Castings PLC Trading Update (1152I)
March 31 2020 - 1:00AM
UK Regulatory
TIDMCGS
RNS Number : 1152I
Castings PLC
31 March 2020
Castings PLC
Trading Update and Pension Buy-In
Castings PLC announces a trading update in respect of the year
ended 31 March 2020.
We reported in November 2019 that the commercial vehicle sector
was witnessing a decline in order intake in Europe. Therefore, as
expected, we experienced lower output levels at the end of Q3 and
into Q4 from this element of our customer base, which represents
70% of group revenue.
There were indications that demand was increasing slightly
towards the end of Q4. However, the consequence of the COVID-19
outbreak is affecting the truck sector significantly. Many of the
OEMs have recently reported factory closures as a result of labour
shortages and supply chain disruption.
Whilst we have not completely closed either the foundry or
machining operations, we have reduced production levels to reflect
the significantly lower levels of demand. Given the uncertainty of
the situation, it is not currently possible to predict the impact
on the business heading into 2020/21.
Castings PLC further announces an agreement for a bulk annuity
insurance buy-in of the company's two final salary pension schemes
with Aviva Life & Pensions UK Limited ("Aviva") providing
certainty and security for all members of the schemes.
The buy-in, on which was Mercer advised, secures an insurance
asset from Aviva that fully matches, subject to final price
adjustment of the bulk annuity pricing, the remaining pension
liabilities of the schemes.
The buy-in covers the investment, longevity, interest rate and
inflation risks in respect of the schemes and therefore
substantially reduces the pension risk to Castings PLC.
Whilst the final position remains subject to a pricing
adjustment following data and benefit verification, the buy-in
transaction has not required Castings PLC to contribute additional
funding into the schemes. Furthermore, it is anticipated that there
will be a surplus remaining once the data and benefit verification
process has been completed. When the final position is known,
Castings PLC and the trustees of the schemes will agree on the
treatment of any surplus that might exist.
S J Mant
Director and Company Secretary
Castings PLC, Lichfield Road, Brownhills, West Midlands, WS8
6JZ
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END
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