Announcement
Chamberlin PLC : Trading Update New Contract & New Facility
RNS Number : 3806Q
Chamberlin PLC
29 February 2016
29 February 2016
AIM: CMH
Chamberlin plc
("Chamberlin" or "the Group" or "the Company")
Trading Update,
Major New Contract
&
New Investment in Machining Capability
Chamberlin plc (AIM: CMH.L), the specialist castings and engineering group, is pleased to provide an update on trading for the financial year ending 31 March 2016. In addition, the Company announces the award of a major new automotive contract and a significant new initiative to launch the Group's integrated machining capabilities.
Results for the full year are expected to show underlying profit before tax ahead of current market expectations on slightly lower revenues. This is despite the continued slowdown in the Group's core markets, including the automotive, steel and oil & gas sectors, and reflects the benefits of a material construction vehicle contract which completed in the current financial year as well as a satisfactory performance from the Group's engineering operations.
The Board is pleased to report a major new automotive contract win worth an additional £3.3m of sales per annum. The initial benefits of the new contract will be felt in the second half of the financial year to 31 March 2017, with production volumes coming on stream more fully thereafter. The contract is also strategically important as it marks the commencement of the Group's supply of turbo charger bearing housings which are fully machined in-house.
To support Chamberlin's move into fully machined components, a new machining facility will be established with an initial £1.6m of investment. This will be funded through a Regional Growth Fund grant and new debt facilities from HSBC and production at the new facility is scheduled to commence in early 2017. The facility, when complete, will position the Group as the only fully integrated supplier of grey iron bearing housings in Europe and is expected to open up significant new long term growth opportunities for the Group.
Results for the year are expected to be announced towards the end of May when a further update on trading will be provided.
Chairman, Keith Butler-Wheelhouse said:
"While trading conditions remain challenging, the business is making good progress. This reflects the management's focus on cost efficiencies, improving processes and new business initiatives as we continue to target profitable revenue growth.
The major new automotive contract win we are announcing today is an important development for our foundry operations at Walsall and we are now committing significant investment to develop our machining capability to support this exciting long term growth opportunity.
This new contract also demonstrates Chamberlin's ability to delivery of a world class product at a competitive cost and, following our investment, the Group will be positioned as the only fully integrated supplier of grey iron bearing housings in Europe."
Enquiries
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Chamberlin plc (www.chamberlin.co.uk) Kevin Nolan, Chief Executive David Roberts, Finance Director |
T: 01922 707100
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Panmure Gordon (Nominated Adviser and Broker) Russell Cook, Peter Steel |
T: 020 7886 2500 |
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KTZ Communications (Financial PR) Katie Tzouliadis, Viktoria Langley, Emma Pearson |
T: 020 3178 6378 |
This information is provided by RNS
The company news service from the London Stock Exchange
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