Castings swings to interim loss but declares dividend

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Castings PLC (LON:CGS) has posted an interim loss but said it will pay a dividend supported by its strong balance sheet.

The metals fabricator, which is sitting on a £35mln cash pile, will pay investors 3.57p per share.

The firm said the current heavy-truck schedules suggest output returning to pre-coronavirus (COVID-19) levels, albeit that there continues to be uncertainty regarding the pandemic.

Castings said it expects to see improved trading in both the foundry and machining businesses if those levels are realised.

The group pointed out that it has new projects with European truck customers that will commence production in 2022 and 2023.

The automation of finishing processes within the foundries is largely complete, it added, and the automation investment programme in the machining business will continue in the medium term.

In the six months to September 30, 2020, Castings sales dropped by 43% to £41mln while last year’s £7mln profit before tax turned into a £630,000 loss.

Output was down 80%, since the commercial vehicle sector, which represents 70% of group revenue, closed production facilities amid lockdowns, so the iron casting and machining group had 80% of its staff on furlough.

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