Carclo (LSE:CAR) — 2024 AGM

0:00 Good morning, ladies and gentlemen, and welcome to the CARCLO PLC Annual General Meeting. Throughout this recorded meeting, attendees will be in listen only mode. Questions are encouraged and could be submitted at any time using the Q and A tab situated on the right hand corner of your screen. Please simply type in your questions at any time and press send. I'd now like to hand over to Joe Oatley. Good morning, Chairman. Good morning. Good morning, ladies and gentlemen. It's now 11:00. And as there are more than two members present in person or by proxy, I'd like to start today's proceedings and declare the twenty twenty four Annual General Meeting open.

0:31 By way of introduction, my name is Joe Oatley, Nile Executive Chair of CARCLO PLC. I'm pleased to welcome those who have made it here in person, thank you very much, and also those who have joined virtually via the Investor Meat Company platform. A couple of housekeeping items before we start. Please, can you make sure if you brought one of these, it's turned off or at least on silent and you're not using any device to record any part of the meeting. Secondly, as far as I'm aware, there's no planned fire alarm tests. So if the fire alarm does go off, we are indeed on fire and we should leave the building. Please turn right, head down the stairs and exit the building using the door directly in front of you. Evacuation assembly point is Hatfield Green Park. There will be some staff from the hotel on hand to assist us, I'm sure. The meeting today is being recorded so that shareholders and other stakeholders who can't be present can view it on the company's website in due course.

1:23 For those of you who have joined virtually via the Investor Meets Company platform, your microphones have been muted to avoid any unnecessary interruptions. Please note, if you joined via the platform, you are not able to vote. If you have any questions for the Board, you're able to submit these via the portal, and the Board will respond to key questions submitted at the end of the meeting. I'm joined here today by my fellow directors. I'd like to introduce them to you briefly before we start. We've got, on my left, Frank Durenbosch, the Chief Executive Officer and to his left, Natalie Cosmina, Non Executive Director and Chair of the Remuneration Committee and on my right, Eric Hutchinson, the CFO on screen. We also have Rachel Amy, Non Executive Director and Chair of the Audit and Risk Committee.

2:10 And I'd like to welcome Natalia to the First AGM. As we highlighted in our annual report, during the year ended March 2024, we faced a number of external challenges, including high inflation interest rates, supply chain disruptions and fluctuating raw material costs. However, FY 2024 allowed us to focus on building the strong foundation for our business, and we finished the year well with a strong final quarter. Turning to this year, the group's trading performance year to date has been in line with our expectations. Our rationalization and improvement plan in The U. S. Is on track, and we continue to reduce our net debt to underlying EBITDA ratio, all of which puts us in a stronger position for the years ahead. Can you raise the volume a little bit?

2:56 I can't, but I'm sure some of the men behind you can. Is that better? Can you hear that better? Okay. Is that better now? Is that better?

3:08 Yes? Okay. Perfect. We'll now move to the formal business of today's meeting, and we'll allow time for questions after this. The notice of the Annual General Meeting, together with the explanatory notes, was sent to shareholders on the August 2, and accordingly, the requisite notice of the meeting has been given. With your permission, I'd like to take the notice concerning the meeting as read. Okay, thank you. The notice of the meeting includes 14 items of business for your consideration. An explanation of each of them is included in the circular, but in summary, the first three resolutions involve the approval of the 2024 Annual Report on Accounts, the remuneration policy and the remuneration report. In accordance with best practice, Resolution numbers four to eight concern the re election of the directors.

3:56 We've provided additional information about the directors seeking re election on pages forty seven and forty eight of the annual report. And the remaining resolutions are the standard authorization resolutions relating to the reappointment of our auditors, the authorization to determine their remuneration, allotment of shares, the disapplication of preemption rights, purchase of owned shares and the holding of general meetings other than AGMs on shorter notice. I would now like to offer all shareholders, those appointed as proxies and any corporate representatives, the opportunity to ask questions about the resolutions being put forward today. Please, could you restrict your questions at this time just to questions about the resolutions? There will be time at the end of the meeting for more general questions about the company.

4:43 If you'd like to ask a question about any of the resolutions proposed at today's meeting, please raise your hand. Nobody. Thank you very much. No questions on that. Thank you very much. As there are no more questions, I shall now explain the poll voting procedure. As noted in the AGM circular, we will be inviting you to vote in a poll rather than a show of hands. I have appointed Aquiniti, the company's registrar, to act as scrutineers. Only shareholders, or their proxies, or corporate representatives are entitled to vote on the poll. On registration, you should have been given a poll card. You'll need the poll card to vote. If you wish to vote on the poll in more than one capacity, for example, if you're a shareholder in your own right and have also been appointed as someone else's proxy, you'll need a separate poll card for each capacity in which you vote. If you need a further poll card, please raise your hand and we will pass to you.

5:38 Good? Okay. Shareholders who are here today and who lodge proxies by 11AM on Tuesday this week will need not complete a poll card unless they wish to change their vote. If you've cast a proxy vote in advance and you decide to vote at the meeting, your votes at the meeting will supersede any proxy votes you may have already lodged. Many shareholders have already sent in a proxy, appointing me to vote on their behalf. I will vote as they have instructed me. If they have given me discretion as to how to vote, I should be voting in favor of the resolution concerned on their behalf. As mentioned earlier, shareholders who have joined the AGM online via the Investor Meat Company platform will not be able to vote online during the AGM. If you do not have a poll card, or you need additional poll cards or pen, please raise your hand now.

6:30 Now, turning to the poll process itself. When the poll procedure commences, you should complete your poll card in the places indicated by inserting the full name of the investor to shareholder and your name if voting as a proxy or corporate representative, across in one of the spaces marked for, against, or withheld in respect of each of the resolutions. Please note that a withheld vote is not a vote in law and will not be counted as a vote for or against a resolution. If your vote is not being cast entirely one way in respect of all your shares, you should enter the number of votes being cast alongside the separate crosses you insert for that resolution. If you're using the poll card to vote only some of the shares registered in the shareholders' name, but not all of them, you should enter the number of shares you're voting with the card.

7:18 If you have any questions or need any assistance with filling out your card, please speak to the representatives of the registrar who will be available at the end of the meeting. And the poll will remain open for ten minutes after I close the meeting. Any questions on the poll procedure? Excellent, thank you. As there are no more questions, I will formally put to the meeting each of the resolutions as set out in the notice of meeting and declare the voting open. Once you have completed your cards, please ensure you sign them and hand them to a representative of our registrar. The results of the poll will be determined by the registrar as scrutineer. As this will take a little while, the results of the will be announced to the London Stock Exchange and published on our website as soon as recently practicable. We're now happy to take any questions of a more general nature, including those submitted via the Investor Meets Company platform.

8:12 So any questions from the floor?

8:16 Just if you hold on one second, we'll get a microphone to you. Are you going to produce progress report at all to the press or today? Yes. So there was a release first thing this morning, seven a. M. This morning. So we put out a brief trading update, which essentially I summarized when I gave the couple of sentences where I said trading so far this year has been in line with our expectations. The rationalization and improvement program in The U. S. Is tracking to plan.

8:51 And we are still continuing to improve our net debt to underlying EBITDA ratio. That summarized a rather longer trading statement, but there was a The market obviously liked it because the shares went up by 11% this first thing this morning. Yes, they did. I mean, how how the market reacted just to them? From a I should say I'm guilty of contributing towards the the creation of this company many years ago in 1968 when I was working for a merchant bank, I suggested merging English card clothing with card clothing and belting, and the result is this. Because after I left the bank, they've done everything I suggested. They bought control of CARCLO, and they bought English CARCLO PLC.

9:36 So I've got a long history of I mean, I I spent days looking at all the properties of both companies, and all these properties disappeared. I don't know what happened to it doesn't seem to reflect on the balance sheet. The the Well, we could let let's let's pick that up perhaps afterwards over a over a cup of tea. Your time. Yeah. Probably you probably wasn't even born when I when I when I made my report. That's very kind of you to say that. Yeah.

10:04 The other thing I must say I I I forgot. I own the initials, really. But I I now I quickly looked and they they they went right down early on the year. Now they're now they're the peak of the year. So the capitalization is still tiny, tiny, tiny. So the company is is so very small. Has the board considered a reverse takeover bid perhaps of a private company who wants to get a quotation on the market through a reverse take of a bid of this company. I mean, I I think the honest answer is the the management of the company is focused on running the company and doing our very best job to to to deliver earnings growth, which delivers value for shareholders.

10:54 But how are you going to grow? Because you're so tiny for a public company. Well, the best job we can do is to run the company to the best of our ability, win new customers, deliver better margins, deliver better returns and grow the earnings, which is exactly what the management team is delivering. So what is the main product of the company? What exactly does the company do now? It's not making CARCLOOD like it used It's not making CARCLOOD like it Frank, would you like to take just a brief answer to what we do today? Yes. So we make

11:31 precision components for mainly life science, precision tech, aerospace and optics businesses. And we deliver precision products which are assembled, put together. And so mainly, it's injection molding and plastics is the main components. And the added value we deliver is to assemble those products for our customers and create supply chain solutions. Also, you used to to cater for the model trade at one time? Yes. We we did. We we don't do that anymore as as a main business. We have some things on the site in our Optics business for aftermarket lighting. But the big part of our business and the growth what we're seeing and the focus is on life science, precision technology products and aerospace.

12:21 Could I just I think we have another question over here. Born, Private Shareholder. Just inquiring, what is the latest use on the pension fund? Because that's always an issue which comes up with most AGMs, please. Just before you give the microphone back, are there specifics you want to know about in In terms of the pension terms of the to approve it, I suppose, is the big question. Eric, would you like to take that? And obviously, there's Yeah. So I have to be very careful because the pension fund is going through its three year revaluation as at thirty first of March this year, twenty four. So the latest public information is based upon the '21 valuation, and there was a net deficit of £82,700,000.

13:12 All of the indications running through on the regular quarterly updates we get from pension trustees and the actuary indicate that, that position is improving. So I'm expecting to see an improved lower net deficit once this valuation process is completed, but I haven't been given any official numbers. What date? Normally, these processes with actuaries take up to nearly twelve months to finalize. So we're about a few months into that at the moment. About halfway through. I will try to accelerate the process as much as I can, because I think it's material information for shareholders.

14:01 All I can assure you is that all of the indications are that the net deficit is reducing. Thank you. Can I just check with the guys at the back of the room that on my little screen here, it's telling me we haven't got any online questions? Want to make sure mine's working. I'm not missing anything. Okay. That's correct. And anything else from anybody in the room? I said we'll be outside afterwards, okay? In that case, I'd like to thank everyone for attending today's meeting. Wish those of you who've traveled here a safe journey home. And thank you to everyone who's joined via the Investor Meet company platform. That concludes the meeting. I declare CARCLO's twenty twenty four Annual General Meeting closed.

14:47 I do believe we have tea and coffee and even maybe some biscuits. Maybe outside. So if you've traveled here, please join us outside. Thank you very much indeed. Can you please ask attendees online not to close the session as we're now automatically redirect you for your feedback. Good good morning to you all.