Sales holding steady at Castings group
Steady demand from customers has buoyed sales at Castings, the Brownhills engineering and foundry group.
But profits have dipped as it continues working to overcome problems at its loss-making machining arm.
Half year figures to the end of September show sales up to £68.3 million from £61.7m at the same time last year, but pre-tax profits have dipped to £5.77m from £5.91m 12 months ago.
Steady customer demand for its foundry castings has seen output up slightly to 23,900 tonnes and external sales revenue rose 11.2% to £65m, boosted by a shift to more machined parts with higher average selling prices.
But higher raw material costs contributed to a 5.7% fall in profits from Casting's foundry business, to £6.5m. The company has invested £2.3m on automation and productivity initiatives in the foundry business over the first half of the year.
The struggling CNC Speedwell maching operation increased its external revenue by just 0.7% to £3.3m, while losses of £800,000 were down on the £1m loss for the same period a year ago.
Chairman Brian Cooke said: "Whilst the operating loss is disappointing, it reflects the current status of the machining businesses in what is a period of considerable change."
Meanwhile the company has closed its machining site at Fradley and consolidated the business at Brownhills.
Looking ahead, Mr Cooke said: "Demand from our commercial vehicle customer base remains steady and every effort is being made to ensure further productivity gains are achieved within the foundry businesses to enhance the return.
"The ongoing changes at the machining operation are undoubtedly going to take time before they generate any significant return. The intention is to begin a programme of automation investment during 2019/20 which will enable the business to achieve additional productivity gains over a number of years. The business continues to provide vital support to the foundries in satisfying the product requirements of the group's core customer base."
