Strong heavy truck demand boosts Castings
Foundries group Castings says results for the year to the end of March are anticipated to be ahead of market expectations.
In November the Brownhills-based iron casting and machining group reported strong demand from the commercial vehicle sector making up 70 per cent of group revenue, reflecting the high build rates that the heavy truck manufacturers require to satisfy their order books.
The situation continued during the remainder of the financial year with customers increasing schedules.
The group has seen an increase in the total weight of castings despatched during the year, but significant production rebalancing has been necessary to accommodate the higher volumes, which have been skewed towards certain production lines. This has caused some production inefficiencies, particularly in the second half of the year.
A fixed price contract for electricity ended on September 30 and the additional cost for power was surcharged to customers and resulted in an increased revenue in the second half of the year. This did not adversely affect group profit as it is a pass-through of a direct cost increase. Further price increases are being negotiated in respect of other cost rises.
Castings says that forward demand schedules continue to reflect the strong order books across its customer base.
The group intends to announce its full results for the year on June 14.
