Castings PLC (CGS), the West Midlands-based manufacturer of iron castings and machined components, reported a sharp fall in profit before tax to £2.0 million for the six months ended 30 September 2026, down from £5.0 million in the equivalent period a year earlier. Revenue declined modestly to £85.9 million from £87.6 million, with management attributing the profit deterioration primarily to a power outage at its William Lee foundry site caused by a Northern Powergrid transformer fault. The company stated that management anticipates the full-year result to be in line with recently revised market expectations, with the analyst consensus prior to this announcement standing at an adjusted profit before tax of £9.0 million for the financial year ending 31 March 2027.

Key Points

  • Castings PLC (CGS) — iron castings manufacturer and machining operator based in Brownhills, West Midlands
  • Profit before tax fell to £2.0 million for the six months ended 30 September 2026, down from £5.0 million in the prior-year period
  • Northern Powergrid transformer fault restricted power supply by approximately 50% at William Lee for two months; full power restored 24 May 2026
  • Interim dividend maintained at 4.21 pence per share, payable 8 January 2027; investors will watch H2 recovery as customer arrears are cleared

Northern Powergrid Transformer Fault Cuts William Lee Production by 50% for Two Months

The announcement states that a restriction of approximately 50% in external power supplied by Northern Powergrid to the William Lee site was the primary cause of the group's earnings decline. The transformer was repaired and full power restored on 24 May 2026, but the two-month outage forced premium-rate shifts and express transport costs to protect customer supply. The foundry segment reported a profit of just £0.2 million, against £4.0 million in the equivalent period last year, representing a segmental margin of 0.3% compared with 4.6% previously. The announcement notes that a large proportion of customer order arrears remained outstanding at 30 September 2026 and are expected to be eliminated during the second half of the financial year.

CNC Speedwell Machining Division Delivers Stronger Margins Amid Foundry Disruption

Whilst the foundry segment bore the brunt of the power outage, the group's CNC Speedwell machining operation delivered a notably improved performance. Total revenue at CNC Speedwell rose 3.0% to £15.7 million, with the division reporting a profit of £1.4 million compared with £0.8 million in the prior-year period. The margin on total sales increased from 5.4% to 8.8%. The announcement states that £1.3 million was invested in replacing older machines with more technologically advanced machining centres and in adding a second solar panel installation to existing buildings, suggesting the company is pursuing both efficiency and energy resilience at this site.

New William Lee Foundry Line Expands Dimensional Capability for Wind Energy and Truck Electrification

Despite delays caused by the power outage, Castings reports that its recently commissioned foundry production line at William Lee is now operational. The announcement states that the enhanced casting dimension capability allows the group to quote for and win work previously outside its scope, with management identifying wind energy and truck electrification as new growth markets. Heavy trucks represent approximately 70% of group revenue, and OEMs have indicated a 10% increase in the European market in the first half of calendar year 2026. The Ductile Castings business in Scunthorpe continued to trade profitably with an expanding customer list, further broadening the group's reach into power generation and infrastructure.

Castings PLC Maintains 4.21p Interim Dividend With £13.2m Cash on Balance Sheet

The group's balance sheet remained robust despite the half-year profit pressure. Cash and cash equivalents stood at £13.2 million as at 30 September 2026, compared with £15.5 million a year earlier, with the announcement noting the reduction occurred after a dividend payment of £6.2 million. Basic earnings per share fell to 3.48 pence from 8.58 pence in the prior-year period. The board has declared an interim dividend of 4.21 pence per share, unchanged from the prior year, payable on 8 January 2027 to shareholders on the register at 27 November 2026. Simon Bourne, chief executive of Marshalls PLC, was appointed as a non-executive director with effect from 5 November 2026.