The ending of a major contract at its CNC Speedwell machining business weighed heavily on Castings (CGS) at the full year, leading to a "significant reduction in sales". Revenue for the machining division fell to £7m in the year from £17.7m in 2016. The group has won replacement work, but expects it to take two years for turnover and profitability to return to previous levels.
The foundry business, which contributed the vast majority of revenue, suffered a 9.2 per cent reduction in output to 47,200 tonnes, while external sales revenue slipped 2.5 per cent to £112m. With customer requirements expected to remain steady, the group is looking to focus on improving productivity through investments such as robotic handling, automation and developing production methods as sales move towards a greater focus on more complex machined parts.
Analysts at Arden Partners have revised down their forecasts, and are now expecting adjusted profit before tax of £16.2m in the year to March 2018, giving EPS of 30.4p (from £15.9m and 29.8p in FY2017).
CASTINGS (CGS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 465p | MARKET VALUE: | £203m | |
| TOUCH: | 460-470p | 12-MONTH HIGH: | 490p | LOW: 390p |
| DIVIDEND YIELD: | 3% | PE RATIO: | 16 | |
| NET ASSET VALUE: | 285p | NET CASH: | £27.2m | |
| Year to 31 Mar | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 122 | 19.2 | 33.9 | 12.34 |
| 2014 | 137 | 21.8 | 39.6 | 12.96 |
| 2015 | 131 | 17.5 | 31.8 | 13.30 |
| 2016 | 132 | 19.7 | 37.1 | 13.71 |
| 2017 | 119 | 15.9 | 29.8 | 13.97 |
| % change | -10 | -19 | -20 | +2 |
Ex-div: 13 Jul Payment: 18 Aug | ||||
