Half Year Results

RNS Number : 7621W

Castings PLC

25 November 2010

 



Interim Management Report

Profit before tax after exceptional items for the six months ended 30^th September 2010 was £5.12m compared to £1.89m for the same period last year.

Sales for the period April to September 2010 were £44.6m compared to £26.0m for the same period last year. 

It is pleasing to report that sales have recovered at a rapid rate during this reporting period and we are now operating at about 90% of previous high levels.

The increases have been achieved by the recovering fortunes of the heavy vehicle production in Europe, through increased worldwide sales.  We anticipate this increase will continue at a much slower rate throughout 2011.  It is also pleasing to report new work has been obtained for our machining company CNC Speedwell from new and existing customers.  We are seeing the benefit of our considerable capital investment in CNC now that volumes are increasing.

The new foundry at William Lee is operating on a limited basis and it is expected new business will result in increasing output in the future.

It is hoped, provided there is no reported 'double dip' in the economy, that the full year results will show a recovery towards our previous levels.

An interim dividend of 2.71 pence per share has been declared and will be paid on 7^th January 2011 to shareholders who are on the register at 10^th December 2010.

Principal risks and uncertainties

There are a number of potential risks and uncertainties which could have a material impact on the group's performance over the remaining six months of the financial year and could cause actual results to differ materially from expected and historical results.  The directors do not consider that the principal risks and uncertainties have changed since publication of the annual report for the year ended 31^st March 2010.  A detailed explanation of the risks relevant to the group is on pages 8 and 9 of the annual report.

Cautionary statement

This Interim Management Report ("IMR") has been prepared solely to provide additional information to shareholders to enable them to assess the group's strategies and the potential for those strategies to succeed.  The IMR should not be relied on by any other party or for any other purpose.

This IMR contains certain forward-looking statements.  These are made by the directors in good faith based on the information available to them up to the time of their approval of this report but such statements should be treated with caution due to the inherent uncertainties, including both economic and business risk factors, underlying any such forward-looking information.

The group undertakes no obligation to update any forward-looking statements whether as a result of new information, future events or otherwise.

The IMR has been prepared for the group as a whole and therefore gives greater emphasis to those matters which are significant to Castings plc and its subsidiary undertakings when viewed as a whole.

By order of the board:

BRIAN J. COOKE

Chairman

25th November 2010

Castings p.l.c.                                                                               

Lichfield Road

Brownhills

West Midlands

WS8 6JZ

Consolidated Statement of Comprehensive Income

For six months ended 30^th September 2010

(Unaudited)

	Half year to		Half year to		Year to
	30th September		30th September		31st March
	2010		2009		2010
	£'000		£'000		£'000
Revenue	44,598		25,969		60,649
Cost of sales	(34,020)		(19,911)		(45,523)
Gross profit	10,578		6,058		15,126
Distribution costs	(673)		(326)		(769)
Administrative expenses
Excluding exceptional items	(4,852)		(4,325)		(4,896)
Exceptional	-		435		204
Total administrative expenses	(4,852)		(3,890)		(4,692)
Profit from operations	5,053		1,842		9,665
Finance income	69		49		139
Profit before income tax	5,122		1,891		9,804
Income tax expense	(1,434)		(529)		(2,166)
Profit for the period attributable to the equity holders of the parent company	3,688		1,362		7,638
Other comprehensive expense for the period:
Change in fair value of available for sale financial assets	(22)		66		68
Actuarial losses on defined pension schemes	-		-		(4,466)
Tax effect of gains and losses recognised directly in equity	6		(18)		681
Total other comprehensive (expense)/income for the period (net of tax)	(16)		48		(3,717)
Total comprehensive income for the period attributable to the equity holders of the parent company	3,672		1,410		3,921
Earnings per share attributable to the equity holders of the parent company
Basic and diluted	8.45p		3.12p		17.51p

Consolidated Balance Sheet

30^th September 2010

(Unaudited)

	30thSeptember		30thSeptember		31stMarch
	2010		2009		2010
	£'000		£'000		£'000
ASSETS
Non-current assets
Property, plant and equipment	53,622		51,800		51,596
Financial assets	452		475		480
	54,074		52,275		52,076
Current assets
Inventories	9,743		6,137		7,818
Trade and other receivables	20,590		14,743		19,149
Cash and cash equivalents	14,763		14,068		14,718
	45,096		34,948		41,685
Total assets	99,170		87,223		93,761
LIABILITIES
Current liabilities
Trade and other payables	18,726		10,448		14,671
Current tax liabilities	1,384		531		568
	20,110		10,979		15,239
Non-current liabilities
Deferred tax liabilities	5,334		4,338		5,287
	5,334		4,338		5,287
Total liabilities	25,444		15,317		20,526
Net assets	73,726		71,906		73,235
Equity attributable to equity holders of the parent company
Share capital	4,363		4,363		4,363
Share premium account	874		874		874
Other reserve	13		13		13
Retained earnings	68,476		66,656		67,985
Total equity	73,726		71,906		73,235

Consolidated Cash Flow Statement

For six months ended 30^th September 2010

(Unaudited)

	Half year to		Half year to		Year to
	30thSeptember		30thSeptember		31stMarch
	2010		2009		2010
	£'000		£'000		£'000
Cash flows from operating activities
Profit before income tax	5,122		1,891		9,804
Adjustments for:
Depreciation (net of profit on sale of property, plant & equipment)	2,390		2,193		4,482
Interest received	(69)		(49)		(139)
Excess of employer pension contributions over income statement charge	-		-		(4,466)
(Increase)/decrease in inventories	(1,925)		1,264		(417)
(Increase)/decrease in receivables	(1,853)		(889)		(4,884)
Increase/(decrease) in payables	4,055		(2,160)		2,063
Net cash generated from operating activities	7,720		2,250		6,443
Tax paid	(155)		(289)		(652)
Interest received	69		49		139
Net cash generated from operating activities	7,634		2,010		5,930
Cash flows from investing activities
Purchase of property, plant and equipment	(4,428)		(585)		(2,721)
Proceeds from disposal of property, plant and equipment	2		-		51
Proceeds from disposal of financial assets	18		20		17
Net cash used in investing activities	(4,408)		(565)		(2,653)
Cash flow from financing activities
Dividends paid to shareholders	(3,181)		(3,181)		(4,363)
Net cash used in financing activities	(3,181)		(3,181)		(4,363)
Net increase/(decrease) in cash and cash equivalents	45		(1,736)		(1,086)
Cash and cash equivalents at beginning of period	14,718		15,804		15,804
Cash and cash equivalents at end of period	14,763		14,068		14,718

Consolidated Statement of Changes in Equity

(Unaudited)

	Equity attributable to equity holders of the parent
	Share capital		Share premium		Other reserve		Retained earnings		Total equity
	£'000		£'000		£'000		£'000		£'000
At 1st April 2010	4,363		874		13		67,985		73,235
Total comprehensive income for the period ended 30th September 2010	-		-		-		3,672		3,672
Dividends	-		-		-		(3,181)		(3,181)
At 30th September 2010	4,363		874		13		68,476		73,726
	Equity attributable to equity holders of the parent
	Share capital		Share premium		Other reserve		Retained earnings		Total equity
	£'000		£'000		£'000		£'000		£'000
At 1st April 2009	4,363		874		13		68,427		73,677
Total comprehensive expense for the period ended 30th September 2009	-		-		-		1,410		1,410
Dividends	-		-		-		(3,181)		(3,181)
At 30th September 2009	4,363		874		13		66,656		71,906
	Equity attributable to equity holders of the parent
	Share capital		Share premium		Other reserve		Retained earnings		Total equity
	£'000		£'000		£'000		£'000		£'000
At 1st April 2009	4,363		874		13		68,427		73,677
Total comprehensive income for the year ended 31st March 2010	-		-		-		3,921		3,921
Dividends	-		-		-		(4,363)		(4,363)
At 31st March 2010	4,363		874		13		67,985		73,235

Notes

1.   GENERAL INFORMATION

Castings plc (the "Company") is a company domiciled in England.  The condensed consolidated interim financial statements of the Company for the six months ended 30^th September 2010 comprise the Company and its subsidiaries (together referred to as the "group").

The principal activities of the group are the manufacture of iron castings and machining operations.

The financial information for the year ended 31^st March 2010 does not constitute the full statutory accounts for that period.  The Annual Report and Financial Statements for 2010 have been filed with the Registrar of Companies.  The Independent Auditors' Report on the Annual Report and Financial Statement for 2010 was unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under 498 (2) or (3) of the Companies Act 2006.

This report has not been audited and has not been reviewed by independent auditors pursuant to the Auditing Practices Board guidance on Review of Interim Financial Information.

2.   ACCOUNTING POLICIES

The annual financial statements of Castings plc are prepared using the recognition and measurement principles of IFRSs as endorsed by the European Union.  The condensed set of financial statements has been prepared in accordance with IAS 34, "Interim Financial Reporting" as adopted by the European Union.

      Basis of preparation

After making enquiries, the directors have a reasonable expectation that the company and the group have adequate resources to continue in operational existence for the foreseeable future.  Accordingly, they continue to adopt the going concern basis in preparing the half-yearly condensed financial statements.

The same accounting policies, presentation and methods of computation are followed in the condensed set of financial statements as applied in the group's latest annual audited financial statements.

3.   SEASONALITY OF OPERATIONS

The directors do not consider there to be any significant seasonality or cyclicality to the results of the group.

4.   SEGMENT INFORMATION

For internal decision making purposes, the group is organised into three operating companies which are considered to be the operating segments of the group. Castings plc and William Lee Limited are aggregated into Foundry Operations and CNC Speedwell Limited is the Machining Operation.

The following shows the revenues, results and total assets by reportable segment for the half year to 30^th September 2010.

	Foundry operations £'000	Machining £'000	Elimination £'000	Total £'000
Revenue from external customers	40,463	4,135	-	44,598
Inter-segmental revenue	5,295	4,442	-	9,737
Segmental result	3,503	1,550	-	5,053
Unallocated costs:
Finance income				69
Profit before income tax				5,122
Total assets	96,037	20,710	(17,577)	99,170
Non-current asset additions	909	3,519	-	4,428
Depreciation	1,180	1,120	-	2,390

The following shows the revenues, results and total assets by reportable segment for the half year to 30^th September 2009.

	Foundry operations £'000	Machining £'000	Elimination £'000	Total £'000
Revenue from external customers	25,243	726	-	25,969
Inter-segmental revenue	1,623	2,151	-	3,774
Segmental result	1,962	(555)	-	1,407
Unallocated costs:
Exceptional credit for over-accrual of redundancy payments				435
Finance income				49
Profit before income tax				1,891
Total assets	89,548	15,007	(17,332)	87,223
Non-current asset additions	281	304		585
Depreciation	1,166	1,027		2,193

Segmental information relating to the year ended 31^st March 2010 is disclosed in the Annual Report.

5.   DIVIDENDS

Amounts recognised as distributions to shareholders in the period:

	Half year	Half year
	to 30th September	to 30th September
	2010 £'000	2009 £'000
Final dividend of 7.29p for the year ended 31st March 2010 (2009: 7.29p) per share	3,181	3,181

The directors have declared an interim dividend in respect of the financial year ending 31^st March 2011 of 2.71 pence per share (2010: 2.71p), which will be paid on 7^th January 2011.

6.   EARNINGS PER SHARE AND DILUTED EARNINGS PER SHARE

Earnings per share is calculated by dividing the profit attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period. There are no share options or other potentially issuable shares; hence the diluted earnings per share is the same calculation.

	Half year to		Half year to		Year to
	30thSeptember		30thSeptember		31stMarch
	2010		2009		2010
	£'000		£'000		£'000
Profit after tax	3,688		1,362		7,368
Weighted average number of shares	43,632,068		43,632,068		43,632,068
Earnings per share - basic and diluted	8.45p		3.12p		17.51p

Statement of Directors' Responsibilities

The directors' confirm that the condensed set of financial statements has been prepared in accordance with IAS 34 as adopted by the European Union and that the interim management report  includes a fair review of the information required by DTR 4.2.7 and DTR 4.2.8.

By order of the Board

S J Mant FCA

Group Finance Director

25^th November 2010

 

END

 

 

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