Shares down 24% in wake of profit warning

Shares in castings group Chamberlin fell 24% in the wake of a profit warning caused by major production issues.

Investors took fright as the Walsall-based business said its problems with the start-up of its new machining facility would take longer to fix than it had expected.

Chamberlin said it is “actively pursuing” a claim against the supplier of the new machining cells and “expects to reach a satisfactory settlement”.

Keith Butler-Wheelhouse, chairman of Chamberlin, said: “We are working closely with the machine and tooling suppliers to resolve the technical problems that have had a significant impact on our foundry margins, however it is now clear that resolution of the technical problems is likely to take longer than expected. 
 
“As a result, cost inefficiencies, including the use of subcontractors and extended cycle times, will adversely affect the Group’s performance.”

It made a pre-tax loss of £810,000 in the six months to September – more than double the same period a year ago. That was despite a 22% increase in revenues, to £17.9m.