4th Jun 2019 11:44
LONDON (Alliance News) - Chamberlin PLC on Tuesday said it expects its performance to improve in its recently commenced financial year after reporting a widened loss in the year to March 31 due to increased costs.
The stock was down 20% in midday trade at 33.50 pence a share.
The engineering company said its pretax loss was GBP5.0 million in its most recently ended financial year, widened from GBP1.1 million the year prior. Operating expenses jumped to GBP8.2 million from GBP5.3 million, due to an impairment charge of GBP3.0 million against some of Chamberlin's foundry fixed assets.
More positively, revenue rose 9.3% to GBP33.0 million from GBP30.2 million year-on-year
By division, Foundry revenue increased by 11% year-on-year, benefiting from a full year contribution from Chamberlin's machining facility. Sales slowed in the second half, however, due to the tightening demand in the European turbocharger market, the company explained.
Chamberlin operates two foundries. Walsall is Chamberlin's main operation - producing small castings, typically below 3 kilogrammes in weigh - and drives the majority of the Foundry division's sales. Meanwhile, the Scunthorpe foundry specialises in heavy castings weighing up to 6,000 kilogrammes.
In the Engineering division, revenue decreased by 3.8% year-on-year, mainly due to concerns about Brexit among Chamberlin's customers, it said.
Looking to the new financial year, Chamberlin said near-term lower volumes from the automotive market will result in lower revenue. The company will focus on reducing costs to match the lower level of output and on improving margins, in addition to developing opportunities for revenue growth.
"Although revenue is expected to reduce, we are positioning Chamberlin to deliver an improved operating financial performance in the 2020 financial year," said Chair Keith Butler-Wheelhouse.
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