Interim Management Statement and AGM
Castings PLC announces a trading update ahead of the AGM being held later this morning.
As previously reported, the group experienced a significant fall in demand at the start of the financial year with approximately 80% of our workforce being placed on furlough leave under the Coronavirus Job Retention Scheme.
The group is most closely aligned to the commercial vehicle sector with approximately 70% of our revenue associated with heavy-truck OEMs. As was widely reported, OEMs closed their facilities towards the end of March and only started limited production again in early May. As a result, during April and May 2020, our despatch weight reduced by c. 80% compared to the levels immediately preceding the COVID-19 lockdown. Since that time, we have seen a steady increase in demand from the truck sector to over 60% of pre-COVID output levels.
Whilst the traditional summer shut down periods can impact the reliability of forecast underlying demand, forward schedules suggest an increase to approximately 85% of pre-COVID levels and therefore the majority of our workforce have now returned to the business to support the increased production levels. It remains uncertain as to whether this forecast demand will materialise and how sustainable it will be; it is not possible to differentiate between demand to satisfy pre-lockdown truck orders as opposed to underlying demand.
In the light of the pandemic, the board has focussed on cash preservation and the balance sheet remains strong. Our investment remains focused on production techniques and automation technologies to improve our productivity and profitability.
Castings plc, Lichfield Road, Brownhills, West Midlands WS8 6JZ
13 August 2020
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [email protected] or visit www.rns.com.