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Castings PLC (CGS)

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Friday 13 November, 2015

Castings PLC

Half Yearly Report

RNS Number : 5725F
Castings PLC
13 November 2015
 



Castings P.L.C.

 

Interim Management Report

 

Sales for the six months ended 30 September 2015 were £65.0m (2014 - £63.6m) with profit before tax of £9.51m (2014 - £8.34m).

 

Sales revenue has been affected by the general reduction in raw material prices during the period making it difficult to directly compare to the previous year.

 

It was reported at the Annual General Meeting in August that sales volumes were maintaining at reasonable levels. It appears for the next three months that orders and schedules will remain at a similar level.

 

It is anticipated that the profits for the full year will meet market expectations, unless there is a sudden and unexpected change in the economic climate that would affect the outcome.

 

An interim dividend of 3.38 pence per share has been declared and will be paid on 4 January 2016 to shareholders who are on the register at 27 November 2015.

 

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 2015.  A detailed explanation of the risks relevant to the group is on pages 7 and 8 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

13 November 2015

 

Castings P.L.C.                                                                             

Lichfield Road

Brownhills

West Midlands

WS8 6JZ



Consolidated Statement of Comprehensive Income

For six months ended 30 September 2015

 


Unaudited

Unaudited

Audited


Half year to

Half year to

Year to


30 September

30 September

31 March


2015

2014

2015


£'000

£'000

£'000

Revenue

64,962

63,596

131,268

Cost of sales

(48,091)

(47,850)

(99,150)

Gross profit

16,871

15,746

32,118

Distribution costs

(1,103)

(1,062)

(2,162)

Administrative expenses




Excluding exceptional

(6,300)

(6,422)

(12,570)

Exceptional

-

-

24

Total administrative expenses

(6,300)

(6,422)

(12,546)

Profit from operations

9,468

8,262

17,410

Finance income

45

81

137

Profit before income tax

9,513

8,343

17,547

Income tax expense

(1,903)

(1,752)

(3,672)

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

7,610

6,591

13,875

Other comprehensive income/(expense) for the period:




Items that will not be reclassified to profit and loss:




Movement in unrecognised surplus on defined benefit pension schemes net of actuarial gains and losses

-

-

283

Tax effect of items that will not be reclassified

-

-

-


-

-

283

Items that may be reclassified subsequently to profit and loss:




Change in fair value of available for sale financial assets

(32)

(39)

(55)

Tax effect of items that may be reclassified

6

8

11


(26)

(31)

(44)

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

(26)

(31)

239

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

7,584

6,560

14,114

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




Basic and diluted

17.44p

15.11p

31.80p

 



Consolidated Balance Sheet

30 September 2015


Unaudited

Unaudited

Audited


30 September

30 September

31 March


2015

2014

2015


£'000

£'000

£'000

ASSETS




Non-current assets




Property, plant and equipment

66,622

66,774

66,572

Financial assets

435

483

467

Other receivables

5,677

-

4,538


72,734

67,257

71,577

Current assets




Inventories

12,933

14,086

12,115

Trade and other receivables

30,843

33,417

30,342

Other current interest-bearing deposits

10,000

-

10,000

Cash and cash equivalents

21,884

24,671

20,021


75,660

72,174

72,478

Total assets

148,394

139,431

144,055

LIABILITIES




Current liabilities




Trade and other payables

19,624

20,247

18,602

Current tax liabilities

1,379

1,658

1,336


21,003

21,905

19,938

Non-current liabilities




Deferred tax liabilities

4,876

4,346

4,788

Total liabilities

25,879

26,251

24,726

Net assets

122,515

113,180

119,329

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

117,265

107,930

114,079

Total equity

122,515

113,180

119,329






 


 

 

 



Consolidated Cash Flow Statement

For six months ended 30 September 2015


Unaudited

Unaudited

Audited


Half year to

Half year to

Year to


30 September

30 September

31 March


2015

2014

2015


£'000

£'000

£'000

Cash flows from operating activities




Profit before income tax

9,513

8,343

17,547

Adjustments for:




Depreciation

3,174

3,173

6,760

Loss on sale of property, plant and equipment

-

-

1

Finance income

(45)

(81)

(137)

Excess of employer pension contributions over income statement charge

-

-

283

(Increase)/decrease in inventories

(818)

(1,465)

506

Increase in receivables

(1,640)

(664)

(2,127)

Increase/(decrease) in payables

1,022

(829)

(2,474)

Cash generated from operating activities

11,206

8,477

20,359

Tax paid

(1,766)

(2,626)

(4,423)

Interest received

33

69

115

Net cash generated from operating activities

9,473

5,920

16,051

Cash flows from investing activities




Dividends received from listed investments

12

12

22

Purchase of property, plant and equipment

(3,224)

(4,752)

(8,210)

Proceeds from disposal of property, plant and equipment

-

-

72

Transfer to other current interest-bearing deposits

-

-

(10,000)

Net cash (used in)/ inflow from investing activities

(3,212)

(4,740)

(18,116)

Cash flow from financing activities




Dividends paid to shareholders

(4,398)

(4,289)

(5,694)

Net cash used in financing activities

(4,398)

(4,289)

(5,694)

Net increase/(decrease) in cash and cash equivalents

1,863

(3,109)

(7,759)

Cash and cash equivalents at beginning of period

20,021

27,780

27,780

Cash and cash equivalents at end of period

21,884

24,671

20,021





Cash and cash equivalents:




Short-term deposits

20,380

22,012

19,253

Cash available on demand

1,504

2,659

768


21,884

24,671

20,021

 



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 2015

4,363

874

13

114,079

119,329

Profit for the period

-

-

-

7,610

7,610

Other comprehensive income/(losses):






Change in fair value of available for sale assets

-

-

-

(32)

(32)

Tax effect of items taken directly to reserves

-

-

-

6

6

Total comprehensive income for the period ended 30 September 2015

-

-

-

7,584

7,584

Dividends

-

-

-

(4,398)

(4,398)

At 30 September 2015

4,363

874

13

117,265

122,515

 


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

Profit for the period

-

-

-

6,591

6,591

Other comprehensive income/(losses):






Change in fair value of available for sale assets

-

-

-

(39)

(39)

Tax effect of items taken directly to reserves

-

-

-

8

8

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

 


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 2014

4,363

874

13

105,659

110,909

Profit for the year

-

-

-

13,875

13,875

Other comprehensive income/(losses):






Movement in unrecognised surplus on defined benefit pension schemes net of actuarial loss

-

-

-

283

283

Change in fair value of available for sale assets

-

-

-

(55)

(55)

Tax effect of items taken directly to reserves

-

-

-

11

11

Total comprehensive income for the year ended 31 March 2015

-

-

-

14,114

14,114

Dividends

-

-

-

(5,694)

(5,694)

At 31 March 2015

4,363

874

13

114,079

119,329

 



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 2015 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 2015 does not constitute the full statutory accounts for that period.  The Annual Report and Financial Statements for the year ended 31 March 2015 have been filed with the Registrar of Companies.  The Independent Auditors' Report on the Annual Report and Financial Statements for 2015 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 represent two 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 2015.

 


Foundry operations

£'000

 

Machining

£'000

 

Elimination

£'000

 

Total

£'000

Revenue from external customers

55,102

9,860

-

64,962

Inter-segmental revenue

10,342

7,038

-

17,380






Segmental result

6,915

2,553

-

9,468

Unallocated income:





Finance income




45

Profit before income tax




9,513






Total assets

121,295

33,761

(6,662)

148,394






Non-current asset additions

1,574

1,650

-

3,224






Depreciation

1,520

1,654

-

3,174

 

 

 

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 year ended 31 March 2015.


Foundry operations

£'000

 

Machining

£'000

 

Elimination

£'000

 

Total

£'000

Revenue from external customers

113,300

17,968

-

131,268

Inter-segmental revenue

20,532

13,398

-

33,930






Segmental result

13,064

4,521

84

17,669

Unallocated income/(costs):





Exceptional credit for recovery of Icelandic bank deposits previously written off




 

24

Defined benefit pension costs




(283)

Finance income




137

Profit before income tax




17,547






Total assets

122,650

31,919

(10,514)

144,055






Non-current asset additions

4,303

3,907

-

8,210






Depreciation

3,507

3,253

-

6,760

 

 

 

5.   Dividends

Amounts recognised as distributions to shareholders in the period:

 


Half year

Half year


to 30 September

to 30 September


2015

£'000

2014

£'000

Final dividend of 10.08p per share for the year ended 31 March 2015 (2014 - 9.83p per share)

4,398

4,289

 

The directors have declared an interim dividend in respect of the financial year ending 31 March 2016 of 3.38p per share (2015 - 3.22p), which will be paid on 4 January 2016.



 

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.

 


Unaudited

Unaudited

Audited


Half year to

Half year to

 Year to


30 September

30 September

 3 1 March


2015

2014

2015


£'000

£'000

£'000

Profit after tax

7,610

6,591

13,875

Weighted average number of shares

43,632,068

43,632,068

43,632,068

Earnings per share - basic and diluted

17.44p

15.11p

31.80p

 

 

7.   Pension schemes

            The group operates two defined benefit pension schemes which are closed to new entrants and closed to future accruals on 6 April 2009. The assets of the schemes are independent of the finances of the group and are administered by trustees.

 

            The pension schemes are related parties of the group and during the period £1,139,000 (2014 - £1,200,000) was paid by the group on behalf of the schemes in respect of pension payments and administration costs. On 16 March 2015 an agreement was entered into setting out the repayment terms of the outstanding balance at 31 March 2015 in five equal instalments commencing on 30 November 2015. As a result, at 30 September 2015 of the outstanding balance of £6,811,000 (2014 - £4,631,000), £5,677,000 (2014 - nil) is classified as a non-current other receivable. Payments made by the company on behalf of the schemes in the current period are repayable on 30 November 2016.

 

 

8.   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.

 

The directors of Castings P.L.C. are listed on the back cover of this report.

 

 

By order of the board

 

S J Mant FCA

Group Finance Director

13 November 2015

 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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