Publication of Audited Accounts and Trading Update

RNS Number : 9290L

Chamberlin PLC

16 September 2021

 

Chamberlin plc

(the "Company" or Group")

Publication of Audited Accounts and Trading Update

Chamberlin plc (AIM: CMH.L), the specialist castings and engineering group, provides the following update.

Summary

· Company expects to publish audited accounts in late November 2021;

· Revenue of £26 million and loss of not less than £4.0 million (unaudited) for the 14 month period ended 31 May 2021 in line with management's expectations; and

· Encouraging start to current financial year; leading to expectation of stronger levels of sales growth and return to profitability in second half of year.

2021 Accounts

The COVID-19 pandemic has significantly impacted the availability of sufficient resources to support the audit timetable, compounded further by the change in the auditor and a new management team, following the re-structuring of the Company. Further to the announcement dated 14 May 2021, the Company now expects to publish its audited accounts for the 14 month period ended 31 May 2021 ("2021 Accounts"), in late November 2021. 

The Board has previously indicated that the outturn for the period to 31 May 2021 will show a loss and the Board expects this to be not less than £4.0 million, on turnover for the period of £26 million, including sales of £7.5 million to BorgWarner (unaudited) (prior to loss of the BorgWarner contract). This loss contains the majority of the restructuring and rationalisation costs necessary to stabilise the Group for the future.

Current Trading

The Board is pleased to report the following trading update. The current financial year has started well with Group sales for the first quarter in line with management's expectations. Net debt at 31 August 2021, including asset leases of £1.9 million, was reduced to £3.0 million (unaudited) (30 September 2020: £4.6 million) and current cash headroom is comfortably in line with management expectations at £1.1 million. The Company has commenced a review of the use of its substantial property assets with the objective of strengthening the balance sheet and improving operational and investment returns from Group resources.

The Board expects sales for the remainder of the first half of the current financial year ending 30 November 2021, to be at least in line with management's expectations but now anticipate stronger levels of sales growth and profitability in the second half of the year resulting in an expected earnings per share for the current financial year ending 31 May 2022 of not less than 1p.

The COVID-19 pandemic continues to present global challenges to trading conditions, including escalating raw material costs, supply chain shortages and a slowdown in the automotive industry due to widely publicised electronic control unit (ECU) availability. In response to these challenges, the management team continues to reduce costs, improve efficiencies, and optimise pricing to improve margins and restore sustainable profitability to the Group. 

The new Board has implemented a strategy to adapt to these changing conditions and the Company is directing resources to new product lines to rapidly reduce reliance on the automotive industry. The Board's aim over the medium term is to replace the majority of the Group's traditional, low margin contract-based production, with much higher margin, premium consumer products in markets with a strong opportunity for growth and where the Group can innovate, control distribution and sales to effect real and sustainable growth in revenue and profits.

Launch of "Emba" brand

The Company is making excellent progress with the development of its premium quality cast iron cookware - the Emba Cookware Range and expects to officially launch its initial product range on-line in November 2021. The rising popularity for premium quality, high value cast iron cookware is growing rapidly in the UK and the Board expects Chamberlin's Emba brand to be at the forefront of this market as the only true UK based designer and manufacturer.

Iron Foundry Weights

Iron Foundry Weights, Chamberlin's new trading name for its specialist home and commercial gym equipment business, is developing rapidly. October 2021 will see the release of its new range of precision machined "indestructible" dumbbells, with our unique "Shrink-Fit" assembly technology. The Company has recently signed an endorsement agreement with Lauren Recci, British Powerlifting Champion, and the Company will be show casing its new product range at The Arnold Sports Festival 2021.

Petrel

Petrel, Chamberlin's specialist lighting business, is trading profitably and exceeding the Board's expectations with a very strong start to the year. Petrel's performance in the second half of the year will be improved further by the commencement of a new venture into specialist lighting hire, which will commence next month. Petrel will be the only UK manufacturer of hazardous/harsh area lighting to offer a direct-to-market hire service when it launches in October 2021.

Russell Ductile Castings

The Company's Scunthorpe foundry operation continues to operate at, or near, full production levels in response to growing customer demand. Costs are being managed closely and operating profit is expected to exceed management expectations for the quarter ended 31 August 2021.

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014 as it forms part of United Kingdom domestic law by virtue of the European Union (Withdrawal) Act 2018.

Enquiries:

Chamberlin plc Kevin Price, Chief Executive Alan Tomlinson, Finance Director		T: 01922 707100
Cenkos Securities plc (Nominated Adviser and Joint Broker) Katy Birkin Stephen Keys		T: 020 7397 8900
Peterhouse Capital Limited (Joint Broker) Lucy Williams Duncan Vasey		T: 020 7469 0930

 

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