Home » Reports » Hardman & Co » Chamberlin: Trading update most encouraging
Hardman & Co

Chamberlin: Trading update most encouraging

Chamberlin plc (LON:CMH) recent trading update was most encouraging, considering these challenging times. The company continues to take appropriate operational strategic actions. The group has been financially de-risked, but financial forecasts continue to be inappropriate, given low visibility on business activity.

  • Trading update: Unaudited results for the year to 31 March 2020 were in line with expectations, with sales expected to be £26.1m and a loss before tax of £2.3m. Net debt at 31/03/20 is expected to be £4.6m. Trading in the current year has started well, with sales for the six months to 30/09/20 at £11.0m (down just 15%) and with a loss before tax of £0.6m (£1.8m).
  • 2020/21 forecasts, however, remain unpredictable and inappropriate, given the uncertainty across global markets and industries, especially the automotive industry. The company is benefiting from restructuring initiatives, with a reduced operating cost base. Management remains focused on cash preservation
  • Business developments: The Walsall foundry reopened on 04/05/20, and production levels are now broadly in line with activity seen prior to the impact of COVID-19. The Scunthorpe foundry has remained operational, operating at full production levels. Petrel is still operating at around 60% of normal sales volumes.
  • Risks: Potential risks include developments related to the COVID-19 pandemic, the global automotive industry and Brexit uncertainties. From a financial standpoint, the group has been significantly de-risked, with the recent Exidor disposal proceeds used to reduce the pension scheme deficit and pay down debt.
  • Investment summary: The Chamberlin shares offer the opportunity to invest in a highly cyclical stock. They are, though, likely to tread water at current levels, until significantly brighter prospects become more evident.


Join us on our new LinkedIn page

Follow us on LinkedIn