for the year ended 31 March 2025
Stock Code: CGS
Castings P.L.C.
Castings P.L.C.
An Introduction
to Castings P.L.C.Castings P.L.C. is a market-leading iron casting and machining group based in the UK supplying both the domestic and export markets.
Our continued strength is largely as a result of our investment in the latest technologies and manufacturing processes. Maintaining an ungeared balance sheet provides investment flexibility, enabling us to fully capitalise on commercial opportunities to generate strong returns for the benefit of shareholders, customers and employees alike.
Castings P.L.C. Annual Report for the year ended 31 March 2025
Contents
Strategic ReportFinancial Highlights 02
Chairman's Statement 03
Group Overview and Strategy 04
Business Model 05
Business and Financial Review 06
Principal Risks and Uncertainties 08
Environmental, Social and Governance 12
Viability Statement 18
S172(1) Statement 19
Corporate GovernanceBoard of Directors 20
Directors' Report 21
Corporate Governance 24
Audit and Risk Committee Report 26
Directors' Remuneration Report
Annual Statement 27
Remuneration Policy 28
Annual Report on Directors' Remuneration 30
Statement of Directors' Responsibilities 33
Independent Auditor's Report 34
Financial StatementsConsolidated Statement of Comprehensive Income 39
Consolidated Balance Sheet 40
Consolidated Cash Flow Statement 41
Consolidated Statement of Changes in Equity 42
Notes to the Consolidated Financial Statements 43
Five Year Financial History 61
Parent Company Balance Sheet 62
Parent Company Statement of Changes in Equity 63
Notes to the Parent Company Financial Statements 64
Company InformationNotice of Meeting 70
Directors, Officers and Advisers 73
Shareholder Information 74
Castings P.L.C. Annual Report for the year ended 31 March 2025 01
Castings P.L.C.
Financial HighlightsGroup revenue (£m)
£177m
149
201
224
177
(2024: £224m)
2025
2024
2023
2022
Foundry sales volume (tonnes)
41,000
49,800
50,450
53,100
41,000
(2024: 50,450)
2025
2024
2023
2022
Revenue ProfileGeographical revenue split
Profit before tax (£m)
£5.6m
12.1
16.7
21.3
5.6
(2024: £21.3m)
2025
2024
2023
2022
EPS
(basic)
9.60p
19.60
31.66
38.45
9.60
(2024: 38.45p)
2025
2024
2023
2022
Customer sector profile
Cash generated from operating activities (£m)
£12.3m
12.9
22.4
21.6
12.3
(2024: £21.6m)
2025
2024
2023
2022
Dividend per share (excluding supplementary dividend) (pence)
18.40p
16.23
17.35
18.32
18.40
(2024: 18.32p)
2025
2024
2023
2022
Capital expenditure (£m)
£13.2m
4.4
6.2
10.5
13.2
(2024: £10.5m)
2025
2024
2023
2022
02
Castings P.L.C. Annual Report for the year ended 31 March 2025
Strategic Report
Chairman's Statement OverviewDemand from our heavy truck customers, which make up over 75% of group revenue, was at a reduced level compared to the very strong levels of the previous year. These OEMs have been reporting a normalisation of demand throughout the year and this has naturally fed through to reduced schedules being placed on us. The reduction in schedules worsened during the first three quarters but recovered somewhat during the final quarter
The European market, which comprises nearly three-quarters of our revenue, was reduced generally but particularly in Germany and truck manufacturers with a greater exposure to this market were impacted more heavily. Demand from the US was strong in the first half of the year but this also declined as the year progressed and especially so
in the last quarter with greater political and economic uncertainty in the region.
Turnover decreased by 21% compared with the previous year and operating profit
reduced by 76%. The despatch weight fell by 19% compared to the prior year.
The year saw a significant increase in electricity costs as a direct result of lower customer demand. As a consequence of consuming less electricity, penalties were enforced on forward purchased electricity volumes that were not required. The total of these penalties was £1.5 million, which includes a provision for the period up to the
end of the contract in September 2025. The forward volumes purchased from October 2025 onwards have been restricted and no further financial loss is anticipated for these periods.
In June 2024 the group purchased the fixed assets and stock from the administrators of a business making large iron castings (up to 7 tonnes) in Scunthorpe. The purchase represented an opportunity to supply
products and customers that were new to the group. It also enables us to offer our existing customers a broader product range.
The Scunthorpe business, which traditionally supplies the capital goods market, is more exposed to spot-orders which creates greater short-term demand variability compared to the other foundries in the group. Whilst the initial level of demand following the purchase was high, this subsequently reduced during the second half of the financial year.
The overall loss during the nine months of operation was £1.3 million, although this does include £0.4 million of set-up costs to re-establish the business following a period of underinvestment. The business is now established and generating orders for new products from new customers as well as having re-established existing customer relationships.
Foundry businessesDemand was down by nearly 20% on a sales weight basis (like-for-like) compared to the high levels of the previous year. This
reduction has negatively impacted production efficiencies in these businesses during the year. The impact of the electricity penalties also affects the foundries to a much greater extent than the machining business due to the greater levels of consumption.
Last year the board approved the installation of an additional foundry production line at our William Lee site. We are nearing the end of the installation phase of the project and commissioning is expected to be complete later in the summer. The project is in line with budget. The new production line will add up to 12,000 tonnes of additional gross foundry
capacity which represents a 15% increase on the group's current capacity. The additional facility will enable us to take advantage of new and growing market areas such as wind energy, agriculture and further opportunities in the US as well as satisfying additional demand from our existing customer base.
CNC SpeedwellIt is pleasing to report a solid performance in the machining business against the backdrop of lower demand levels.
Investment has been focussed on replacing older equipment with more efficient machines in line with our on-going replacement programme.
OutlookThe schedules from our heavy truck customers suggest that the current lower levels of demand will continue in the short-term with improvements in the autumn.
The new foundry line can produce parts with slightly larger dimensions, thus providing the opportunity to quote for work that would have previously been outside of our scope. This will result in incremental business. The facility in Scunthorpe then allows for significantly larger castings to be supplied to existing and new customers.
At the time of writing, with the nature of the parts we supply, we do not consider the changes to tariffs to be a significant issue to our existing business in the US.
As is well reported, the UK has the highest energy prices relative to our overseas competition, on top of which the
Government's decision to increase national insurance is a considerable burden for UK manufacturers. These issues impact on our competitive position. The group continues to invest in productivity and efficiency measures to try to mitigate these challenges.
We will continue to develop opportunities with existing customers in areas such as the electrification of lighter trucks and build relationships in other markets such as wind energy, agriculture and in the US.
DividendThe directors have considered carefully the outlook described above and the strong balance sheet, even after significant capital investment during the year, and have decided to recommend the payment of a final dividend at the same level as last year. Accordingly the directors are recommending the payment of
a final dividend of 14.19 pence per share to be paid on 26 August 2025 to shareholders on the register on 18 July 2025. This, together with the interim dividend, gives a total dividend for the year of 18.40 pence per share.
DirectorsAs part of our succession planning, Stephen Harrison was appointed to the board as a non-executive director on 26 September 2024. Having been CEO of Forterra plc and currently non-executive chairman of Epwin Group plc and Tungsten West plc, Stephen brings significant relevant experience to the group.
I would like to thank Andrew Eastgate, who is not seeking re-election at the AGM, for his outstanding contribution to the board over the last seven years. Andrew will retire as a non-executive director on 26 August 2025.
I also wish to thank the directors, senior management and all of our employees for their hard work and commitment during the year.
A. N. Jones
Chairman
11 June 2025
03
Castings P.L.C. Annual Report for the year ended 31 March 2025
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