Foundry group bullish despite decision to close one of its factories
A WALSALL-based foundry business has announced the closure of an operation in the East Midlands after incurring a near £400,000 first half loss.
Chamberlin announced a statutory post-tax loss of £391,000 in the first half (2015: loss of £367,000) – prompting the decision to close the factory in Leicester, which it said was the least specialised of its three foundries.
Overall, the firm said results for the first half were in line with management expectations and the group remained on track to achieve market expectations for the full year.
Revenues for H1 were £16.4m (2015: £18.0m), with an underlying pre-tax profit of £8,000 (H1 2015: £57,000).
Chamberlin chairman, Keith Butler-Wheelhouse said: “Results for the first half are in line with management expectations and reflect the anticipated picture across our foundry activities.
“We recently took the difficult decision to close our non-core foundry at Leicester, the least specialised of the group’s three foundries, which has been suffering from reducing demand.
“We are now close to completing our initial investment in new machining capability at Walsall, which is opening up additional opportunities and underlines Walsall’s ability to deliver a world class product at a globally competitive cost.”
The firm said the investment of £3.8m would support ongoing capacity improvements at its flagship foundry in Walsall and ultimately generate incremental sales from January 2017.
New contracts won for the Walsall foundry are set to begin production.
“We expect the Walsall foundry to continue to make further progress, supported by our investment in new machining capability, and view prospects very positively. Revenues from the group’s engineering operations are growing as we focus on the technical development of our product and exports,” added Mr Butler-Wheelhouse.
The Leicester factory is expected to close by the end of the year. The group said the closure was not expected to impact pre-tax profit forecasts.
