Just as its chairman, Brian Cooke said it would, Castings of Brownhills has succeeded in passing last year's jump in its scrap and electricity costs on to its customers.
It has doing so at a time of booming demand for its products, particularly from makers of commercial vehicles --Volvo, Scania and DAF.
The impact on Castings' results for the six months to September has been dramatic.
Profits recovered by 42.5 per cent to £5.42 million, on sales £ 4.87 million higher at £36.38 million.
The interim dividend is raised by a cautious 3.7 per cent to 2.53p, but the shares still jumped 121/2p to 230p amid a perception that a warning in August last year had been one of profit deferred rather than profit lost.
Mr Cooke said that higher prices paid by his customers accounted for £2.5 million of the extra turnover. In volume terms his sales were about ten per cent higher than in the same months last year.
"We have been fairly busy," he said. "We are now recovering a large proportion of the increased cost of our raw materials."
The William Lee subsidiary is now profitable after working through a number of fixed price contracts based on old raw material prices.
Castings is not affected by this week's spike in spot gas prices, Mr Cooke added: "We have got an electricity contract until October next year. We don't use much gas.
"It is surprising with energy prices like they are that business is so good. Car sales are down, but commercial vehicle producers are still fairly busy."
He noted that raw material prices have come back marginally from a peak in November last year and hopes that they will fall to more reasonable levels in the coming months. China's demand for steel seems to have eased, which should be reflected in lower European prices.
Building work has now started on a £2.2 million extension to the machine shop at Brownhills, which should be completed next May.
Mr Cooke expects to spend another £ 4 million to £5 million on machinery for it as and when it is needed over the next two years.
"We have a lot of new work coming on stream," he said. "If you want to grow the business you have to have the facilities to do it."