Interim Management Statement and AGM
Castings PLC announces a trading update ahead of the AGM being held today at 3.30pm at The Fairlawns Hotel and Spa, 178 Little Aston Rd, Walsall, WS9 0NU.
We previously reported in June that our commercial vehicle customers (70% of group revenues) were forecasting increased volumes in the second half of the current financial year but were experiencing some problems in their supply chains, particularly in respect of semiconductors.
Output during the first quarter of the financial year was in line with recent years before COVID-19. However, the reported supply chain issues have forced the OEMs to reduce truck build rates to below their order intake levels. This particularly impacted group sales in the last two weeks of June and has continued to do so into the second quarter.
The forward demand schedules continue to reflect the higher build rates that the heavy truck OEMs require to satisfy their orderbooks. Clearly there remains uncertainty over whether the supply chain restrictions will allow the strong forward schedules to be realised in the near term. The group has maintained high production levels to increase stocks and ensure we are able to supply the higher anticipated demand.
Raw material prices have continued to rise into the current financial year which, with the time-lag in the associated sales price increase, is still negatively impacting margins.
Our investment remains focused on automation technologies to improve our productivity and profitability.
Castings plc, Lichfield Road, Brownhills, West Midlands WS8 6JZ
19 August 2021