Walsall-based foundry group Chamberlin has warned of a “difficult” 2013 in spite of healthy 15 per cent increase in profits.

The firm, which also has foundries in Walsall, Leicester and Scunthorpe, saw pre-tax profits increase to £815,000 for the six months to September, compared to £710,000 for the same period in 2011.

Revenues were down marginally from £23 million for the first six months of 2011 to £22.6 million.

Chief executive Tim Hair hailed the performance as an encouraging one in difficult times but warned that 2013 would not be “a walk in the park” for anyone in the engineering industry.

Chamberlin’s robust performance was attributed to its commitment to improving operational initiatives, particularly in its foundries and improvement in the management of product profitability backed by upgrades to its business systems.

Mr Hair said: “We were down slightly on sales and I would always prefer to see that going up but with slightly slower sales we made 15 per cent more money – so on balance we are pleased with the results.

Mr Hair said the results were down to “a lot of hard work” to “drive operational efficiencies and improve performance”.

Speaking about a determination to strengthen its management, Mr Hair said: “In our operational areas we have been bringing people from the outside world into our foundries whose expertise is getting the best out of people. They have been bringing problem solving, efficiency improvements and improving our performance.”

Another area has been the development of sales and marketing functions.

“We decided that we needed to have a client focus to the business as well as generating organic growth and filling our capacity,” said Mr Hair. “ We needed to strengthen our teams and in each of our foundries we have added skilled sales and marketing people.

“We now have more people calling on more customers in a more structured way with the aim of doing more business as a result.”

Chamberlin continued to generate strong cash flows (operating cash flow showed a 62 per cent increase to more than £1.53 million) and the firm also announced it would be paying an increased interim dividend of 1.25p (up from 1p in 2011) in December.

Looking forward, Mr Hair said he was optimistic but did not expect things to be easy. “Inevitably 2013 is going to be a difficult year for everybody in the engineering world and Chamberlin is no different,” he said. “We are seeing the same market conditions as everybody else. I’m not trying to overstress that, but 2013 is not going to be a walk in the park for anyone in the engineering industry. But we have got a really good focus on organic growth.

“We are stronger operationally and have marketing teams in place. I am actually rather confident in the medium to long term as they pay off.”

Mr Hair said Chamberlin continued to be bolstered by demand in the automotive sector for its castings for turbochargers, particularly for more efficient petrol engines. Turbocharger castings now account for about a quarter of the company’s business.

Mr Hair added that there were also opportunities in producing heavier castings in worldwide markets.

He said: “There is a lot of work going on there which will hopefully pay off in terms of growth in the non turbocharger part of the business as well.”