Castings Plc swings to loss but will pay dividend

Castings shares (LON: CGS) fell on Friday as the group swung to an interim loss.

In the group’s half-year report, the metals fabricator reported a loss before tax of £0.63m – compared to the £7.34m profit a year earlier.

The company said in a statement that demand had been “significantly impacted” amid the pandemic.

Output fell by approximately 80% during the first two months of the period as the commercial vehicle sector, which represents 70% of group revenue, closed production facilities.

In the six months to September 30, sales plunged by 43% to £41m.

There continues to be uncertainty, however, the current heavy-truck schedules are suggesting that trading is returning to pre-pandemic levels.

“The group has been successful in obtaining a number of new projects with our European truck customers that will commence production in 2021/22 and 2022/23. In addition to replacement work, these projects include additional platform volumes and also more value-add product solutions,” said the group in a statement.

“The group maintains a strong balance sheet with cash levels of £35.2 million; an increase of £1.8 million during the period after the dividend payment of £5.0 million.”

Despite the disruption, the group is said it will pay a dividend. An interim dividend of 3.57 pence per share has been declared and will be paid on 7 January 2021 to shareholders.

Castings shares (LON: CGS) are currently trading -2.66% at 324,14 (0857GMT). In the year-to-date, shares in the group have fallen from highs of 443,76.