Castings reports higher interim profit despite demand softness

(Sharecast News) - Castings reported a higher interim profit on Wednesday, despite softer demand in its core heavy-truck market, as efficiency gains and new production capacity offset lower revenues. For the six months ended 30 September, pre-tax profit rose to £5m from £4.1m a year earlier, while revenue edged down to £87.6m from £89.2m.

The foundry group said the results were in line with management expectations.

It said European heavy-truck demand, which accounts for about 75% of its revenue, remained around 10% to 15% below normalised levels, while US demand had recently shown similar declines.

Despite that, Castings said its Ductile Castings business in Scunthorpe was benefiting from prior engineering investments and consolidation in the UK larger-casting market, resulting in an improved order book and growing customer base.

Production during the period rose slightly to 20,950 tonnes, up from 20,800 tonnes a year earlier, with external sales down 1.9% to £86.9m.

Profit from the foundry segment increased to £4m from £2.4m, with the margin on external sales improving to 4.6% from 2.7%.

The group invested £8.3m in its foundries, mainly in the new production line at its Dronfield site, which was commissioned during the period and is now operational.

Castings said the new plant's greater dimensional capabilities would enable it to target new markets such as wind energy and truck electrification, while offering opportunities in the US and other growing sectors.

The Ductile Castings business, which produces castings of up to seven tonnes, was said to be profitable at current activity levels and expanding its offering in power generation and infrastructure.

At its machining subsidiary, CNC Speedwell, revenue fell 5.7% to £15.2m, while profit declined to £0.8m from £1.1m as lower volumes weighed on margins.

The firm said it had invested £0.8m in upgrading machinery to improve efficiency.

Castings said it maintained a strong balance sheet with cash exceeding £15m at the end of the period, after paying dividends totalling £6.2m and funding its foundry expansion.

An interim dividend of 4.21 pence per share, unchanged from last year, would be paid on 6 January 2026 to shareholders on the register at 28 November.

The company said current demand schedules reflect continued lower build rates among truck manufacturers, but management expects full-year trading to remain in line with market expectations.

It added that medium-term growth opportunities include new product tenders for existing customers, expansion into new market segments and greater reach in the US through local warehousing and distribution arrangements.

At 1042 GMT, shares in Castings were up 2.56% at 240p.

Reporting by Josh White for Sharecast.com.