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Castings PLC on Wednesday said profit declined by more than 50% in the first half of its current financial year, as heavy truck revenue fell relative to high demand last year. The Brownhills, West Midlands-based iron casting and machining firm for the heavy truck market said pretax profit for the six months that ended September 30 was £4.1 million, falling 60% from £10.3 million a year before. Revenue fell 20% to £89.2 million from £111.3 million last year, as cost of sales reduced 18% to £74.2 million from £90.0 million. Heavy trucks represented around 75% of the group’s revenue, for which demand has remained ‘at lower levels relative to the elevated demand for most of the year ended March 31’. The US, however, was a ‘notable exception’, with ‘increased penetration with existing customers’. Castings declared an interim dividend of 4.21 pence per share, up 1.9% from 4.13p last year. Chair Alec Jones said: ‘The demand schedules for the remainder of this financial year continue to reflect the lower build rates that the heavy truck [original equipment manufacturers] have reported. We expect production efficiencies to improve in the second half of the year with the businesses having adjusted to the lower demand patterns. Assuming no material further reduction in demand schedules, management believes that the company will trade in line with market expectations for the year. ‘In the medium-term, there continues to be opportunities for growth including new parts being quoted for our existing heavy-truck customers, greater reach in the US aided by a new warehousing arrangement, the expansion of the customer base at our larger casting facility and the offshore energy, agriculture and rail markets.’ Shares in Castings were up 3.6% at 288.00 pence per share in London on Wednesday morning. Copyright 2024 Alliance News Ltd. All Rights Reserved.
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