LONDON (Alliance News) - Iron castings and machining group Castings PLC on Friday reported a fall in pretax profit and lower revenue for the first half of its financial year, hit by softening demand from customers.
Castings reported pretax profit of GBP7.0 million in the half-year to the end of September, down 26% from the GBP9.5 million it reported a year prior.
The profit decline was driven by revenue declining to GBP57.9 million from GBP65.0 million, due to lower foundry sales volumes only partially offset by solid sales of more complex machined parts.
The machining business was hit, however, by the loss of a large contract, as Castings had previously flagged. The introduction of new work to replace that contract is ongoing, but the pre-production costs associated with preparing for this new work is weighing on profit.
The company declared an interim dividend of 3.38 pence per share, flat year-on-year.
Castings said it does not anticipate further output declines, but equally does not anticipate any improvement in the remainder of its financial year to the end of March 2017.
Castings said Chief Executive David Gawthorpe will retire at the end of its current financial year. In line with the group's succession planning, Adam Vicary, currently managing director of the Castings Brownhills unit, will become CEO on Gawthorpe's departure.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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Castings (CGS)