Half Yearly Report

RNS Number : 9915W

Castings PLC

14 November 2014

 



Castings P.L.C.

Interim Management Report

Sales for the six months ended 30 September 2014 were £63.6m (2013 - £65.9m) with profit before tax of £8.34m (2013 - £9.57m).

It was reported at our Annual General Meeting in August that sales were below our expectations. Market forecasts of an increase in volumes in the third quarter of 2014 did not materialise. Forward schedules suggest a reduction in demand.

With the increasing concern over the strength of the recovery in Europe it is difficult to forecast the outcome for the remainder of the year. However, the directors anticipate that the year end results will be in-line with current market expectations.

An interim dividend of 3.22 pence per share has been declared and will be paid on 2 January 2015 to shareholders who are on the register at 28 November 2014.

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 2014.  A detailed explanation of the risks relevant to the group is on pages 6 and 7 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 P.L.C. and its subsidiary undertakings when viewed as a whole.

By order of the board:

BRIAN J. COOKE

Chairman

14 November 2014

Castings P.L.C.                                                                             

Lichfield Road

Brownhills

West Midlands

WS8 6JZ

Consolidated Statement of Comprehensive Income

For six months ended 30 September 2014

	Unaudited		Unaudited		Audited
	Half year to		Half year to		Year to
	30 September		30 September		31 March
	2014		2013		2014
	£'000		£'000		£'000
Revenue	63,596		65,902		137,466
Cost of sales	(47,850)		(49,330)		(101,424)
Gross profit	15,746		16,572		36,042
Distribution costs	(1,062)		(999)		(2,722)
Administrative expenses
Excluding exceptional	(6,422)		(6,102)		(12,034)
Exceptional	-		-		363
Total administrative expenses	(6,422)		(6,102)		(11,671)
Profit from operations	8,262		9,471		21,649
Finance income	81		102		184
Profit before income tax	8,343		9,573		21,833
Income tax expense	(1,752)		(2,202)		(4,575)
Profit for the period attributable to the equity holders of the parent company	6,591		7,371		17,258
Other comprehensive income/(expense) for the period:
Items that will not be reclassified to profit and loss:
Net actuarial loss and movement in unrecognised surplus on defined benefit pension schemes	-		-		(3,872)
Tax effect of items that will not be reclassified	-		-		853
	-		-		(3,019)
Items that may be reclassified subsequently to profit and loss:
Change in fair value of available for sale financial assets	(39)		17		28
Tax effect of items that may be reclassified	8		(4)		(6)
	(31)		13		22
Total other comprehensive (losses)/income for the period (net of tax)	(31)		13		(2,997)
Total comprehensive income for the period attributable to the equity holders of the parent company	6,560		7,384		14,261
Earnings per share attributable to the equity holders of the parent company
Basic and diluted	15.11p		16.89p		39.55p

Consolidated Balance Sheet

30 September 2014

	Unaudited		Unaudited		Audited
	30 September		30 September		31 March
	2014		2013		2014
	£'000		£'000		£'000
ASSETS
Non-current assets
Property, plant and equipment	66,774		63,507		65,195
Financial assets	483		511		522
	67,257		64,018		65,717
Current assets
Inventories	14,086		9,932		12,621
Trade and other receivables	33,417		35,090		32,753
Cash and cash equivalents	24,671		25,750		27,780
	72,174		70,772		73,154
Total assets	139,431		134,790		138,871
LIABILITIES
Current liabilities
Trade and other payables	20,247		22,008		21,076
Current tax liabilities	1,658		2,226		2,615
	21,905		24,234		23,691
Non-current liabilities
Deferred tax liabilities	4,346		5,158		4,271
Total liabilities	26,251		29,392		27,962
Net assets	113,180		105,398		110,909
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	107,930		100,148		105,659
Total equity	113,180		105,398		110,909

Consolidated Cash Flow Statement

For six months ended 30 September 2014

	Unaudited		Unaudited		Audited
	Half year to		Half year to		Year to
	30 September		30 September		31 March
	2014		2013		2014
	£'000		£'000		£'000
Cash flows from operating activities
Profit before income tax	8,343		9,573		21,833
Adjustments for:
Depreciation	3,173		2,914		6,046
Loss on sale of property, plant and equipment	-		-		94
Finance income	(81)		(102)		(184)
Excess of employer pension contributions over income statement charge	-		-		(3,872)
(Increase)/decrease in inventories	(1,465)		710		(1,979)
(Increase)/decrease in receivables	(664)		(1,764)		573
(Decrease)/increase in payables	(829)		2,322		1,390
Cash generated from operating activities	8,477		13,653		23,901
Tax paid	(2,626)		(2,830)		(4,850)
Interest received	69		90		162
Net cash generated from operating activities	5,920		10,913		19,213
Cash flows from investing activities
Dividends received from listed investments	12		12		22
Purchase of property, plant and equipment	(4,752)		(4,745)		(9,668)
Proceeds from disposal of property, plant and equipment	-		-		9
Transfer from other current interest-bearing deposits	-		5,000		5,000
Net cash (used in)/ inflow from investing activities	(4,740)		267		(4,637)
Cash flow from financing activities
Dividends paid to shareholders	(4,289)		(4,084)		(5,450)
Net cash used in financing activities	(4,289)		(4,084)		(5,450)
Net (decrease)/increase in cash and cash equivalents	(3,109)		7,096		9,126
Cash and cash equivalents at beginning of period	27,780		18,654		18,654
Cash and cash equivalents at end of period	24,671		25,750		27,780
Cash and cash equivalents:
Short-term deposits	22,012		24,599		27,113
Cash available on demand	2,659		1,151		667
	24,671		25,750		27,780

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 2014	4,363		874		13		105,659		110,909
Total comprehensive income for the period ended 30 September 2014	-		-		-		6,560		6,560
Dividends	-		-		-		(4,289)		(4,289)
At 30 September 2014	4,363		874		13		107,930		113,180
	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 2013	4,363		874		13		96,848		102,098
Total comprehensive income for the period ended 30 September 2013	-		-		-		7,384		7,384
Dividends	-		-		-		(4,084)		(4,084)
At 30 September 2013	4,363		874		13		100,148		105,398
	Audited 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 2013	4,363		874		13		96,848		102,098
Total comprehensive income for the year ended 31 March 2014	-		-		-		14,261		14,261
Dividends	-		-		-		(5,450)		(5,450)
At 31 March 2014	4,363		874		13		105,569		110,909

Notes

1.   GENERAL INFORMATION

Castings P.L.C. (the "Company") is a company domiciled in England.  The condensed consolidated interim financial statements of the Company for the six months ended 30 September 2014 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 2014 does not constitute the full statutory accounts for that period.  The Annual Report and Financial Statements for the year ended 31 March 2014 have been filed with the Registrar of Companies.  The Independent Auditors' Report on the Annual Report and Financial Statement for 2014 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 P.L.C. 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 consolidated interim financial statements.

The same accounting policies, presentation and methods of computation are followed in the condensed consolidated interim 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 P.L.C. 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 2014.

	Foundry operations £'000	Machining £'000	Elimination £'000	Total £'000
Revenue from external customers	55,618	7,978	-	63,596
Inter-segmental revenue	9,919	6,402	-	16,321
Segmental result	6,418	1,844	-	8,262
Unallocated income:
Finance income				81
Profit before income tax				8,343
Total assets	123,117	32,517	(16,203)	139,431
Non-current asset additions	3,106	1,646	-	4,752
Depreciation	1,555	1,618	-	3,173

The following shows the revenues, results and total assets by reportable segment for the half year to 30 September 2013.

	Foundry operations £'000	Machining £'000	Elimination £'000	Total £'000
Revenue from external customers	57,411	8,491	-	65,902
Inter-segmental revenue	11,304	6,449	-	17,753
Segmental result	7,181	2,290	-	9,471
Unallocated income:
Finance income				102
Profit before income tax				9,573
Total assets	122,459	30,323	(17,992)	134,790
Non-current asset additions	1,583	3,162	-	4,745
Depreciation	1,422	1,492	-	2,914

The following shows the revenues, results and total assets by reportable segment for the year ended 31 March 2014.

	Foundry operations £'000	Machining £'000	Elimination £'000	Total £'000
Revenue from external customers	119,893	17,573	-	137,466
Inter-segmental revenue	23,070	13,915	-	36,985
Segmental result	16,225	5,187	-	21,412
Unallocated income:
Exceptional credit for the recovery of Icelandic deposits previously written off				363
Defined benefit pension cost				(126)
Finance income				184
Profit before income tax				21,833
Total assets	121,153	30,529	(12,881)	138,871
Non-current asset additions	3,531	6,137	-	9,668
Depreciation	3,031	3,015	-	6,046

5.   DIVIDENDS

Amounts recognised as distributions to shareholders in the period:

	Half year		Half year
	to 30 September		to 30 September
	2014 £'000		2013 £'000
Final dividend of 9.83p for the year ended 31 March 2014 (2013 - 9.36p) per share	4,289		4,084

The directors have declared an interim dividend in respect of the financial year ending 31 March 2015 of 3.22p per share (2014 - 3.13p), which will be paid on 2 January 2015.

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
	2014		2013		2014
	£'000		£'000		£'000
Profit after tax	6,591		7,371		17,258
Weighted average number of shares	43,632,068		43,632,068		43,632,068
Earnings per share - basic and diluted	15.11p		16.89p		39.55p

7.   INTERIM REPORT

      Copies of this interim management report will be available on the company's website, www.castings.plc.uk and from the registered office.

Statement of Directors' Responsibilities

The directors confirm that the condensed consolidated interim financial statements have 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 4.2.7R and DTR 4.2.8R.

By order of the Board

S J Mant FCA

Group Finance Director

14 November 2014

 

END

 

 

IR BJBATMBJBBTI