News blog

Chamberlin

  • BY: Andrew Hore |
  • POSTED: 21/05/2013 |

Chief executive Tim Hair is stepping down from foundries operator Chamberlin.

Hair has turned around the Chamberlin business over the past seven years and he is looking for another turnaround situation. He will stay at Chamberlin until May 2014 or when a replacement is found. Chamberlin is also seeking a new finance director.

Hair is leaving at a time when trading has been difficult. The figures for the year to March 2013 were in line with downgraded expectations and this year will be even tougher. Demand for turbo charger components was weaker than expected and there were downturns in sectors, such as power generation and mining.

In the year to March 2013, revenues slipped from £45.5m to £42.3m with the decline coming in the foundries division. Underlying operating profit fell from £1.7m to £1.3m. The foundries and the security and safety products divisions both reported lower profit with the latter benefiting from one-off stock profits in the previous year. Improved margins and lower overheads helped to limit the decline in profit.

The final dividend is unchanged at 2p a share, with the total for the year rising from 3p a share to 3.25p a share. This dividend is likely to be maintained this year.

Net debt was £981,000 at the end of March 2013. Borrowings may rise by the end of March 2014 because of additional capital spending in order to reduce ongoing costs.

Turbo charger demand is improving. The €/£ exchange rate will put further pressure on profit in 2013-14. House broker Charles Stanley forecasts a further decline in profit to £1.1m this year, recovering to £1.7m in 2014-15. This year’s profit will be second half weighted. 

At 106.5p a share, down 2.5p, Chamberlin is valued at £8.48m.

Download the latest AIM Journal from http://www.hubinvest.com/AIMPDFMay2013_44.pdf

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