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Castings PLC on Tuesday warned on annual earnings, as demand for heavy trucks dropped further in the third quarter of its financial year which ends at the end of March.
The Brownhills, West Midlands-based iron casting and machining firm, which primarily serves the European heavy truck market, said: ‘Although early indications are that volumes are recovering somewhat during the final quarter of the year. As a result, the underlying profitability of the established foundry and machining businesses is expected to be below market expectations.’
It added: ‘It is the board’s expectation that the company’s result will be substantially below market expectations in the current year.’
Castings said increased electricity costs are not expected to impact profitability in the next financial year.
More positively, it said: ‘Our major customers have recently reported increasing sales orders which are expected to positively impact Castings sales volumes early in the next financial year. The balance sheet remains strong, notwithstanding significant capital investment and dividend distributions in the year.’
Castings shares fell 16% to 242.06 pence each on Tuesday morning in London.
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