Carclo Plc 's share price dropped by more than tenth on Friday despite the precision manufacturing company maintaining its full-year forecasts and delivering a bullish outlook, as it reported lower revenues in the first half.
The company, which operates in a range of sectors from aerospace and optics to technology and life sciences, said revenues were £57.2m over the six months to 30 September, down 6.1% from the year before.
The CTP division reported an 8.7% year-on-year fall in revenues to £49.3m, which it blamed on foreign exchange headwinds and the impact of non-core site closures in the US last year.
However, the Speciality division increased sales by 14.1% to £8.0m, helped by robust demand in aerospace and a return to growth for light and motion services.
Despite the weaker top line, underlying return on sales improved to 9.6% from 5.6%, driven by "enhanced machine utilisation and rigorous cost control measures", the company said. This led to a 61.2% jump in underlying operating profit to £5.5m and a baseline pre-tax profit of £1.5m, up from a £0.1m loss previously.
Looking ahead, Carclo said it's expectations for the full year remain unchanged, with "positive momentum" continuing in the second half.
The firm, which currently doesn't pay a dividend, said that "prioritising investment to enable profitable growth for the business is currently the most appropriate use of capital".
The stock was down 11.4% at 62.41p by 1108 GMT.