Castings enjoys improved sales and profits

Pre-tax profits were up from £4.4 million a year earlier to £12.1m for the year to the end of March.

The foundries group saw production improve during the year despite recruitment problems which have now mainly been solved.

Chairman Brian Cooke said output was now in line with the three-year average before the Covid-19 paneemic.

"The year was again affected by problems experienced by our major customers in the commercial vehicle sector mainly relating to semiconductors. However, things are improving and it is hoped that this will continue.

"We have been subjected to large increases in raw materials and other input prices in order to maintain production. These increases are being passed on to our customers, but there is a delay in recovery which affects our ongoing profits in the short term," he explained.

Mr Cooke said the group was continuing to invest both at Castings Brownhills and William Lee at Dronfield in Derbyshire to improve productivity, reduce labour costs and improve working conditions.

Losses at machined components business CNC Speedwell in Brownhills reduced from the previous year.

"The profitability of the business is significantly impacted at lower output levels because of the high capital investment in machinery that is underutilised. We are now moving back towards full production and we expect the result to improve," added Mr Cooke,

He said that the group's costs will continue to increase in the current year, including significant electricity rises when its current fixed contract comes to an end on September 30.

"Our customers have been made aware of the situation and the fact that, in order to continue to supply, the cost increases will be passed on.

"Our customers are now increasing their demand and, in this respect, they are more successfully managing the supply of semiconductors and other items in the supply chain. It is hoped that this will continue so we can enjoy improved sales in the current financial year.

"Underpinning the improved outlook and on top of new customer platforms where we have greater content, there have been a number of market wins in other sectors including wind energy, trailer braking and coupling systems and innovative agricultural products,"Mr Cooke added.

The directors are recommending the payment of a final dividend of 12.57pe per share to be paid on August 19 to shareholders on the register on July 22. Together with the interim dividend it makes a total dividend for the year of 16.23p per share.

The board has reviewed the cash position of the group and considered the balance between increasing returns to shareholders whilst retaining flexibility for capital and other investment opportunities. As a result, the directors are declaring a supplementary dividend of 15p per share to be paid on July 26 to shareholders on the register on June 24.