Castings Plc is a market leading iron casting and machining group based in the UK, supplying both the domestic and export markets. The company is listed on the LSE main market and has a market cap of £155m. Full year results to 31 March 2024 were released on 12 June 2024.
We were delighted to welcome CEO Adam Vicary and FD, Steve Mant, to a webinar for private investors to talk about the excellent full year results and the prospects for the current year . A recording of the webinar is available here.
The full year results to 31 March 2024 was another year of strong truck demand and near record operating profit. In terms of the highlights operating profits rose 21% to £19.8m and the machine shop posted a very strong performance, contributing £3.7m to operating profits. The first solar panels were fitted which are anticipated to provide 10% of the power to the machine shops. The first 9 months of the year were very buoyant with strong demand but truck customers cut their schedules towards the end of the calendar year and an anticipated 10% drop in demand turned into a near 20% drop. Truck demand has remained at these lower levels although is expected to improve later in the year.
Price increases were passed through to recover labour and general cost inflation as was energy cost inflation although this is now beginning to fall. Operating margins rose to 8.8% and there was good demand from the US business and this still presents a growth opportunity and they are engaging with existing and new customers here.
On the capacity side there has been continued investment in new machinery for the machine shop which is now almost complete. There was further Investment in robots and AI is beginning to be implemented into quality inspection processes. All these investments are improving the production process and delivering productivity gains. Some of the foundry production was outsourced during the year due to the increased demand and this has now returned in house.
Looking at the financials in more detail there was a 12% increase in revenue to £224.8m. Volumes fell 5%, all of it coming in the fourth quarter reducing revenues by £10m. Offsetting this there was an increase in higher valued machined parts, the energy surcharge contributed £13m and price increases added a further £16m. Operating profits rose…
