Foundry group’s shares hit as it warns on tough trading
Shares in castings and engineering group Chamberlin fell significantly yesterday after the company warned that trading conditions have toughened.
Updating the stock market, the company said market conditions had deteriorated, leading to expectations of a full-year loss despite cost cutting measures being introduced.
The news led to its shares trading 17% lower at 56.36 pence.
Chamberlin said that while its sale of Exidor, a supplier of specialist emergency exit hardware and door furniture, for £10m in December, had
strengthened its balance sheet, current trading conditions had “toughened”.
It said customer schedules for the European turbocharger market have suffered significant reductions, partly related to the disturbance to production schedules resulting from the new Worldwide Harmonised Light Vehicle Test Procedure (WLTP) emissions testing regime.
There are also uncertainties relating to Brexit, the company said, while its Petrel specialist lighting business has experienced a slowdown.
“In response to the change in trading conditions, the board has implemented a number of cost reduction measures and also completed a reassessment of the likely outturn in the second half of the current financial year. It now anticipates that the loss in this period will be similar to that in the first half. The benefits of the cost reduction measures will be seen in the next financial year to 31 March 2020,” Chamberlin said.
The firm now expects its operating loss from continuing operations to be “similar” to the £300,000 reported in the first half of the year.