Sales and profits fall at Brownhills foundry group Castings
Sales and profits are down at Brownhills foundry and engineering group Castings, but it said current customer demand 'remain steady' despite Brexit concerns.
Turnover was down to £119 million in the 12 months to the end of March compared to £132m the previous year. Pre-tax profits fell 19%, to £15.9m from £19.7m.
Around 400 people work at Castings' foundry on the Lichfield Road in Brownhills, with another 180 over the road at the group's CNC Speedwell auto components business. Another 400 work at the William Lee foundry near Sheffield.
Chairman Brian Cooke said today: "Despite a reduction in output during the year the foundries maintained a good profit level. This has been achieved by continued investment in productivity.
"In this respect, both at Brownhills and William Lee, investment in robotic handling is taking place which will improve quality standards and reduce costs associated with the processing of raw castings."
He added: "It appears that the customer demands at the present time remain steady.
"The situation concerning Brexit is creating a certain amount of concern in the manufacturing sector and the sooner the Government negotiates a deal to remove this uncertainty the better it will be for planning the future."
Meanwhile strong cash generation had enabled a series of investments as well as returning £13m to shareholders through a special dividend, said Mr Cooke.
The group said its CNC Speedwell business had been hit by a 'significant reduction in sales' – down by 60% – as a major contract came to an end. Replacement work has been secured but it could take two years to return turnover and profits to previous levels.
Castings said its foundry business had seen output fall 9.2% during the year to 47,200 tonnes, while sales revenue fell 2.5% to £111.8m. Demand has increased for more complex machined parts.
Improving productivity, particularly with investments in automation and robotic handling. The company also completed an extension in December at Brownhills to provide additional warehousing and machining space.
Castings pumped £14.2m of investment into the business during the year, in production process and warehousing for the foundry businesses and production facilities and machining centres for the machining operation.
Meanwhile chief executive David Gawthorpe retired after 33 years at the end of March. He has been replaced by Adam Vicary, former managing director of the Brownhills foundry.
