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Highlights

  • CGS’ revenue decreased by 19.9% YoY, from GBP 111.33 million in H1FY24 to GBP 89.18 million in 1HFY25
  • Profit before income tax declined by 59.9% YoY, from GBP 10.25 million in H1FY24 to GBP 4.11 million in H1FY25
  • The company plans to increase its customer reach at the larger casting facility and explore offshore energy, agriculture, and rail markets

Castings PLC (LSE:CGS) is a UK-based, FTSE-listed company specializing in iron castings and machining operations. It operates two foundries: Castings P.L.C. in Brownhills and William Lee Limited in Dronfield.

In the first half of fiscal year 2025 (H1FY25), CGS’ revenue decreased by 19.9% YoY, from GBP 111.33 million in H1FY24 to GBP 89.18 million. This decline was primarily driven by a slowdown in demand for heavy trucks, which account for 75% of total revenue. OEMs adjusted their production schedules, leading to reduced sales and contributing to the revenue drop.

Profit before income tax also saw a significant decline of 59.9% YoY, from GBP 10.25 million in H1FY24 to GBP 4.11 million in H1FY25. This drop was due to the reduction in sales and an 18.4% decrease in foundry output, which affected operational efficiency. Additionally, the profit margin of the foundry segment fell sharply from 7.0% to 2.7%, further impacting overall profitability.

Recent Business Update

On 18 February 2025, CGS released a trading statement for FY25, highlighting several key developments. The demand for heavy trucks, which constitutes 75% of the company’s revenue, experienced a 20% year-over-year decline, with additional decreases anticipated in Q3FY25. Profitability was further impacted by rising electricity costs, driven by penalties from forward-purchased energy and start-up losses at the Scunthorpe facility. However, the company noted that major customers have reported a rise in sales orders, which is expected to increase Castings' volumes in the early part of FY26.

Company Outlook

As per the company, demand for heavy trucks is still low. However, production efficiencies should improve in the second half as operations adapt to lower volumes. If demand stays stable, the company expects to meet market expectations. In the medium term, growth opportunities include expanding in the US with a new warehouse. The company also plans to increase its customer reach at the larger casting facility and explore offshore energy, agriculture, and rail markets.

Top 10 Shareholders

The top 10 shareholders of CGS collectively own approximately 64.02% of the company’s total shares. Columbia Threadneedle Investments (UK) holds the largest stake with around 14.66%, followed closely by Aberforth Partners LLP with a shareholding of about 14.14%, as shown in the chart below.

Stock Information

CGS' stock price has experienced a decline of approximately 17.30% over the past six months. The stock's 52-week high stands at GBX 396.67, while the 52-week low is GBX 224.00. Currently, the stock is trading below the average of the 52-week high-low range.

Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference data for all price data, currency, technical indicators, support, and resistance levels is 25 February 2025. The reference data in this report has been partly sourced from EODHD/Others.

 Technical Indicators Defined

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.