Castings hit by decline in European truck market
HALF year revenue and profits have fallen for Brownhills-based Castings after the group’s foundries were hit by reduced orders.
Sales for the six months ended September 30, 2012 were £60.4m (2011: £64.0m) with pre-tax profit after exceptional items hitting £9.11m (2011: £10.13m).
In an interims results statement, the firm said: “The company enjoyed reasonable trading conditions up to the end of August. In September the foundries experienced a reduction in schedules from our main customer base.
“Since then we have seen further schedule and order reductions amounting in total to 20%. Our main customer base, the European truck manufacturers, are forecasting that orders will continue at around this lower level into 2013 while the economic situation is in such an uncertain state.”
The group’s CNC operation increased turnover and profits during the half year; mainly as a result of new business coming into production. However, it said CNC would now be affected by the general downturn in the truck business.
“It is somewhat strange that the UK is meant to have moved out of recession when Europe is in such turmoil and so many companies in engineering are seeing reductions in demand,” it added.
“The company will take the necessary action to maintain efficiency at lower levels of production in order to operate at a profitable level and generate good cash flows.”
An interim dividend of 2.98p per share has been declared and will be paid on January 4, 2013 to shareholders who are on the register at November 30, 2012.