Castings PLC (LSE:CGS) shares fell 16% after the company warned that profits for the year would come in well below market expectations.
Demand for heavy trucks, which make up most of Castings’ business, had already dropped 20% on the previous year and fell further in the third quarter, though early signs suggest a slight recovery in the final months.
The company’s finances have also been hit by rising electricity costs, with penalties for unused forward-purchased power adding to expenses. Losses from its new Scunthorpe facility have further impacted results, though the site is expected to turn a profit soon.
Despite the tough year, Castings says orders from major customers are picking up, which should boost sales in the next financial year.
The company also highlighted its strong balance sheet, even after significant investment and dividend payouts.
In early trading, the stock was off 46p at 242p.