Half Yearly Report

RNS Number : 2514R
Castings PLC
16 November 2012
 



Interim Management Report

 

Sales for the six months ended 30 September 2012 were £60.4m (2011 - £64.0m) with profit before tax after exceptional items of £9.11m (2011 - £10.13m).

 

The company enjoyed reasonable trading conditions up to the end of August.  In September the foundries experienced a reduction in schedules from our main customer base.  Since then we have seen further schedule and order reductions amounting in total to 20%.  Our main customer base, the European truck manufacturers, are forecasting that orders will continue at around this lower level into 2013 while the economic situation is in such an uncertain state.

 

It is pleasing to report CNC have increased turnover and profits during the half year; this is mainly as a result of new business coming into production.  However, CNC will be affected by the general downturn in truck business.

 

It is somewhat strange that the UK is meant to have moved out of recession when Europe is in such turmoil and so many companies in engineering are seeing reductions in demand.

 

The company will take the necessary action to maintain efficiency at lower levels of production in order to operate at a profitable level and generate good cash flows.

 

An interim dividend of 2.98 pence per share has been declared and will be paid on 4 January 2013 to shareholders who are on the register at 30 November 2012.

 

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 2012.  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

16 November 2012

 

Castings p.l.c.                                                                               

Lichfield Road

Brownhills

West Midlands

WS8 6JZ



Consolidated Statement of Comprehensive Income

 

For six months ended 30 September 2012

(Unaudited)


Half year to


Half year to


Year to


30 September


30 September


31 March


2012


2011


2012


£'000


£'000


£'000







Revenue

60,401


63,991


126,271







Cost of sales

(43,881)


(46,838)


(92,658)







Gross profit

16,520


17,153


33,613







Distribution costs

(791)


(876)


(1,665)







Administrative expenses






Excluding exceptional

(6,683)


(6,211)


(9,704)

Exceptional

-


-


693

Total administrative expenses

(6,683)


(6,211)


(9,011)







Profit from operations

9,046


10,066


22,937







Finance income

65


64


156

 

Profit before income tax

 

9,111


 

10,130


 

23,093







Income tax expense

(2,187)


(2,634)


(5,502)







Profit for the period attributable to the equity holders of the parent company

6,924


7,496


17,591







Other comprehensive expense for the period:






Change in fair value of available for sale financial assets

(13)


(6)


28

Net actuarial loss and movement in unrecognised surplus on defined benefit pension schemes

-


-


(345)

Tax effect of gains and losses recognised directly in equity

3


2


(7)

Total other comprehensive income for the period (net of tax)

(10)


(4)


(324)

 

Total comprehensive income for the period attributable to the equity holders of the parent company

6,914


7,492


17,267

 

 

Earnings per share attributable to the equity holders of the parent company






Basic and diluted

15.87p


17.18p


40.32p

 



Consolidated Balance Sheet

 

30 September 2012

(Unaudited)


30 September


30 September


31 March


2012


2011


2012


£'000


£'000


£'000

ASSETS












Non-current assets






Property, plant and equipment

61,306


56,961


62,226

Financial assets

482


461


495


61,788


57,422


62,721







Current assets






Inventories

10,330


10,474


9,310

Trade and other receivables

30,269


28,585


30,191

Other current interest-bearing deposits

5,000


-


-

Cash and cash equivalents

14,593


16,657


17,805


60,192


55,716


57,306







Total assets

121,980


113,138


120,027







LIABILITIES












Current liabilities






Trade and other payables

18,462


21,141


18,863

Current tax liabilities

2,192


2,151


2,983


20,654


23,292


21,846


 











Non-current liabilities






Deferred tax liabilities

5,665


5,747


5,577







Total liabilities

26,319


29,039


27,423







Net assets

95,661


84,099


92,604







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

90,411


78,849


87,354







Total equity

95,661


84,099


92,604







 

 



Consolidated Cash Flow Statement

 

For six months ended 30 September 2012

(Unaudited)


Half year to


Half year to


Year to


30 September


30 September


31 March


2012


2011


2012


£'000


£'000


£'000

Cash flows from operating activities






Profit before income tax

9,111


10,130


23,093

Adjustments for:






Depreciation

2,880


2,877


6,188

Loss on sale of property, plant & equipment

-


-


66







Interest received

(65)


(64)


(137)







Excess of employer pension contributions over income statement charge

-


-


(345)







(Increase)/decrease in inventories

(1,020)


928


2,092







(Increase)/decrease in receivables

(78)


2,371


765







Decrease in payables

(401)


(3,972)


(6,250)







 

Cash generated from operating activities

10,427


12,270


25,472







Tax paid

(2,887)


(1,927)


(4,142)

Interest received

65


64


137







 

Net cash generated from operating activities

7,605


10,407


21,467







 

Cash flows from investing activities






Purchase of property, plant and equipment

(1,960)


(3,949)


(12,591)

Transfer to other current interest-bearing deposits

(5,000)


-


-







 

Net cash used in investing activities

(6,960)


(3,949)


(12,591)













Cash flow from financing activities






Dividends paid to shareholders

(3,857)


(3,508)


(4,778)

 

Net cash used in financing activities

(3,857)


(3,508)


(4,778)













Net (decrease)/increase in cash and cash equivalents

(3,212)


2,950


4,098

Cash and cash equivalents at beginning of period

17,805


13,707


13,707







Cash and cash equivalents at end of period

14,593


16,657


17,805

 



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 2012

4,363


874


13


87,354


92,604











Total comprehensive income for the period ended 30 September 2012

-


-


-


6,914


6,914











Dividends

-


-


-


(3,857)


(3,857)











At 30 September 2012

4,363


874


13


90,411


95,661











 

 

 

 

 

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 2011

4,363


874


13


74,865


80,115











Total comprehensive income for the year ended 31 March 2012

-


-


-


17,267


17,267











Dividends

-


-


-


(4,778)


(4,778)











At 31 March 2012

4,363


874


13


87,354


92,604

 

 



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 2012 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 2012 does not constitute the full statutory accounts for that period.  The Annual Report and Financial Statements for 2012 have been filed with the Registrar of Companies.  The Independent Auditors' Report on the Annual Report and Financial Statement for 2012 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 2012.


Foundry operations

£'000

 

Machining

£'000

 

Elimination

£'000

 

Total

£'000






Revenue from external customers

53,459

6,942

-

60,401

Inter-segmental revenue

9,878

5,795

-

15,673






Segmental result

6,712

2,334

-

9,046






Unallocated income:





Finance income




65






Profit before income tax




9,111











Total assets

113,332

25,827

(17,179)

121,980











Non-current asset additions

924

1,036

-

1,960











Depreciation

1,448

1,432

-

2,880

 

 

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 income:





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 year ended 31 March 2012.


Foundry operations

£'000

 

Machining

£'000

 

Elimination

£'000

 

Total

£'000






Revenue from external customers

117,036

9,235

-

126,271

Inter-segmental revenue

18,888

11,283

-

30,171






Segmental result

17,761

4,017

121

21,899






Unallocated income:





Exceptional credit for the recovery of Icelandic deposits previously written off




 

693

Excess of employer pension contributions over statement of comprehensive income charge




 

 

345

Finance income




156

 

Profit before income tax




 

23,093











Total assets

110,377

22,755

(13,105)

120,027











Non-current asset additions

7,508

5,356

-

12,864











Depreciation

3,046

3,142

-

6,188

 

 

 

 

5.   DIVIDENDS

 

Amounts recognised as distributions to shareholders in the period:

 


Half year


Half year


to 30 September


to 30 September


2012

£'000


2011

£'000

 

Final dividend of 8.84p for the year ended 31 March 2012

(2011 - 8.04p) per share

3,857


3,508

 

The directors have declared an interim dividend in respect of the financial year ending 31 March 2013 of 2.98p per share (2012 - 2.91p), which will be paid on 4 January 2013.



 

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


2012


2011


2012


£'000


£'000


£'000







Profit after tax

6,924


7,496


17,591







Weighted average number of shares

43,632,068


43,632,068


43,632,068







Earnings per share - basic and diluted

 

15.87p


 

17.18p


 

40.32p

 

 

 

7.   CASH, CASH EQUIVALENTS AND OTHER CURRENT INTEREST-BEARING DEPOSITS

 


Half year to


Half year to


 Year to


30 September


30 September


 3 1 March


2012


2011


2012


£'000


£'000


£'000







Cash and cash equivalents

14,593


16,657


17,805

Other current interest-bearing deposits

5,000


-


-








19,593


16,657


17,805

 

 

In accordance with IAS7, cash held on long term deposits, with an original maturity greater than three months, has been classified as other current interest-bearing deposits.

 

 

 

 

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

16 November 2012

 

 


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