Softening of demand impact H1 for engineering group Castings
A SOFTENING demand from its main customers has impacted first half performance for Walsall engineering group Castings.
In the six months ended September 30, 2016 sales dipped to £57.9m (H1 2015: £65m) and pre-tax profit was £7.08m (H1 2015: £9.51m).
Chairman Brian Cooke said the Brownhills firm had said at its AGM in August that it had seen the softening in demand and this had continued for the remainder of H1 resulting in lower foundry sales volumes than the previous six months.
However, he did say that revenue continued to benefit from a greater mix of more complex machined parts.
In addition, the machining business has seen a significant reduction in revenue following the end of a major contract.
“The introduction of replacement work remains on course for 2017/18 onwards, but the pre-production costs associated with this work is impacting the current financial year,” said Mr Cooke.
“Whilst we do not anticipate any significant further reductions in output, we do not expect to see any improvement for the remainder of the financial year.”
The company has recommended an interim dividend of 3.38p, which will be paid on January 3, 2017 to shareholders on the register at November 25, 2016.
The company has also said that following the retirement of current chief executive, David Gawthorpe at the end of the current financial year in March 2017, his position would be taken by Adam Vicary, current managing director of Castings Brownhills.
