11th Jun 2014 09:24
LONDON (Alliance News) - Iron castings and machining business Castings PLC Wednesday reported an increase in profit and revenue for the full year, despite being affected by new European Union laws governing truck-engine emissions.
West Midlands-based Castings, which makes parts for trucks, posted pretax profit of GBP21.8 million for the year ended March 31, up from GBP19.32 million a year earlier, as revenue rose 12% to GBP137.5 million from GBP122.2 million a year earlier.
The industry saw a surge in demand in the second half of 2013 ahead of new European Union laws on exhaust emissions that came into effect at the start of 2014.
The industry had expected the spike in demand for new trucks to wane after the new year once the new rules came into force, but Castings said in February that the decline from the exceptional level of demand it had seen toward the end of 2013 had not been as severe as the commercial vehicle market had anticipated.
Castings said Wednesday that the business has returned to more predictable levels of trading without "exceptional disruptions".
The company said its two reportable divisions - foundry production and CNC Speedwell Ltd - both performed well during the year.
Castings said its foundries at Brownhills and Dronfield enjoyed high levels of production during most of the year, as it invested GBP3.4 million to increase capacity for core production and finishing.
Additionally, CNC Speedwell, which is focused on the prismatic machining of iron and aluminium castings, saw an increase in sales. Castings invested GBP6.1 million on new machines and improved inspection equipment for the business.
Looking ahead, Castings said customer requirements have slightly reduced from the high levels achieved last year. However, it said several of its major customers have forecast that demand will increase during the third and fourth quarter of the current financial year.
The company plans to continue its investment in new machinery in the foundries and the machining operations and is in a "sound financial position" to react at short notice for any future investments required.
On the back of its performance the firm increased its final dividend to 9.83 pence from 9.36 pence a year earlier, making a total dividend of 12.96 pence compared with 12.34 pence.
Castings shares were down 1.0% at 490.27 pence Wednesday morning.
By Anthony Tshibangu; [email protected]; @AnthonyAllNews
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