Sales improving for Chamberlin after slowdown
Walsall-based castings and machining group Chamberlin says a slowdown in sales has started to improve in its current quarter.
For the three months to the end of February underlying demand across the group was below management expectations.
Schedules over the period were lower than previously forecast by customers and were further impacted by delays with the start up of certain new programmes.
Demand from customers in the renewable offshore energy market remained very strong, but the majority of other market sectors were affected by a slowdown in immediate demand.
Lower sales during the third quarter have negatively affected profitability and working capital, however the management team are taking appropriate action to mitigate the impact.
The slowdown started to improve in the final quarter of 2023-24 which runs to the end of May.
Customer schedules are recovering to a more normalised and stable level, with a strong rise in demand forecast within the next six-month period as new programmes start to ramp up production.
Following a full strategic review, a programme of cost reduction actions have been implemented across the group including labour reductions, short time working and senior management restructuring.
Alongside this, the company has conducted a full review of product margins and implemented price increases accordingly to underpin the required profitability and cash generation. The group is expected to benefit from these actions within three months and create a more robust level of profitability going forward.
Debt following the sale of Petrel in Kitts Green, Birmingham, has greatly improved and the company remains focused on paying off the remainder of its legacy debt within the next 12 months.
