REG - Castings PLC - Trading Update

CastingsAnnouncement

31/03/2020 07:01

RNS Number : 1152I
  
Castings PLC
  
31 March 2020
  
 

Castings PLC
Trading Update and Pension Buy-In
 
Castings PLC announces a trading update in respect of the year ended 31 March 2020.
 
We reported in November 2019 that the commercial vehicle sector was witnessing a decline in order intake in Europe. Therefore, as expected, we experienced lower output levels at the end of Q3 and into Q4 from this element of our customer base, which represents 70% of group revenue.
 
There were indications that demand was increasing slightly towards the end of Q4. However, the consequence of the COVID-19 outbreak is affecting the truck sector significantly. Many of the OEMs have recently reported factory closures as a result of labour shortages and supply chain disruption.
 
Whilst we have not completely closed either the foundry or machining operations, we have reduced production levels to reflect the significantly lower levels of demand. Given the uncertainty of the situation, it is not currently possible to predict the impact on the business heading into 2020/21.
 
Castings PLC further announces an agreement for a bulk annuity insurance buy-in of the company's two final salary pension schemes with Aviva Life & Pensions UK Limited ("Aviva") providing certainty and security for all members of the schemes. 
 
The buy-in, on which was Mercer advised, secures an insurance asset from Aviva that fully matches, subject to final price adjustment of the bulk annuity pricing, the remaining pension liabilities of the schemes. 
 
The buy-in covers the investment, longevity, interest rate and inflation risks in respect of the schemes and therefore substantially reduces the pension risk to Castings PLC.
 
Whilst the final position remains subject to a pricing adjustment following data and benefit verification, the buy-in transaction has not required Castings PLC to contribute additional funding into the schemes. Furthermore, it is anticipated that there will be a surplus remaining once the data and benefit verification process has been completed. When the final position is known, Castings PLC and the trustees of the schemes will agree on the treatment of any surplus that might exist.
 
S J Mant
Director and Company Secretary
Castings PLC, Lichfield Road, Brownhills, West Midlands, WS8 6JZ  


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