Castings P.L.C. is a market leading iron casting and machining group based in the UK, supplying both the domestic and export markets. The company is listed on the LSE main market and has a market cap of £170m. Results for the FY to 31st March 2021 were released on 16th June.
We were delighted to welcome the CEO, Adam Vicary and FD, Steve Mant, to a webinar for private investors to introduce the company, talk about how they are recovering after a tough year impacted by Covid and the improving prospects. A recording of the webinar is available here.
By way of introduction Adam started with a quick overview of the three operating businesses. The original Castings business is based at the Brownhills foundry in the Midlands, produces 30k tonnes/year and employees 380 staff. The company’s machining business is based on the same site and was acquired in 1996. The machining facilities operate 100 CNC (computer controlled) machines and employ 355 staff. The largest foundry, William Lee, located at Dronfield in the Peak District, produces 40k tonnes/year and employs 410 staff. The group produces ductile iron, SG iron, austempered ductile iron (ADI), SiMo and Ni-resist castings up to 45kg in weight. The four disamatic moulding machines and three horizontal green sand moulding machines provide a foundry capacity of 70,000 tonnes per annum.
The strategy is to deliver long term sustainable revenues and achieve higher than average margins. The aim is to achieve this through reinvesting in design and automation processes, increasing their OEM market share and improving the skills of their workforce. This is enabled by a strong balance sheet, currently £36m of net cash, which provides operational flexibility.
Underneath the strategy the company has invested in the latest automation technology to ensure that foundry production can operate at high volume with low batch sizes. Across the year there were 2,500 parts numbers and 250 parts generated over £100k of revenue each. The machine shop is well invested with a lot of automation, although currently running below capacity.
The core focus at Castings is on the heavy truck market which accounts for 71% of production, followed by cars at 11% and a combination of agriculture, rail and wind power accounts for the remaining 18% of production. Geographically, 70% of production is exported to Europe, 24% stays in the UK and 6% heads to the US. The…
