Chamberlin remains positive despite closure of Leicester factory

Engineer Chamberlin said the trading outlook remains positive despite a closure of a factory, as it has invested in new machinery, there is growth in the ironmongery and lighting businesses, and it expects to benefit from the weak pound.

Trading in the first half of the year has been in line with expectations and the investment in a new machining facility in Walsall is expected to generate incremental sales from January 2017.

The AIM-listed company said that it “continues to view prospects for improved performance positively”, due to the new machining capability as well as growth in its Exidor business, a producer of architectural ironmongery, and Petrel, a designer and supplier specialist lighting.

As an exporter of manufactured products it also expects to benefit from the current weak sterling, with the financial impact more evident in the next financial year as the company's pre-Brexit currency hedges unwind.

Production at its foundry in Leicester, which produces mid-size castings, is expected to cease by the end of the year, due to “subdued” demand.

The closure of the foundry is not expected to impact existing market forecasts for underlying profit before tax for the current financial year, as the company's performance is weighted towards the second half.

For the financial year to 31 March, the Leicester foundry will generate £5.9m worth of sales and an underlying profit before tax of £420,000, while in the first half of the current financial year, it generated sales of £1.8m and an underlying profit before tax of about £46,000.

Shares in Chamberlin were down 6.42% to 62.70p at 1107 GMT.