reports
- Andy Hanson
- Carl Smith
Castings plc (CGS LN) - AGM trading statement – caution in the heavy t...
Castings has released an AGM trading statement indicating that demand from commercial vehicle OEMs continues to be at low levels relative to the strong FY24 period. With an improvement in demand now not expected until at least early 2025, we lower adjusted PBT forecasts for the year to 31 March 2025 by 32% from £14.8m to £10.1m. Elsewhere, trading has commenced at the Scunthorpe ductile business acquired in June and the investment in the new foundry production line remains in line with budget, w...
- Andy Hanson
- Carl Smith
- Robin Byde
Industrials Round-up - 08 July 2024
The UK industrial sector continues to strengthen with June output and order books increasing for a second consecutive month, albeit at a slightly slower pace than in May. We think it is too soon to declare conclusively a turnaround, but recent industrial and economic data have been reassuring, as inflation returned to the BoE’s 2% target and sentiment remained positive.
- Andy Hanson
- Carl Smith
Castings plc (CGS LN) - Strategic and opportunistic acquisition
Following last week’s FY24 results, Castings has announced the acquisition of Russell Ductile Castings Ltd (RDC) from its administrators for £0.4m. RDC diversifies the Castings business into new product areas and has an established customer base that management believe they can continue to service. The acquisition generated £10.0m of revenue and c. £0.5m of operating profit in its last audited accounts to 31 May 2023. The diversification of the product and customer base should be viewed positive...
- Andy Hanson
- Carl Smith
Castings plc (CGS LN) - Strong FY24 results, tougher times ahead
Castings’ FY24 results are in line with the trading statement released on 1 May. Even as the market slowed down, particularly in the final quarter of FY24, Castings increased annual PBT by 27.5% to £21.3m, slightly beating our previously upgraded £21.0m estimate. In addition, it has announced another special dividend of 7.0p taking the total dividend to 25.3p for FY24.
- Andy Hanson
- Carl Smith
- Robin Byde
Zeus Industrials Round-Up - 11 June 2024
As we approach the end of H1, recent industrial and economic indicators display an encouraging picture, cautiously supporting optimism for the latter half of 2024. UK manufacturing returned to growth in May, with many countries recording higher PMI readings. Inflation data across the globe was also encouraging, prompting the Bank of Canada and ECB to cut interest rates last week. UK GDP growth for Q1 was also positive and overall business confidence appears to have improved.
- Andy Hanson
- Carl Smith
Castings plc (CGS LN) - Another impressive performance
Castings has released a brief trading update for FY24 to the end of March indicating that results will be marginally ahead of market expectations, so we increase FY24 PBT estimates by 4.7% to £21.0m, driven by an improved margin. Demand in the heavy truck market has been normalising with forward schedules now at a lower level, as also reported by major truck OEMs. Zeus forecasts for FY25 will be revisited at the 12 June results when we will have a better indication of demand volumes. At current ...
- Andy Hanson
- Carl Smith
Castings plc (CGS LN) - Interims show robust demand
Castings has released an exceptionally strong set of interims for the six months to the end of September. Revenue growth of 30% was driven largely by increases in price per tonne from the Foundry business due to cost surcharges and customers taking higher value products. As a result, operating profit increased 31% to £9.6m and we lift our FY24 estimates by 3.7% to £19.2m. We also factor in the impact of a new £17m planned production line that is expected to come on stream in FY26 to help meet fo...
- Andy Hanson
- Andy Hanson
Castings plc (CGS LN) - Strong demand in H1
Castings has released a trading update ahead of its H1 24 interim results next month (10th November). It confirms the strong trading seen in the first four months of the year (AGM trading update) has continued through August and September and revenue is ahead YoY. Underlying demand for heavy trucks (c. 75% of Group revenue) remains at elevated levels and continues to be reflected in the schedules of OEM customers. In fact, Castings notes that current and forecast demand is in excess of capacity....
- Andy Hanson
Audio Note: Castings - Strong demand dynamics continuing into H1’24
In this audio note, Zeus’ Andy Hanson summarises the investment case for Castings plc. Castings released a brief trading update ahead of their AGM. The strong demand from commercial vehicle customers reported for the year to March has, encouragingly, continued into the first four months of FY24. Listen to the audio note below, and read the full research here.
- Andy Hanson
- Andy Hanson
Audio Note: Castings plc - Strong FY23 feeds into positive outlook for...
In this audio note, Zeus’ Andy Hanson summarises the investment case for Castings. Castings has released its FY23 results confirming strong performance across the year with revenue increasing 35% to £201.0m and operating profit up 36% to £16.4m. Listen to the audio note below, and read the full research here.
- Andy Hanson
Castings plc (CGS LN) - Strong FY23 feeds into positive outlook for FY...
Castings has released its FY23 results confirming strong performance across the year with revenue increasing 35% to £201.0m and operating profit up 36% to £16.4m. The FY23 dividend of 17.4p plus a supplemental special of 15.0p equals a total of payout of 32.4p. Despatched weight was the highest since 2014 and the foundry operations increased output 6.6%. Pricing was firm across the Group as surcharges were implemented to offset input cost inflation, particularly energy. Importantly the Machining...
- Andy Hanson
Castings plc (CGS LN) - Year-end trading update
Today’s FY23 trading update confirms a continuation of the strong performance achieved by Castings in HY23, despite broader macro-economic difficulties, due to the resilience of and strong end-customer demand in the HGV market. Zeus update headline forecasts for FY23, increasing revenue expectations by 11.1% to £200m and adjusted PBT by 8.4% to £16.8m. The strong operating environment has continued to support good trading in the first month of the new financial year and the order book remains at...
- Andy Hanson
- Andy Hanson
Castings plc (CGS LN) - HGV market keeps on trucking
Castings interim results confirm revenues for H1 23 are up 22.7% YoY at £85.6m (H1 FY22: £69.7m) with PBT up 37.8% at £7.5m (H1 FY22: £5.4m). This comes from a resilience in the end customer market of commercial and heavy goods vehicles where demand has remained strong throughout 2022 across the major OEMs. This positive HGV backdrop and strong forward order books provides confidence in Castings achieving Zeus’s full year revenue estimates of £180.0m (FY22A: £148.6m) and PBT of £15.5m (FY22A: £1...
- Andy Hanson
Audio Note: Castings - Commercial vehicle customer demand remains firm
In this audio note, Zeus’ Andy Hanson summarises the investment case for Castings. Demand from Commercial vehicle customers (c. 70% of Group revenue) remains firm, continuing the trend reported in the AGM statement (16th August), with a more consistent conversion of forward schedules. Listen to the audio note below, and read the full research here.
- Andy Hanson
Castings plc (CGS LN) - Commercial vehicle customer demand remains fir...
Demand from Commercial vehicle customers (c. 70% of Group revenue) remains firm, continuing the trend reported in the AGM statement (16th August), with a more consistent conversion of forward schedules. With the positive demand dynamic having continued during H1 ’23, confidence can be taken that the business remains on track to hit the Zeus estimates of £180.0m (FY22A: £148.6m) revenue and £15.5m (FY22A: £12.1m) PBT in FY23. However, cost input inflation and, to a lesser extent, currency movemen...
- Andy Hanson
Zeus Audio Note: Castings – AGM Update: Strong trading maintained
In this audio note, Zeus’ Andy Hanson summarises the investment case for Castings. Trading in the first four months of the year has remained strong with the improving levels of demand seen in Q4 FY22 being maintained into the early part of FY23. Listen to the audio note, and read the full research here: /zeus-research-portal/#/portal/zeus-capital/research/be32517c-04cc-457a-8b52-08872ab21238 Listen to all episodes of the Zeus Research team Audio Notes here: /h75jn5e_rb/ This content is is...
- Andy Hanson
Castings Plc (CGS LN) - Initiation of coverage: Strong recovery in FY2...
FY22 results show a marked recovery on the pandemic impacted FY21 numbers with volumes broadly in line with pre-Covid levels, albeit c.5% below FY19 peak. Revenue increased 29.5% to £148.6m (FY21: £114.7m) with adj operating profit of £12.0m (FY21: £4.3m), a 180% increase yoy as the margin more than doubled to 8.1% (FY21: 3.7%) benefitting from the recovery in volume and with prices increasing 4.7%. Despite the strong recovery in FY22, several important KPIs remain below pre-pandemic levels with...
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