Iron castings and machining group Castings PLC said Wednesday it saw profit and revenue fall in its recently-ended financial year, as the company invests in automation to improve productivity.
Castings reported a pretax profit of GBP15.9 million for its financial year ended March 31, dropping from GP19.7 million the prior year. Revenue was also down to GBP118.8 million from GBP132.4 million.
Profit in its Foundry division dipped to GBP14.5 million from GBP14.7 million, although a fall in sales was offset by an increase in return on sales to 11.3% from 10.9%.
Castings said customer requirements for the segment are forecast to remain steady at current levels, with its focus on continuing productivity, particularly via automation.
The Machining division saw a substantial drop in profit to GBP1.5 million from GBP4.7 million, as sales fell to GBP23.3 million from GBP33.2 million.
The company noted a significant reduction in sales at its CNC Speedwell subsidiary in the West Midlands, which provides components to the automotive industry. Castings said this was due to the ending of a major contract, but replacement work has been secured and investment in new machines at the site has been made.
A total of GBP5.1 million has been invested in the division to accommodate new orders, many of which have not come into full production, said Castings.
Despite the profit fall, Castings recommended a final dividend per share of 10.59 pence, up from 10.33p the prior year. This increases its total ordinary dividend per share for the year to 13.97p from 13.71p the prior year.
Castings noted that as previously announced, former Chief Executive David Gawthorpe retired from the company at the end of March. He was replaced as CEO by Adam Vicary, former managing director of the company's Brownhills foundry.
"The situation concerning Brexit is creating a certain amount of concern in the manufacturing sector and the sooner the government negotiates a deal to remove this uncertainty the better it will be for planning the future," said Chairman Brian Cooke.
"The company is putting every effort into developing new work with both existing and new customers. Our focus is on core business that can be produced and machined within the group. At the same time we are continuing to invest in technology to improve productivity and profitability," added Cooke.
Shares in Castings were down 3.2% at 453.75p Wednesday.
Source: lse.co.uk
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