Last checked at 4 Oct 2021 07:00
Castings PLC
Trading Update and Notice of Results
Castings PLC announces a trading update in respect of the six months ended 30 September 2021.
The underlying demand for heavy trucks (70% of group revenue) remains very strong and this is reflected in the forward schedules that our OEM customers are providing. However, the current conversion rate of forward schedules to actual sales is significantly below what we would normally expect; raw material shortages (particularly in respect of semiconductors) are preventing the OEMs building trucks at the rate required to satisfy the high demand. In recent weeks, OEMs have reacted at relatively short notice by operating reduced shifts and even closing facilities.
As a result of the above, group revenue and profits have been negatively impacted in the second quarter of the financial year. With the limited information which is available from our customers, it is not possible to forecast when the supply chain restrictions will ease and allow the high forward schedules to be fully converted into sales.
Raw material prices have continued to rise in the second quarter which, with the time-lag in the associated sales price increase, has continued to put pressure on margins.
The group increased inventory levels during the period and is well positioned to satisfy demand increases as they come through. The balance sheet remains strong with pre-dividend cash generation in the period and, despite the current uncertain conditions, management expects to at least maintain the interim and final dividends.
Notice of results
The group intends to announce its half year results on 12 November 2021.
S J Mant
Director and Company Secretary
Castings PLC, Lichfield Road, Brownhills, West Midlands, WS8 6JZ