Castings (CGS) returned its ailing machining business, CNC Speedwell, to profit over its first half, but warned that external risks could play havoc with forecasts for the rest of its financial year.
Speedwell swung from a prior year half-year loss of £0.8m into a profit of £0.1m, although revenues fell 8.1 per cent. Castings has been winding down its investment in automating operations within the division, reducing spending from £1.3m to £0.6m, although the company caveated that it would “continue to take time” to realise the benefits of this expenditure. Its foundry division, meanwhile, experienced strong customer demand in its first quarter, followed by a softening in sales.
Yet Castings struck a cautious tone on its outlook. It is heavily exposed to the current decline in the European commercial vehicle sector, which accounts for 70 per cent of group revenues, and customer orders have fallen across the market. The group noted the risks posed to the UK economy by uncertainty linked to the general election and Brexit. These “could have a material impact on the group's performance,” for the rest of the year, it commented, adding that these “could cause actual results to differ materially from expected and historical results”.
