Castings – exceptional levels of demand…causes problems!
The manufacturer of spheroidal graphite iron castings to a variety of manufacturing industries has come out with an unusual IMS. This is a terrific little business (15%+ operating margins) so we are prepared to forgive a few short term slip-ups!
Sales for the six months ended 30 September 2013 were £65.9m (2012 - £60.4m) with profit before tax of £9.57m (2012 - £9.11m). During the period the company experienced exceptional levels of demand mainly from our commercial vehicle customers, with short term delivery requirements. Regrettably this caused certain inefficiencies in their operations and also logistics problems resulting in excessive cost. They also had to recruit new employees at short notice adding to short term costs The increase in demand was apparently caused by pre-buy of commercial vehicles before the end of 2013. In the New Year only Euro 6 exhaust…