High levels of demand continue for Castings
Foundries group Castings says higher levels of demand from commercial vehicle customers have continued since June.
Chairman Brian Cooke said ahead of the Brownhills-based group's annual general meeting in Walsall that that there had been relatively little disruption resulting from supply chain issues.
Commercial vehicle customers make up 70 per cent of group revenue.
Mr Cooke said that the forward demand schedules continued to reflect the higher build rates that the heavy truck manufacturers required to satisfy their order books.
"The group will see the benefit of the greater content won on the new customer platforms as these are now in production.
"Input prices have continued to rise in the current financial year and are being passed on to our customers.
"The most significant increase will be on October 1 following the end of our fixed price electricity contract. The higher unit cost for power will be surcharged to our customers immediately and will therefore increase revenue in the second half of the year. Whilst this should not adversely affect group profit as it is a pass-through of a direct cost increase, there will be a dilutionary impact on the margin percentage," said Mr Cooke.
Castings is continuing to invest in automation technologies to improve productivity and profitability.
A partially automated pouring process has just been commissioned on one of the group's largest production lines.
