LONDON (ShareCast) - (ShareCast News) - Castings posted its interim management report for the six months to 30 September on Friday, with sales for the period of £57.9m, down from £65.0m, with profit before tax of £7.08m, compared with £9.51m a year earlier.
The company had reported at its annual general meeting in August that it had seen a softening in demand from its main customers.

"This continued during the remainder of the period resulting in lower foundry sales volumes than the previous six months, although revenue continues to benefit from a greater mix of more complex machined parts," the board said in a statement.

"In addition, the machining business has seen a significant reduction in revenue following the end of a major contract, as previously reported.

"The introduction of replacement work remains on course for 2017/18 onwards, but the pre-production costs associated with this work is impacting the current financial year."

Castings said that, while it does not anticipate any significant further reductions in output, it does not expect to see any improvement for the remainder of the financial year.

An interim dividend of 3.38p per share was declared by the board, and will be paid on 3 January 2017 to shareholders who are on the register at 25 November.

"There are a number of potential risks and uncertainties which could have a material impact on the group's performance over the remaining six months of the financial year and could cause actual results to differ materially from expected and historical results," the board cautioned.

"Since publication of the 2016 annual report, the UK vote to leave the European Union has created significant uncertainty about the near-term outlook and prospects for the UK economy.

"It is still too early to quantify or determine with certainty the impact on the group."

The firm's board said it will continue to monitor developments, consider the impact on the group's businesses and take appropriate action to help mitigate any risks associated with the UK leaving the EU.

Castings also announced that its chief executive David Gawthorpe indicated that he wishes to retire at the end of this financial year to 31 March 2017.

"In accordance with the group's succession planning, Adam Vicary, managing director of Castings Brownhills, will assume the role of chief executive thereafter."

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