Chamberlin PLC Trading Update, New Contract & New Facility (3806Q)

TIDMCMH

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 GBP3.3m 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 GBP1.6m 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

 
 Chamberlin plc (www.chamberlin.co.uk)   T: 01922 
  Kevin Nolan, Chief Executive            707100 
  David Roberts, Finance Director 
 
 Panmure Gordon                          T: 020 
  (Nominated Adviser and Broker)          7886 2500 
  Russell Cook, Peter Steel 
 
 KTZ Communications                      T: 020 
  (Financial PR)                          3178 6378 
  Katie Tzouliadis, Viktoria Langley, 
  Emma Pearson 
 

This information is provided by RNS

The company news service from the London Stock Exchange

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February 29, 2016 02:00 ET (07:00 GMT)