101 redundancies planned at Walsall castings group

It would leave the business, which has recently lost two major contracts and had been facing the prospect of potential insolvency, with a 138-strong workforce.

The redundancies are part of a restructuring process which Chamberlin, based at Chuckery Road ,says will save the company £3.4 million a year.

Chamberlin and Hill, including its machine shop, saw sales in the five months to February 28 down from £7.8m to £5.7m reflecting a progressive reduction in purchases from principal customer BorgWarner.

Prospects for the machine shop remain unclear and the board is continuing to review options in light of the continued reduction in purchases.

It says prospects for growth at the Chamberlin and Hill foundry are encouraging with the casting of automotive turbocharger housings remaining a dominant market for Chamberlin.

Chamberlin has raised around £3.5m through a share placing which follows a £200,000 investment into the company in February from new non-executive director Trevor Brown which has kept the company.

Mr Brown has invested a further £1.05m in Chamberlin as part of the share offer. He now owns 29.5 per cent of the company's shares.

The company says that the cash raises will help it to publish its accounts for the year to the end March, 2020. Interim accounts for the six months to the end of September will be published as soon as possible after that.

Provisional figures show that Chamberlin made a pre-tax loss of £4.95m for 2019-2020 on revenue of £32.9m.

Keith Butler-Wheelhouse, chairman of Chamberlin, said: “We are delighted with the support shown by our existing and new shareholders through this fundraise which places Chamberlin on a sounder financial footing. Management are confident that sales at Chamberlin will stabilise in the first half of the new financial year and will then grow from the post BorgWarner low, with the growth gathering pace in the second half. The board expects growth from all business units and a return to profitability and cash generation post our restructuring.”

The Board has been rigorously investigating the possibility of new equity capital and alternative measures to ensure the company's future.

The group has three subsidiaries: Chamberlin and Hill in Walsall; Russell Ductile Castings, Scunthorpe and industrial lighting business Petrel, Walsall.

Sales at both RDC and Petrel in the 11 months to the end of February were up approximately two per cent on the previous year.

Chamberlin says the outlook for both RDC and Petrel is encouraging and recent sales growth is expected to continue.