Chamberlin margins hit by production problems at new Walsall machining centre
Chamberlin, the specialist castings and engineering group, has issued a profits warning after problems at its new machining facility in Walsall.
The site was opened earlier this year, creating two dozen jobs in a major investment enabling Chamberlin to produce fully-machined components.
But the company, based at Chuckery Road, says that while its revenues so far this year are on track, profits will not make the improvements that had been hoped for.
In a statement to the City today, Chamberlin said its six month revenue figure was in line with management expectations, "reflecting overall good levels of demand across the foundry and engineering businesses".
But margins within the group's foundry businesses "have been adversely affected by production issues".
Technical difficulties at the new machining facility, at Maple Leaf Industrial Estate, off Bloxwich Lane, Walsall, had "created cost inefficiencies and extended cycle times".
Chamberlin said it was addressing the issues and working closely with the machine and tooling suppliers to rectify the situation.
However, while Chamberlin's management still expects group revenues for the year to be substantially ahead of the prior year, underlying profits are now expected to be in-line with the prior year.
In May Chamberlin revealed underlying pre-tax profit for the year to the end of March had more than doubled to £579,000 from £233,000 the previous year ago.
The group says its two engineering operations, Exidor in Cannock and Petrel in Birmingham, continued to trade in line with expectations. It was also seeing demand for turbo charger bearing housings, a key growth driver for the group, continuing to grow.
A further update is due when the group's half year results are published towards the end of November.