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Castings PLC (GB:CGS)
LSE:CGS

Castings (CGS) AI Stock Analysis

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GB

Castings

(LSE:CGS)

Rating:71Outperform
Price Target:
Castings PLC maintains a solid financial foundation with robust revenue and profit growth, supported by a strong balance sheet. However, technical indicators suggest a bearish trend, and recent corporate events indicate challenges in demand and profitability. Despite these challenges, the stock's attractive valuation and high dividend yield provide some upside potential.

Castings (CGS) vs. iShares MSCI United Kingdom ETF (EWC)

Castings Business Overview & Revenue Model

Company DescriptionCastings P.L.C. engages in the iron casting and machining activities. It operates through Foundry Operations and Machining Operations segments. The company offers ductile iron, spheroidal graphite iron, austempered ductile iron, SiMo, grey iron, and Ni-resist castings. It also provides fertilising solution annealing, pearlitic quench and temper, temper softening, and austempering heat treatment services; automotive standard e-coat and powder coating, galvanising, plating, gas based surface treatment, and plastic and metal spray coating services; and assembly and insulation services. The company primarily serves the commercial vehicle, automotive, and other markets in the United Kingdom, Sweden, the Netherlands, Germany, rest of Europe, North and South America, and internationally. Castings P.L.C. was founded in 1835 and is based in Brownhills, the United Kingdom.
How the Company Makes MoneyCastings (CGS) generates revenue primarily through the sale of its iron castings and machined components. The company's key revenue streams include contracts with automotive manufacturers and other industrial clients who require custom-engineered metal components. Additionally, Castings benefits from its machining and assembly services, which add value to its core casting operations. Strategic partnerships with automotive and industrial firms help the company maintain a steady flow of orders, while its focus on high-quality production and engineering capabilities ensures competitive positioning in the market.

Castings Financial Statement Overview

Summary
Castings exhibits robust financial performance with strong revenue growth, improved profitability, and a healthy balance sheet with zero debt. The operating cash flow is commendable, though there is a need to maintain free cash flow levels. Overall, it is well-positioned in the industrial goods sector.
Income Statement
85
Very Positive
Castings has demonstrated strong revenue growth over the years, with a notable 11.7% increase from 2023 to 2024. The gross profit margin improved slightly from 19.4% in 2023 to 19.3% in 2024, indicating efficient cost management. The net profit margin also increased from 6.9% to 7.5%, reflecting improved profitability. EBIT and EBITDA margins have shown a positive trajectory, indicating robust operational performance.
Balance Sheet
78
Positive
The company maintains a healthy balance sheet with zero debt, resulting in a favorable debt-to-equity ratio of 0. The return on equity improved from 10.5% in 2023 to 12.5% in 2024, showcasing effective utilization of equity. The equity ratio remains strong at 77%, indicating financial stability and low leverage.
Cash Flow
80
Positive
Operating cash flow increased by 3.5% from 2023 to 2024, supporting the company's ability to generate cash from operations. The free cash flow to net income ratio is healthy, ensuring sufficient cash generation relative to profit. However, the free cash flow decreased slightly by 19.8%, requiring attention to capital expenditure management.
BreakdownTTMMar 2024Mar 2023Mar 2022Mar 2021Mar 2020
Income Statement
Total Revenue202.26M224.41M200.99M148.58M114.70M138.67M
Gross Profit36.98M43.29M38.91M30.48M19.83M29.48M
EBITDA22.77M28.61M25.02M20.62M13.73M21.39M
Net Income12.10M16.72M13.79M8.55M4.15M10.07M
Balance Sheet
Total Assets163.69M174.06M174.43M165.19M157.59M155.68M
Cash, Cash Equivalents and Short-Term Investments16.35M32.53M35.57M35.74M36.09M33.40M
Total Debt1.93M0.000.000.000.000.00
Total Liabilities35.77M40.06M42.77M33.70M28.13M24.02M
Stockholders Equity127.92M133.99M131.66M131.50M129.46M131.66M
Cash Flow
Free Cash Flow-4.41M10.96M13.66M6.02M7.20M14.88M
Operating Cash Flow7.16M20.55M19.86M10.40M12.45M23.04M
Investing Cash Flow-11.03M-8.98M-6.20M-3.97M-3.22M-2.37M
Financing Cash Flow-11.04M-14.61M-13.83M-6.78M-6.53M-13.04M

Castings Technical Analysis

Technical Analysis Sentiment
Positive
Last Price275.00
Price Trends
50DMA
264.98
Positive
100DMA
263.55
Positive
200DMA
269.25
Positive
Market Momentum
MACD
4.02
Positive
RSI
47.52
Neutral
STOCH
50.86
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:CGS, the sentiment is Positive. The current price of 275 is below the 20-day moving average (MA) of 275.40, above the 50-day MA of 264.98, and above the 200-day MA of 269.25, indicating a neutral trend. The MACD of 4.02 indicates Positive momentum. The RSI at 47.52 is Neutral, neither overbought nor oversold. The STOCH value of 50.86 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GB:CGS.

Castings Peers Comparison

Overall Rating
UnderperformOutperform
Sector (67)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
GBRNO
75
Outperform
£181.53M11.2327.26%0.62%-6.48%
74
Outperform
£576.74M29.5716.39%1.73%3.13%24.54%
73
Outperform
£618.76M12.5314.06%4.51%-1.26%6.56%
GBAVG
72
Outperform
£138.98M32.163.87%0.90%14.30%-25.58%
GBCGS
71
Outperform
£117.77M28.233.19%62.83%-10.79%-21.64%
67
Neutral
€8.43B18.556.19%2.63%2.39%-39.55%
60
Neutral
£129.32M45.311.63%7.18%-28.05%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
GB:CGS
Castings
275.00
-75.85
-21.62%
GB:AVG
Avingtrans
420.00
51.88
14.09%
GB:GDWN
Goodwin
7,660.00
-327.23
-4.10%
GB:MPAC
Mpac Group PLC
430.00
-66.00
-13.31%
GB:MGAM
Morgan Advanced Materials
220.00
-74.12
-25.20%
GB:RNO
Renold plc
80.20
21.54
36.72%

Castings Corporate Events

Business Operations and Strategy
Ameriprise Financial Increases Stake in Castings PLC
Neutral
Feb 28, 2025

Castings PLC, a UK-based company, has experienced a change in its shareholder structure. Ameriprise Financial, Inc., through its subsidiary Threadneedle Asset Management Limited, has increased its voting rights in Castings PLC to 15.078% as of February 26, 2025. This change signifies a notable shift in the company’s shareholder dynamics, potentially impacting its strategic decisions and stakeholder interests.

Business Operations and Strategy
Aberforth Partners LLP Increases Stake in Castings PLC
Neutral
Feb 27, 2025

Castings PLC, a company in the manufacturing sector, has announced a change in its major holdings. Aberforth Partners LLP, based in London, UK, has increased its voting rights in Castings PLC from 14.14% to 15.32% as of February 26, 2025. This acquisition of voting rights signifies a strategic move by Aberforth Partners LLP, potentially impacting the company’s governance and decision-making processes.

Regulatory Filings and Compliance
Ameriprise Financial Alters Stake in Castings PLC
Neutral
Feb 20, 2025

Ameriprise Financial, Inc., a US-based financial services firm, has adjusted its holdings in Castings PLC, crossing a significant threshold on February 17, 2025. This change, where Ameriprise’s voting rights in Castings have decreased from 15.495% to 14.664%, may impact the company’s shareholder dynamics and influence its decisions in the market.

Business Operations and StrategyFinancial Disclosures
Castings PLC Faces Profitability Challenges Amid Demand Fluctuations
Negative
Feb 18, 2025

Castings PLC has announced a trading update for the year ending March 31, 2025, indicating a drop in demand for heavy trucks, which make up 75% of its revenue, leading to lower than expected profitability. The company also faced increased power costs due to unused electricity volumes and incurred start-up costs from a new business in Scunthorpe. However, improvements are anticipated with the Scunthorpe business expected to turn profitable and increased sales orders from major customers likely to boost sales volumes in the next financial year. The company’s balance sheet remains strong despite significant investments and dividends.

M&A TransactionsBusiness Operations and Strategy
Ameriprise Financial Acquires Significant Stake in Castings PLC
Neutral
Feb 10, 2025

Castings PLC, a UK-based company, has announced a significant change in its shareholder structure. Ameriprise Financial, Inc., a financial services company headquartered in Minneapolis, USA, now holds 15.495% of the voting rights in Castings PLC through its subsidiary, Threadneedle Asset Management Limited. This acquisition indicates a strategic investment by Ameriprise Financial, potentially impacting Castings PLC’s future decisions and market positioning.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Apr 21, 2025