Profit warning issued by castings group after European caution

Castings has issued a profit warning as it anticipates demand for commercial vehicles to not resurge until early next year.

Around 80% of revenue for the Walsall iron castings manufacturer comes from commercial vehicle customers and is being impacted by the caution in buying decisions, particularly in Europe.

It now expects its results to 31 March 2025 to be below market expectations. 

Castings had acquired the fixed assets and stock of Russell Ductile Castings (RDC) from the administrators of Chamberlin for £400k in June.

RDC was an iron foundry serving the capital goods and energy market, with some overlap in products with Castings.

It ceased production in May 2024 when administrators were appointed. Chamberlin and RDC employed 129 staff across its operations in Walsall and Scunthorpe when it appointed administrators at FRP.

Castings says the vast majority of the former customer base has been retained.

The expected cost of the new foundry production line being installed at the Dronfield site in Derbyshire remains in line with budget and is still expected to be complete in early summer 2025.

The new £17m line at its William Lee site in Dronfield will be funded from internal resources and add up to 12,000 tonnes of foundry capacity.

It was hoped the additional facility will enable Castings to meet the demand for its heavy truck parts and take advantage of new market areas such as truck electrification, wind energy and further opportunities in the US.

It currently is unable to meet both current and forecasted demand and has had to outsource some production to other foundries for the short term.

William Lee was acquired by Castings in 1991 and produces parts for nearly every truck manufacturer including Scania, Volvo and Daimler. Currently employing 400 staff, the firm produces more than 25,000 castings daily to be shipped worldwide.