £1 million (2025: £0.9 million) and interest
receivable from Group companies during the year was £nil (2024: £nil);
•
royalties receivable from Group companies during the year was £1 million (2025: £1.2 million);
•
management fee income receivable from Group companies during the year was £1 million
(2025: £1.2 million); and
•
dividends were received from Group companies during the year totalling £0.6 million
(2025: £2.1 million).
Remuneration of the Directors, who are considered to be the key management personnel of the
Company, is disclosed in the audited part of the Directors’ remuneration report on pages 61 to 75.
C17 Accounting estimates and judgements
The preparation of the financial statements in conformity with FRS 101 requires management to make
judgements, estimates and assumptions that affect the application of policies and reported amounts of
assets and liabilities, income and expenses.
The estimates and assumptions are based on historical experience and various other factors that are
believed to be reasonable under the circumstances. These estimates and assumptions form the basis for
making judgements about the carrying values of assets and liabilities that are not readily apparent from
other sources. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the estimate is revised if the revision affects only that
period, or in the period of revision and future periods if the revision affects both current and future
periods.
The following are the critical judgements and key sources of estimation uncertainty that the Directors
have made in the process of applying the Company’s accounting policies and that have the most
significant effect on the amounts recognised in the financial statements. These should be read in
conjunction with the significant accounting policies provided in the notes to the financial statements.
C11 Pension liability
The Group operates a UK defined benefit pension scheme which provides pensions based on service
and final pay.
The Company was the sponsoring employer throughout the current and prior year and full disclosures in
respect of the Scheme are given in note 21 of the Group financial statements.
Additional security granted by the Company to the Scheme trustees as at 31 March 2025 for the gross
value of the Company’s assets (31 March 2025: of £66.4 million) was released in 2026 following the
payment of a £5.1 million lump sum payment.
C12 Reserves
The Company maintains an employee share ownership plan for the benefit of employees and which
can be used in conjunction with any of the Group’s share option schemes. As at 31 March 2026, the
plan held 3,077 of its own shares (31 March 2025: 3,077 shares). The original cost of these shares was
£0.003 million (31 March 2025: £0.003 million). The cost of the shares was charged against the profit
and loss account.
C13 Contingent liabilities
At 31 March 2026, the potential impact on the Carclo Group defined benefit scheme from the Virgin
Media ruling cannot be confirmed and/or measured with sufficient certainty, and therefore no provision
has been recognised. See note 21 of the Group financial statements for further information.
C14 Financial commitments
2026
£000
2025
£000
Contracted future capital expenditure
—
49
All of the above is in respect to intangible fixed assets.
C15 Profit and loss account
The Company profit after tax for the year amounts to £40.5 million (2025: £9.0 million loss). Profit for
the year includes dividend income of £52m relating to the waiving of an intercompany loan. For further
detail see note C8.
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
158
for the year ended 31 March 2026
Notes to the Company financial statements
continued
Classification and recoverability of amounts due from Group undertakings
Note C6 presents amounts due from Group undertakings falling due within one year and after more
than one year.
Key judgements
Management has applied judgement when classifying amounts due from Group undertakings. Those
presented as falling due within one year are primarily non-interest bearing and are repayable on
demand. Receivable balances with other Group entities are reviewed for potential impairment based on
the ability of the counterparty to meet its obligations.
Recognition of waiver of intercompany liability in respect of a liquidated
subsidiary
During the year the Company recognised income arising from the waiver of an intercompany balance
owed to a subsidiary undertaking.
Key judgements
Management exercised judgement in determining that, having regard to the substance of the
arrangement and the relationship between the parties, the resulting credit was appropriately
characterised as a distribution from a subsidiary rather than a gain arising on extinguishment of a
financial liability.
Recognition of deferred tax assets
Note C10 contains information about the deferred tax assets recognised in the statement of financial
position.
Key judgements
Management has exercised judgement over the level of future taxable profits in the UK against which
to relieve the Company’s deferred tax assets. On the basis of this judgement, except for £0.3 million
deferred tax asset recognised on historic property revaluations, which on consolidation in the Group
accounts is available to offset against a deferred tax liability of the same amount, £nil deferred tax
assets have been recognised at the year end (31 March 2025: £nil).
C17 Accounting estimates and judgements
continued
Going concern
Key judgements
Management has exercised judgement over the likelihood of the Company being able to continue to
operate within its available borrowing facilities and in accordance with related lender covenants for
at least 12 months from the date of signing these financial statements. Judgement has been applied
over forecast profit, debt levels and interest rates, particularly base rates. This determines whether the
Company should operate the going concern basis of preparation for these financial statements.
Defined benefit pension assumptions
Note 21 contains information about management’s estimate of the net liability for defined benefit
obligations and their risk factors. The pension liability at 31 March 2026 amounts to £46.8 million
(2025: £51.7 million).
Key sources of estimation uncertainty
The value of the defined benefit pension plan obligation is determined by long-term actuarial
assumptions. These assumptions include discount rates, inflation rates and mortality rates. Differences
arising from actual experience or future changes in assumptions will be reflected in the Group’s
consolidated statement of comprehensive income. The Group exercises judgement in determining
the assumptions to be adopted after discussion with a qualified actuary. Details of the key actuarial
assumptions used and of the sensitivity of these assumptions are included within note 21.
In the year to 31 March 2022 and the year to 31 March 2021, the Scheme introduced a right for
members to Pension Increase Exchange (“PIE”) and a Bridging Pension Option respectively. Having
taken actuarial advice, management exercised judgement that, for each, 40% of members would
take the options at retirement. There is no change to either assumption in the current year. Any
change in estimate would be recognised as remeasurement gains/(losses) through the statement of
comprehensive income.
Valuation of investments in material trading subsidiary undertakings
Note C5 contains information about management’s estimates of the recoverable amount of
investments in material trading subsidiary undertakings and their risk factors.
Key judgements
As set out in more detail in note C5, the recoverable amounts are based on value in use and fair value
less costs of disposal calculations. Management has exercised judgement over the cash flow projections
used in the value in use models, which are taken from the management-approved three-year plan. These
are a key factor in determining whether there is any impairment in these investments.
Key sources of estimation uncertainty
Cash flows used in the value in use model beyond the three-year plan are extrapolated using estimated
growth rates which vary depending on the market being served, and the cash flows are discounted at
country-specific discount rates which are calculated annually. These are key factors in determining
whether there is any impairment in these investments. The use of the fair value less costs to sell
method requires the estimation of the fair value of the investment in the subsidiary undertaking and of
associated costs of disposal.
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
159
Information for shareholders
Reconciliation of non-GAAP financial measures
a) Income statement measures
Continuing operations
Notes
2026
£000
2025
£000
Revenue
114,211
121,219
Profit after tax
2,695
872
Add back: income tax expense
10
2,137
1,780
Profit before tax
4,832
2,652
Add back: net financing charge
9
7,432
4,928
Operating profit
12,264
7,580
Add back: non-underlying items
8
336
2,258
Underlying operating profit
12,600
9,838
Return on Sales
11.0%
8.1%
Add back: depreciation and amortisation
13, 14
6,003
6,543
Underlying earnings before interest, tax, depreciation and amortisation (“EBITDA”)
18,603
16,381
Profit before tax
4,832
2,652
Add back: non-underlying items
8
336
2,258
Underlying profit before tax
5,168
4,910
Income tax expense
10
2,137
1,780
Add back: non-underlying tax expense
(9)
(10)
Group underlying tax expense
2,128
1,770
Group statutory effective tax rate
44.2%
67.1%
Group underlying effective tax rate
41.2%
36.0%
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
160
Information for shareholders
continued
Reconciliation of non-GAAP financial measures
continued
b) Net debt
Continuing operations
Notes
2026
£000
2025
£000
Cash at bank and in hand
18
5,769
10,745
Loans and borrowings – current
19
(7,568)
(24,844)
Loans and borrowings – non-current
19
(22,108)
(5,105)
Net debt
(23,907)
(19,204)
Underlying earnings before interest, tax, depreciation and amortisation (“EBITDA”)
18,603
16,381
Net debt to underlying EBITDA
1.29
1.17
c) Return on Capital Employed
Continuing operations
Notes
2026
£000
2025
£000
Underlying operating profit
12,600
9,838
Inventory
15
11,029
9,928
Contract assets
16
1,816
1,721
Trade and other receivables
17
18,887
16,253
Trade payables
23
(10,250)
(9,697)
Other payables
23
(7,705)
(11,094)
Contract liabilities
5
(1,737)
(1,624)
Provisions
22
(969)
(975)
Working capital
11,071
4,512
Property, plant and equipment
14
32,247
35,842
Capital employed
43,318
40,354
Return on Capital Employed (“ROCE”)
29.1%
24.4%
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
161
Information for shareholders
continued
Reconciliation of non-GAAP financial measures
continued
d) Cash conversion rate
Continuing operations
Notes
2026
£000
2025
£000
Cash generated from operations
27
11,993
19,600
Earnings before interest, tax, depreciation and amortisation (“EBITDA”)
18,267
14,123
Cash conversion rate
65.7%
138.8%
e) Fixed asset utilisation ratio
Continuing operations
Notes
2026
£000
2025
£000
Revenue
5
114,211
121,219
Property, plant and equipment
14
32,247
35,842
Fixed asset utilisation ratio
3.5
3.4
f) Constant currency
Revenue by segment
2026
2025
Statutory
£m
Statutory
£m
Impact of
exchange
movements
£m
Constant
currency
£m
Statutory
change
%
Constant
currency
change
%
CTP Division
Manufacturing Solutions
88,487
93,443
(2,402)
91,041
(5.3)%
(2.8)%
Design & Engineering
9,730
13,555
(335)
13,220
(28.2)%
(26.4)%
98,217
106,998
(2,737)
104,261
(8.2)%
(5.8)%
Speciality Division
15,994
14,221
139
14,360
12.5%
11.4%
114,211
121,219
(2,598)
118,621
(5.8)%
(3.7)%
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
162
Information for shareholders
continued
Reconciliation of non-GAAP financial measures
continued
f) Constant currency
continued
Underlying operating profit by segment
2026
2025
Statutory
£m
Statutory
£m
Impact of
exchange
movements
£m
Constant
currency
£m
Statutory
change
%
Constant
currency
change
%
CTP Division
15,101
12,328
(313)
12,015
22.5%
25.7%
Speciality Division
3,424
2,801
33
2,834
22.3%
20.8%
Central
(5,925)
(5,291)
(1)
(5,292)
12.0%
12.0%
12,600
9,838
(281)
9,557
28.1%
31.8%
A reconciliation between the Group’s loss to underlying profit used in the numerator used to calculate underlying earnings per share can be found in note 11.
Share price history and information
Share price history and information can be found on the internet at
carclo.co.uk
Further information on Carclo plc
Further information on Carclo plc can be found on the internet at
carclo.co.uk
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
163
Five-year summary
2026
£000
2025
£000
2024
£000
2023
£000
2022
£000
Group total:
Revenue
114,211
121,219
132,672
143,445
128,576
Underlying operating profit
1
12,600
9,838
6,557
5,849
6,006
COVID-19-related US government grant income
—
—
—
—
2,087
Operating profit before non-underlying items
12,600
9,838
6,557
5,849
8,093
Non-underlying (expense)/credit
(336)
(2,258)
(4,857)
(4,710)
721
Operating profit
12,264
7,580
1,700
1,139
8,814
Net financing charge
(7,432)
(4,928)
(5,587)
(3,749)
(2,989)
Profit/(loss) before tax
4,832
2,652
(3,887)
(2,610)
5,825
Income tax (expense)/credit
(2,137)
(1,780)
498
(1,437)
(809)
Profit/(loss) after tax but before loss on disposal of discontinued operations
2,695
872
(3,389)
(4,047)
5,016
Underlying operating profit
1
12,600
9,838
6,557
5,849
6,006
Add back: amortisation of intangible assets
107
87
163
211
203
Underlying earnings before interest, tax and amortisation (“EBITA”)
1
12,707
9,925
6,720
6,060
6,209
Add back: depreciation of property, plant and equipment
5,896
6,456
7,859
7,905
6,915
Underlying earnings before interest, tax, depreciation and amortisation (“EBITDA”)
1
18,603
16,381
14,579
13,965
13,124
1.
See glossary on page 167.
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
164
Five-year summary
continued
2026
£000
2025
£000
2024
£000
2023
£000
2022
£000
Continuing operations:
Revenue
114,211
121,219
132,672
143,445
128,576
Underlying operating profit
1
12,600
9,838
6,557
5,849
6,006
COVID-19-related US government grant income
—
—
—
—
2,087
Operating profit before exceptional items
12,600
9,838
6,557
5,849
8,093
Non-underlying (expense)/credit
(336)
(2,258)
(4,857)
(4,710)
721
Operating profit
12,264
7,580
1,700
1,139
8,814
Net financing charge
(7,432)
(4,928)
(5,587)
(3,749)
(2,989)
Profit/(loss) before tax
4,832
2,652
(3,887)
(2,610)
5,825
Income tax (expense)/credit
(2,137)
(1,780)
498
498
(457)
Profit/(loss) after tax but before loss on discontinued operations
2,695
872
(3,389)
(2,112)
5,368
1.
See glossary on page 167.
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
165
Five-year summary
continued
2026
£000
2025
£000
2024
£000
2023
£000
2022
£000
Group total:
Return on revenue (underlying operating profit margin)
1
11.0%
8.1%
4.9%
4.1%
4.7%
Return on revenue from continuing operations (underlying operating profit margin)
1
11.0%
8.1%
4.9%
4.1%
4.7%
Return on revenue (underlying EBITA margin)
11.1%
8.2%
5.1%
4.2%
4.8%
Return on revenue (underlying EBITA margin) from continuing operations
11.1%
8.2%
5.1%
4.2%
4.8%
Effective tax rate
44.2%
67.1%
12.8%
(55.1%)
13.9%
Underlying effective tax rate
1
41.2%
36.0%
25.2%
91.8%
26.4%
Earnings/(loss) per share
2
3.7p
1.2p
(4.6p)
(5.5p)
(7.8p)
Underlying earnings per share
3
4.1p
4.3p
1.0p
0.2p
3.0p
Net debt
(23,907)
(19,204)
(29,457)
(34,360)
(32,405)
Return on capital employed
4
29.1%
24.3%
13.1%
9.6%
9.5%
Capital expenditure as a multiple of depreciation
0.6x
0.4x
1.0x
0.7x
1.4x
Average number of employees in year
907
958
1,059
1,116
1,062
1.
Underlying is defined in the glossary on page 167.
2. Earnings/(loss) per share is calculated based on profit after tax, attributable to equity holders of the parent company, including discontinued operations and is after non-underlying and separately disclosed items.
3. Underlying earnings per share is calculated based on profit after tax, attributable to equity holders of the parent company, including discontinued operations and is before exceptional and separately disclosed items.
4. Underlying operating profit from continuing operations for the Group as a percentage of assets employed, defined as working capital plus tangible assets.
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
166
Glossary
Capital employed
Working capital and property, plant and equipment.
Cash conversion rate
Cash generated from operations divided by EBITDA.
Constant currency
Prior year income statement items translated at the average exchange rate of the current year.
EBIT and operating profit
Earnings, whether profit or loss, before interest and tax.
EBITDA
Earnings, whether profit or loss, before interest, tax, depreciation and amortisation.
Effective tax rate
Income tax (expense)/credit divided by the profit/(loss) before tax.
Fixed asset utilisation ratio
Trailing twelve month revenue divided by tangible fixed assets at the period end.
Group capital expenditure
Additions to intangible assets and property, plant and equipment.
IFR (Incident frequency rate)
Is used to measure workplace safety performance and is calculated by dividing the total
number of recordable incidents by the total hours worked and multiplying by 1,000,000.
Net debt
Cash and cash deposits less loans and borrowings.
Net debt to underlying EBITDA ratio
Net debt divided by underlying EBITDA.
Non-underlying
Transactions which fall within the ordinary activities of the Group that, by virtue of their size or
incidence, are considered to be non-underlying in nature.
ROCE
Return on Capital Employed, being trailing twelve month underlying operating profit as a percentage of
capital employed at the period end.
ROS
Return on Sales, being underlying operating profit as a percentage of revenue.
Trailing twelve months
The sum of income statement items over the preceding twelve-month period.
Underlying
Financial performance adjusted to exclude all non-underlying items. Underlying profit after tax is profit
after tax adjusted to exclude all non-underlying items and attributable tax on such items.
Working capital
Current and non-current inventory, contract assets and trade and other receivables less current and
non-current trade payables, other payables and provisions.
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
167
Company and shareholder information
Company Secretary
Ian Tichias
Registered number
Registered in England 196249
Registered office
47 Wates Way
Mitcham
Surrey
CR4 4HR
United Kingdom
Telephone: +44 (0) 20 8685 0500
Email: company.secretary@carclo-plc.com
Company website
carclo.co.uk
Registrars
Equiniti
Highdown House
Yeoman Way
Worthing
West Sussex
BN99 3HH
Auditor
HaysMac LLP
10 Queen Street Place
London
EC4R 1AG
Solicitors
Addleshaw Goddard LLP
3 Sovereign Square
Sovereign Street
Leeds
LS1 4ER
Bankers
HSBC UK Bank plc
1 Centenary Square
Birmingham
B1 1HQ
Corporate brokers
Panmure Liberum
25 Ropemaker Street
London
EC2Y 9LY
Lenders
BZ Private Credit Solutions
6th Floor
30 King Street
London
EC2V 8EH
Financial calendar
Annual General Meeting
9 September 2026
Interim results for half year ending 30 September 2026
November/December 2026
Preliminary results for year ending 31 March 2027
June/July 2027
Annual report for year ending 31 March 2027
Available July 2027
Annual General Meeting
August/September 2027
Financial statements
Additional information
Corporate governance
Strategic report
Carclo plc
Annual report and accounts 2026
168
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Registered office:
47 Wates Way
Mitcham
Surrey
CR4 4HR
T: +44 (0) 20 8685 0500
www.carclo-plc.com
investor.relations@carclo-plc.com
company.secretary@carclo-plc.com