Foundry group Chamberlin forges ahead despite softening market
FOUNDRY group Chamberlin has said it remains confident of its full year performance despite worries about softening market conditions.
The Walsall-based firm said its optimism was backed by half year results which showed an increase in pre-tax profit despite a slight decline in revenues.
Revenue for the six months to September 30, 2012 slipped to £22.6m (2011: £23m) but underlying operating profit rose 11% to £934,000 (2011: £841,000) and underlying pre-tax profit was up 15% to £914,000 (2011: £797,000). Diluted underlying earnings per share improved by 9% to 8.1p (2011: 7.4p).
The firm produces complex castings for the turbocharger industry, which it said would continue to be an important area of focus for our business. Its Walsall foundry is a well-established supplier of bearing housings for both passenger car and commercial diesel turbochargers and it said major projects for two key customers, Borg Warner and IHI, were proceeding into production in line with expectations.
The non-foundry businesses was said to be continuing to make steady progress, with revenues in both operations higher than the same period last year.
Exidor continues to be the UK market leader in specialist emergency exit hardware and is said to be making good progress in the door closer market, especially into its export markets.
“Although certain sectors of this market are highly competitive, we are able to compete effectively in the premium part of the market,” said the group in its half year statement.
Petrel, its hazardous environments lighting business, was said to have established a strong record for technical competence in its market but this had not fully translated into revenue growth.
“We have recently appointed a new Managing Director to Petrel who brings a strong commercial track record to the business and we expect to see the benefits of this reflected in Petrel’s future performance,” it added.
The group said its strategy now was to concentrate management effort on increasing sales in the existing businesses to maximise capacity. This, together with the improved productivity, is expected to drive further increases in profitability.
In the short term it said there were a number of uncertainties to the general economic outlook for 2013, including slower growth rates in Europe and globally, and euro exchange rates. In this environment, technical expertise, operational excellence, sound management and a focus on customers were said to be critical to success.
Keith Butler-Wheelhouse, Chamberlin chairman, said: “I am pleased show continued improvement in profitability, with underlying profit before tax up 15% despite revenues slightly lower due to a softening in market conditions.
“We continue to work on improving operational processes and product profitability, and have also strengthened our commercial management in each of our foundries. There are a number of uncertainties to the general economic outlook in 2013 but the board believes that Chamberlin will respond well to the challenges and opportunities ahead.”
