Foundry group disappoints investors after losses widen
Walsall foundry group Chamberlin disappointed investors by announcing a widening of full year losses.
There had been major fluctuations in the group’s share price prior to the release of its full year results and the firm closed more than 11% down – although this was a recovery from an earlier decline of 19.5%.
Revenues for the year to March 31, 2017 increased 10% to £32.1m (2016: £29.1m), with growth coming from new, cast-only, work at the group’s main Walsall foundry. There was also an increased market share from its two engineering businesses.
This offset the loss of an industrial vehicle contract at its Scunthorpe facility. Revenues from the new machining facility, which opened in early 2017, made only a marginal contribution, as expected.
Underlying pre-tax profit increased to £0.6m (2016: £0.2m) and diluted underlying profit per share more than tripled to 4.5p (2016: 1.4p).
However, on an IFRS basis, after accounting for restructuring costs of £0.1m (2016: £0.1m), administration and costs of the closed pension scheme of £0.4m (2016: £0.4m) and impairment from the closure of its non-core foundry in Leicester of £1.5m (2016: £nil), the group generated a loss of £1m (2016: loss of £0.3m). Diluted loss per share was 12.2p (2016: loss per share of 3.3p).
The net debt position at year-end was £6.8m (2016: £3.2m), which the group said reflected its investment in the new machining facility.
In line with its current dividend policy, the directors did not propose the payment of a dividend for the period under review, just as it had last year.
Chairman, Keith Butler-Wheelhouse, said: “Chamberlin made important strategic and operational progress over the year, which will help to support a significant new phase of growth.
“We have further developed Chamberlin’s product offering with a significant investment in a machining facility in Walsall. Opened in the final quarter of the financial year, it improves our competitive positioning and will support further growth over the new financial year. It also underlines our ability to deliver a world class product at a globally competitive cost.
“The group remains well placed for further progress over the new financial year, supported by major new contracts.”
