Castings

Website: Castings
Index: Main Market
EPIC: CGS
Supersector: Basic Resources
Sector: Industrial Metals and Mining
Subsector: Iron and Steel
Market Cap: £114.51M
Payout Frequency: Semi-Annual

Castings Dividend Analysis and Summary

Key Dividend Details

Dividend type: Interim
Amount: 4.21p per share (unchanged year-on-year)
Ex-dividend date: 27/11/2025 (derived from the record date)
Record date: 28/11/2025
Payment date: 06/01/2026
Earnings cover (H1 basis): interim DPS 4.21p vs basic EPS 8.58p (~2.0x cover)

Context and Recent Payouts

Dividends paid in the half: £6.2m (final dividend of 14.19p paid earlier in the period).
Prior period comparison: H1 FY24 included a 7.0p supplementary dividend (not repeated this period), hence lower cash returns year-on-year.
Prospective ordinary DPS run-rate for the current year (if unchanged policy): 14.19p + 4.21p = 18.40p.

Dividend Sustainability and Growth Outlook

Earnings support: H1 profit before tax rose to £5.0m; basic EPS 8.58p. The interim 4.21p is well covered (~2.0x), indicating adequate headroom.
Cash flow and balance sheet: Strong operating cash generation in H1 (£15.5m net cash from operations) with net cash of c. £15.5m and minimal lease liabilities, supporting ongoing dividends.
Capital allocation: Significant capex (£9.2m in H1) to commission the new Dronfield foundry line alongside dividends suggests priority on both organic growth and shareholder returns; however, the absence of a supplementary dividend this period points to a more disciplined stance while demand is subdued.
Growth trajectory: Interim DPS held flat; scope for future growth is tied to recovery in heavy-truck volumes and utilization of new capacity. Near-term increases appear cautious rather than aggressive.

Structural or Policy Considerations

New capacity: Commissioning of the Dronfield production line is complete, adding capacity and larger dimensional capability—supportive for medium-term cash generation.
Market backdrop: Some consolidation in the UK larger casting market benefiting orders at Ductile Castings; no M&A, demergers, or share structure changes disclosed.
No stated change to dividend policy; payout remains consistent with prior ordinary levels.

Risks and Flags to Dividend Stability

End-market cyclicality: Heavy-truck exposure (~75% of group revenue) with demand 10–15% below trend in Europe and moderating in the US could pressure earnings if volumes weaken further.
Margin sensitivity: Machining margins have softened (5.4% vs 6.6%), and group margins remain modest; execution on efficiency gains is important to sustain cover.
Capex and returns: Elevated investment phase (new foundry line) precedes full revenue benefits; this may limit scope for specials in the near term.
Other risks: FX, input cost volatility, customer concentration, and operational risks noted; defined benefit schemes are in surplus but still create cash flow movements (advances/repayments).

Dividends Used in Calculation:

Ex-Dividend Date	Payment Date	Type	Amount	Currency
21/11/2024	02/01/2025	Interim	4.21p	GBX
17/07/2025	26/08/2025	Final	14.19p	GBX

Total (Annual Dividends Per Share): 18.40p

Dividend Yield = Annual Dividends Per Share (18.40p) ÷ Share Price (266p) = 6.92%

Ex Dividend Date	Payment Date	Type	Amount	Currency
27/11/2025	06/01/2026	Interim	4.2100p	GBX
17/07/2025	26/08/2025	Final	14.19p	GBX
21/11/2024	02/01/2025	Interim	4.21p	GBX
18/07/2024	23/08/2024	Final	14.19p	GBX
20/06/2024	24/07/2024	Special	7.00p	GBX
23/11/2023	04/01/2024	Interim	4.13p	GBX
20/07/2023	18/08/2023	Final	13.51p	GBX
22/06/2023	26/07/2023	Special	15.00p	GBX
24/11/2022	05/01/2023	Interim	3.84p	GBX
21/07/2022	19/08/2022	Final	12.57p	GBX
23/06/2022	26/07/2022	Special	15.00p	GBX
25/11/2021	06/01/2022	Interim	3.66p	GBX
22/07/2021	23/08/2021	Final	11.69p	GBX
26/11/2020	07/01/2021	Interim	3.57p	GBX

Year

Number of Shares:

Payment	Paid	Amount
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