Engineering group Castings swings to a loss
Foundries group Castings has swung to a loss after seeing demand hit due to the Covid-19 pandemic.
The Brownhills-based firm has reported a pre-tax loss of £630,000 for the six months to September 30, compared with a profit of £7.34 million in the same period last year.
Castings also saw sales slump from £41.7 million compared with £73.1 million last year.
Output reduced by about 80 per cent during the first two months of the period as the commercial vehicle sector, which represents 70 per cent of group revenue, closed production facilities and 80 per cent of its workforce was placed on furlough leave under the Coronavirus Job Retention Scheme.
During the following four months, there was a gradual increase in demand from the heavy-truck OEMs (Original Equipment Manufacturer) which saw monthly demand levels reach about 85 per cent of pre-Covid levels at the end of the period.
The group completed on the sale of the Fradley site near Lichfield for £1.95 million on September 22, resulting in a profit of £0.66 million.
A statement signed off by chairman Brian Cooke said: "The current heavy-truck schedules suggest output returning to pre-Covid levels, albeit there continues to be uncertainty regarding the pandemic.
"Assuming these levels are realised, the group is well positioned to see the benefits of the productivity improvements in both the foundry and machining businesses.
"The group has been successful in obtaining a number of new projects with our European truck customers that will commence production in 2021/22 and 2022/23.
"The automation of finishing processes within the foundries is largely complete and the automation investment programme in the machining business will continue in the medium term.
"The group maintains a strong balance sheet with cash levels of £35.2 million; an increase of £1.8 million during the period after the dividend payment of £5 million."
