Castings P.L.C.
Annual Financial Report
DTR 6.3.5 Disclosure
Year ended 31 March 2022
Chairman's Statement
The turnover of the group increased to £149 million (£115 million last year) with a rise in profit before exceptional items and income tax to £12.1 million compared to £4.4 million last year.
Overview
We have seen an improvement in turnover and profit compared with the previous year's trading with output being in line with the three year average before COVID.
The year was again affected by problems experienced by our major customers in the commercial vehicle sector mainly relating to semiconductors. However, things are improving and it is hoped that this will continue.
We have been subjected to large increases in raw materials and other input prices in order to maintain production. These increases are being passed on to our customers, but there is a delay in recovery which affects our ongoing profits in the short-term.
Foundry businesses
I am pleased to report foundry production has improved during the year despite recruitment problems which have now mainly been solved.
We continue to invest both at Castings Brownhills and William Lee to improve productivity, reduce labour costs and improve working conditions.
CNC Speedwell
It is pleasing to report the losses have been reduced from the previous year. The profitability of the business is significantly impacted at lower output levels because of the high capital investment in machinery that is underutilised. We are now moving back towards full production and we expect the result to improve.
Outlook
It is expected that costs will continue to increase in the current year, including significant electricity rises when our current fixed contract comes to an end on 30 September 2022. Our customers have been made aware of the situation and the fact that, in order to continue to supply, the cost increases will be passed on.
Our customers are now increasing their demand and, in this respect, they are more successfully managing the supply of semiconductors and other items in the supply chain. It is hoped that this will continue so we can enjoy improved sales in the current financial year.
Underpinning the improved outlook and on top of new customer platforms where we have greater content, there have been a number of market wins in other sectors including wind energy, trailer braking and coupling systems and innovative agricultural products.
Dividend
Once again our conservative financial policy has proved to be a strength during these difficult times and it is gratifying that, as a result, we have been able to maintain dividend payments during the COVID-19 pandemic.
The directors are recommending the payment of a final dividend of 12.57 pence per share to be paid on 19 August 2022 to shareholders on the register on 22 July 2022. This, together with the interim dividend, gives a total dividend for the year of 16.23 pence per share.
Supplementary dividend
In addition to the final dividend set out above, the board has reviewed the cash position of the group and considered the balance between increasing returns to shareholders whilst retaining flexibility for capital and other investment opportunities. As a result, the directors are declaring a supplementary dividend of 15.00 pence per share to be paid on 26 July 2022 to shareholders on the register on 24 June 2022. This dividend, being discretionary and non-recurring, does not compromise our commitment to invest in market leading technologies to maintain our competitive advantage.
It has been another difficult year with the ongoing disruption from the pandemic and, in this respect, I wish to thank the directors, senior management and all of our employees for their help and commitment during the year.