Interim Management Statement

RNS Number : 0972D

Castings PLC

26 November 2009

 



Castings p.l.c.

Interim Management Report

Profit before tax after exceptional items for the six months ended 30th September 2009 was £1.89m.

Sales for the period April to September 2009 were £25.9m compared to £51.1m for the same period last year. For the first three months, sales continued at the same level as reported at the Annual General Meeting. It is pleasing to report that during the subsequent three months sales improved to about 60% of last year's values.

Our main markets, namely the commercial vehicle industry in Europe, have been adversely affected, firstly by inventory reduction, then the lack of finance for the purchase of new vehicles and the general state of the main economies.

We hope the improved sales will continue into 2010, but we do not expect to return to our previous high levels for some time. We are now operating efficiently in all foundries with our reduced workforce. The machine shop, CNC Speedwell, is now showing a slow recovery and also obtaining new business which will be good for the long term future.

Despite lower volumes the group generated cash from operating activities and after having paid the final dividend for last year still had £14m cash resources.

An interim dividend of 2.71 pence per share has been declared and will be paid on 8th January 2010 to shareholders who are on the register at 11th December 2009.

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 31st March 2009. 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

26th November 2009

Castings p.l.c.                               

Lichfield Road

Brownhills

West Midlands

WS8 6JZ

  Consolidated Statement of Comprehensive Income

For six months ended 30th September 2009

(Unaudited)

	Half year to		Half year to		Year to
	30th September		30th September		31st March
	2009		2008		2009
	£'000		£'000		£'000
Revenue	25,969		51,129		84,812
Cost of sales	19,911		(39,996)		(66,921)
Gross profit	6,058		11,133		17,891
Distribution costs	(326)		(727)		(1,208)
Administrative expenses
Excluding exceptional items	(4,325)		(5,180)		(8,708)
Exceptional (see note 7)	435		(5,701)		(6,043)
Total administrative expenses	(3,890)		(10,881)		(14,751)
Profit/(loss) from operations	1,842		(475)		1,932
Finance income	49		996		1,684
Profit before income tax	1,891		521		3,616
Income tax expense	(529)		(146)		(2,994)
Profit for the period attributable to the equity holders of the parent company	1,362		375		622
Other comprehensive expense for the period:
Change in fair value of available for sale financial assets	66		(527)		(199)
Actuarial losses on defined pension schemes	-		-		(296)
Tax effect of gains and losses recognised directly in equity	(18)		148		56
Total other comprehensive expense for the period (net of tax)	48		(379)		(439)
Total comprehensive income and expense for the period attributable to the equity holders of the parent company	1,410		(4)		183
Earnings per share attributable to the equity holders of the parent company
Basic and diluted	3.12p		0.86p		1.43p

  Consolidated Balance Sheet

30th September 2009

(Unaudited)

	30thSeptember		30thSeptember		31stMarch
	2009		2008		2009
	£'000		£'000		£'000
Assets
Non-current assets
Property, plant and equipment	51,800		45,817		53,408
Financial assets	475		56		429
	52,275		45,873		53,837
Current assets
Inventories	6,137		7,983		7,401
Trade and other receivables	14,743		22,614		13,854
Cash and cash equivalents	14,068		18,946		15,804
	34,948		49,543		37,059
Total assets	87,223		95,416		90,896
Liabilities
Current liabilities
Trade and other payables	10,448		18,332		12,608
Current tax liabilities	531		116		310
	10,979		18,448		12,918
Non-current liabilities
Deferred tax liabilities	4,338		2,296		4,301
	4,338		2,296		4,301
Total liabilities	15,317		20,744		17,219
Net Assets	71,906		74,672		73,677
Equity attributable to equity holders of the parent company
Share capital	4,363		4,363		4,363
Share premium account	874		874		874
Other reserves	13		13		13
Retained earnings	66,656		69,422		68,427
Total equity	71,906		74,672		73,677

Consolidated Cash Flow Statement

For six months ended 30th September 2009

(Unaudited)

	Half year		Half year		Year to
	to 30thSeptember		to 30thSeptember		31stMarch
	2009		2008		2009
	£'000		£'000		£'000
Cash flows from operating activities
Profit before income tax	1,891		521		3,616
Adjustments for:
Depreciation (net of profit on sale of property, plant & equipment)	2,193		2,476		5,159
Interest received	(49)		(996)		(1,684)
Excess of employer pension contributions over income statement charge	-		-		(296)
Decrease / (increase) in inventories	1,264		(929)		(347)
(Increase)/decrease in receivables	(889)		(26)		8,734
(Decrease) in payables	(2,160)		(257)		(5,981)
Cash generated from operating activities	2,250		789		9,201
Tax paid	(289)		(1,784)		(2,525)
Net cash generated from / (used in) operating activities	1,961		(995)		6,676
Cash flows from investing activities
Purchase of property, plant and equipment	(585)		(9,521)		(19,888)
Proceeds from disposal of property, plant and equipment	-		-		93
Proceeds from disposal of financial assets	20		153		108
Interest received	49		996		1,684
Net cash used in investing activities	(516)		(8,372)		(18,003)
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 decrease in cash and cash equivalents	(1,736)		(12,548)		(15,690)
Cash and cash equivalents at beginning of period	15,804		31,494		31,494
Cash and cash equivalents at end of period	14,068		18,946		15,804

  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 2009	4,363		874		13		68,427		73,677
Total comprehensive income 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 2008	4,363		874		13		72,607		77,857
Total comprehensive expense for the period ended 30th September 2008	-		-		-		(4)		(4)
Dividends	-		-		-		(3,181)		(3,181)
At 30th September 2008	4,363		874		13		69,422		74,672
	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 2008	4,363		874		13		72,607		77,857
Total comprehensive income for the year ended 31st March 2009	-		-		-		183		183
Dividends	-		-		-		(4,363)		(4,363)
At 31st March 2009	4,363		874		13		68,427		73,677

  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 30th September 2009 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 31st March 2009 does not constitute the full statutory accounts for that period. The Annual Report and Financial Statements for 2009 have been filed with the Registrar of Companies. The Independent Auditors' Report on the Annual Report and Financial Statement for 2009 was unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under 237(2) or 237 (3) of the Companies Act 1985.

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, except as described below.

Changes in accounting policies

In the current financial year, the group has adopted IAS 1, "Presentation of Financial Statements" (Revised).

IAS 1 Presentation of Financial Statements (Revised) includes the requirement to present a Statement of Changes in Equity as a primary statement and introduces the possibility of either a single Statement of Comprehensive Income (combining the Income Statement and a Statement of Comprehensive Income) or to retain the Income Statement with a supplementary Statement of Comprehensive Income. The first option has been adopted by Castings plc. As this standard is concerned with presentation only it does not have any impact on the results or net assets of the group.

IFRS 8 Operating Segments requires operating segments to be identified on the basis of internal reports about components of the group that are regularly reviewed by the Chief Operating Decision Maker ("CODM"). By contrast IAS 14, "Segmental Reporting" required business and geographical segments to be identified on a risks and rewards approach. The business segmental reporting bases used by the company in previous years are those which are reported to the CODM, so the changes to the segmental reporting for 2009 are in respect of the additional disclosure only.

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

The directors consider that there are two operating segments which meet the aggregation criteria. Therefore the directors consider that there is only one reportable aggregated segment. All disclosures required under IFRS 8 and IAS 34 have therefore already been given in these interim condensed consolidation financial statements.

The geographical analysis of revenues by destination for the period is as follows:

	Half year to 30th September 2009 £'000		Half year to 30th  September 2008 £'000		Year  to 31st  March 2009 £'000
United Kingdom	12,742		18,589		32,302
Sweden	3,798		10,453		17,312
Rest of Europe	8,929		21,193		33,610
North and South America	498		770		1,481
Other	2		124		107
	25,969		51,129		84,812

5.    DIVIDENDS

	Half year	Half year
	to 30th September	to 30th September
Amounts recognised as distributions to shareholders in the period:	2009 £'000	2008 £'000
Final dividend of 7.29p for the year ended 31st March 2009 (2008: 7.29p) per share	3,181	3,181

The directors have declared an interim dividend in respect of the financial year ending 31st March 2010 of 2.71 pence per share (2009: 2.71p), which will be paid on 8th January 2010.

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		Half year		Year to
	to 30thSeptember		to 30thSeptember		31stMarch
	2009		2008		2009
	£'000		£'000		£'000
Profit after tax	1,362		375		622
Weighted average number of shares	43,632,068		43,632,068		43,632,068
Earnings per share - basic and diluted	3.12p		0.86p		1.43p

7.    EXCEPTIONAL EXPENSES

a)    The exceptional credit of £435,000 relates to accruals for redundancy payments made as at 31st March 2009 that were not used due to the subsequent increase in production volumes and have therefore been released.

b)    The company reported in the group's annual financial statements as at 31st March 2009 that £1.86 million was included in other receivables as recoverable from the Icelandic Banks. So far £703,000 has been received and the remaining receivable is considered to be the recoverable amount at 30th September 2009..

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

J.C.Roby FCA

Finance Director 

26th November 2009

 

END

 

 

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