Half Yearly Report

RNS Number : 6210S

Castings PLC

24 November 2011

 



Castings p.l.c.

Interim Management Report

Sales for the six months ended 30 September 2011 were £64.0m (2010 - £44.6m) with profit before tax after exceptional items of £10.13m (2010 - £5.12m).

The company has enjoyed good trading conditions throughout the period and it is pleasing to report that our recent investments have made a significant contribution to the results both from the foundries and the machining business.  It is encouraging that we have and are winning new business and new customers which gives us confidence for the future.

Certain customers have reported that commercial vehicle production is reducing by 10 to 15% and this has been reflected in some of our customer's schedules.  It is still very early to forecast what effect these reductions, and potentially further reductions, will have on the full year results.

The European and world economies are very unstable and unpredictable.  As in previous periods of uncertainty, the company is well prepared to react to customer's changing demands.

The company is continuing to invest in machining and foundry improvements and in this respect the new warehouse will be complete by January 2012.  This will improve our stock control and logistics to our customers.

An interim dividend of 2.91 pence per share has been declared and will be paid on 6 January 2012 to shareholders who are on the register at 9 December 2011.

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 March 2011.  A detailed explanation of the risks relevant to the group is on pages 9 and 10 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

24 November 2011

Castings p.l.c.                                                                               

Lichfield Road

Brownhills

West Midlands

WS8 6JZ

Consolidated Statement of Comprehensive Income

For six months ended 30 September 2011

(Unaudited)

	Half year to		Half year to		Year to
	30 September		30 September		31 March
	2011		2010		2011
	£'000		£'000		£'000
Revenue	63,991		44,598		105,368
Cost of sales	(46,838)		(34,020)		(77,526)
Gross profit	17,153		10,578		27,842
Distribution costs	(876)		(673)		(1,909)
Administrative expenses
Excluding exceptional	(6,211)		(4,852)		(10,942)
Exceptional	-		-		352
Total administrative expenses	(6,211)		(4,852)		(10,590)
Profit from operations	10,066		5,053		15,343
Finance income	64		69		158
Profit before income tax	10,130		5,122		15,501
Income tax expense	(2,634)		(1,434)		(3,849)
Profit for the period attributable to the equity holders of the parent company	7,496		3,688		11,652
Other comprehensive expense for the period:
Change in fair value of available for sale financial assets	(6)		(22)		-
Net actuarial loss and movement in unrecognised surplus on defined benefit pension schemes	-		-		(409)
Tax effect of gains and losses recognised directly in equity	2		6		-
Total other comprehensive income for the period (net of tax)	(4)		(16)		(409)
Total comprehensive income for the period attributable to the equity holders of the parent company	7,492		3,672		11,243
Earnings per share attributable to the equity holders of the parent company
Basic and diluted	17.18p		8.45p		26.71p

Consolidated Balance Sheet

30 September 2011

(Unaudited)

	30 September		30 September		31 March
	2011		2010		2011
	£'000		£'000		£'000
ASSETS
Non-current assets
Property, plant and equipment	56,961		53,622		55,889
Financial assets	461		452		467
	57,422		54,074		56,356
Current assets
Inventories	10,474		9,743		11,402
Trade and other receivables	28,585		20,590		30,956
Cash and cash equivalents	16,657		14,763		13,707
	55,716		45,096		56,065
Total assets	113,138		99,170		112,421
LIABILITIES
Current liabilities
Trade and other payables	21,141		18,726		25,113
Current tax liabilities	2,151		1,384		1,546
	23,292		20,110		26,659
Non-current liabilities
Deferred tax liabilities	5,747		5,334		5,647
Total liabilities	29,039		25,444		32,306
Net assets	84,099		73,726		80,115
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	78,849		68,476		74,865
Total equity	84,099		73,726		80,115

Consolidated Cash Flow Statement

For six months ended 30 September 2011

(Unaudited)

	Half year to		Half year to		Year to
	30 September		30 September		31 March
	2011		2010		2011
	£'000		£'000		£'000
Cash flows from operating activities
Profit before income tax	10,130		5,122		15,501
Adjustments for:
Depreciation	2,877		2,390		5,606
Profit on sale of property, plant & equipment	-		-		(26)
Interest received	(64)		(69)		(120)
Excess of employer pension contributions over income statement charge	-		-		(409)
Decrease/(increase) in inventories	928		(1,925)		(3,584)
Decrease/(increase) in receivables	2,371		(1,853)		(12,219)
(Decrease)/increase in payables	(3,972)		4,055		10,442
Cash generated from operating activities	12,270		7,720		15,191
Tax paid	(1,927)		(155)		(2,099)
Interest received	64		69		120
Net cash generated from operating activities	10,407		7,634		13,212
Cash flows from investing activities
Purchase of property, plant and equipment	(3,949)		(4,428)		(9,907)
Proceeds from disposal of property, plant and equipment	-		2		15
Proceeds from disposal of financial assets	-		18		32
Net cash used in investing activities	(3,949)		(4,408)		(9,860)
Cash flow from financing activities
Dividends paid to shareholders	(3,508)		(3,181)		(4,363)
Net cash used in financing activities	(3,508)		(3,181)		(4,363)
Net increase/(decrease) in cash and cash equivalents	2,950		45		(1,011)
Cash and cash equivalents at beginning of period	13,707		14,718		14,718
Cash and cash equivalents at end of period	16,657		14,763		13,707

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 1 April 2011	4,363		874		13		74,865		80,115
Total comprehensive income for the period ended 30 September 2011	-		-		-		7,492		7,492
Dividends	-		-		-		(3,508)		(3,508)
At 30 September 2011	4,363		874		13		78,849		84,099
	Equity attributable to equity holders of the parent
	Share capital		Share premium		Other reserve		Retained earnings		Total equity
	£'000		£'000		£'000		£'000		£'000
At 1 April 2010	4,363		874		13		67,985		73,235
Total comprehensive income for the period ended 30 September 2010	-		-		-		3,672		3,672
Dividends	-		-		-		(3,181)		(3,181)
At 30 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 1 April 2010	4,363		874		13		67,985		73,235
Total comprehensive income for the year ended 31 March 2011	-		-		-		11,243		11,243
Dividends	-		-		-		(4,363)		(4,363)
At 31 March 2011	4,363		874		13		74,865		80,115

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 September 2011 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 March 2011 does not constitute the full statutory accounts for that period.  The Annual Report and Financial Statements for 2011 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 September 2011.

	Foundry operations £'000	Machining £'000	Elimination £'000	Total £'000
Revenue from external customers	59,401	4,590	-	63,991
Inter-segmental revenue	9,353	5,775	-	15,128
Segmental result	8,228	1,838	-	10,066
Unallocated costs:
Finance income				64
Profit before income tax				10,130
Total assets	109,104	21,364	(17,330)	113,138
Non-current asset additions	2,864	1,085	-	3,949
Depreciation	1,458	1,419	-	2,877

The following shows the revenues, results and total assets by reportable segment for the half year to 30 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	1,270	1,120	-	2,390

The following shows the revenues, results and total assets by reportable segment for the year ended 31 March 2011.

	Foundry operations £'000	Machining £'000	Elimination £'000	Total £'000
Revenue from external customers	97,163	8,205	-	105,368
Inter-segmental revenue	14,429	11,701	-	26,130
Segmental result	11,593	3,410	(421)	14,582
Unallocated costs:
Exceptional credit for the recovery of Icelandic deposits previously written off				196
Release of provision for Industrial Tribunal costs				156
Excess of employer pension contributions over statement of comprehensive income charge				409
Finance income				158
Profit before income tax				15,501
Total assets	104,311	20,781	(12,671)	112,421
Non-current asset additions	3,419	6,488	-	9,907
Depreciation	2,882	2,724	-	5,606

5.   DIVIDENDS

Amounts recognised as distributions to shareholders in the period:

	Half year		Half year
	to 30 September		to 30 September
	2011 £'000		2010 £'000
Final dividend of 8.04p for the year ended 31 March 2011 (2010 - 7.29p) per share	3,508		3,181

The directors have declared an interim dividend in respect of the financial year ending 31 March 2012 of 2.91 pence per share (2011 - 2.71p), which will be paid on 6 January 2012.

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
	30 September		30 September		3 1 March
	2011		2010		2011
	£'000		£'000		£'000
Profit after tax	7,496		3,688		11,652
Weighted average number of shares	43,632,068		43,632,068		43,632,068
Earnings per share - basic and diluted	17.18p		8.45p		26.71p

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.

The directors of Castings plc are listed on the following page.

By order of the Board

S J Mant FCA

Group Finance Director

24 November 2011

 

END

 

 

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