REG - Castings PLC - Final Results
11/06/2025 07:00
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RNS Number : 2781M Castings PLC 11 June 2025
The information contained within this announcement is deemed by the Company to
constitute inside information stipulated under the Market Abuse Regulation
(EU) No. 596/2014 as it forms part of UK domestic law by virtue of the
European Union (Withdrawal) Act 2018. Upon the publication of this
announcement via the Regulatory Information Service, this inside information
is now considered to be in the public domain.
Castings P.L.C.
Final Results
Year ended 31 March 2025
DTR 6.3.5 Disclosure
Chairman's Statement
Overview
Demand from our heavy truck customers, which make up over 75% of group
revenue, was at a reduced level compared to the very strong levels of the
previous year. These OEMs have been reporting a normalisation of demand
throughout the year and this has naturally fed through to reduced schedules
being placed on us. The reduction in schedules worsened during the first three
quarters but recovered somewhat during the final quarter
The European market, which comprises nearly three-quarters of our revenue, was
reduced generally but particularly in Germany and truck manufacturers with a
greater exposure to this market were impacted more heavily. Demand from the US
was strong in the first half of the year but this also declined as the year
progressed and especially so in the last quarter with greater political and
economic uncertainty in the region.
Turnover decreased by 21% compared with the previous year and operating profit
reduced by 76%. The despatch weight fell by 19% compared to the prior year.
The year saw a significant increase in electricity costs as a direct result of
lower customer demand. As a consequence of consuming less electricity,
penalties were enforced on forward purchased electricity volumes that were not
required. The total of these penalties was £1.5 million, which includes a
provision for the period up to the end of the contract in September 2025. The
forward volumes purchased from October 2025 onwards have been restricted and
no further financial loss is anticipated for these periods.
In June 2024 the group purchased the fixed assets and stock from the
administrators of a business making large iron castings (up to 7 tonnes) in
Scunthorpe. The purchase represented an opportunity to supply products and
customers that were new to the group. It also enables us to offer our existing
customers a broader product range.
The Scunthorpe business, which traditionally supplies the capital goods
market, is more exposed to spot-orders which creates greater short-term demand
variability compared to the other foundries in the group. Whilst the initial
level of demand following the purchase was high, this subsequently reduced
during the second half of the financial year.
The overall loss during the nine months of operation was £1.3 million,
although this does include £0.4 million of set-up costs to re-establish the
business following a period of underinvestment. The business is now
established and generating orders for new products from new customers as well
as having re-established existing customer relationships.
Foundry businesses
Demand was down by nearly 20% on a sales weight basis (like-for-like) compared
to the high levels of the previous year. This reduction has negatively
impacted production efficiencies in these businesses during the year. The
impact of the electricity penalties also affects the foundries to a much
greater extent than the machining business due to the greater levels of
consumption.
Last year the board approved the installation of an additional foundry
production line at our William Lee site. We are nearing the end of the
installation phase of the project and commissioning is expected to be complete
later in the summer. The project is in line with budget. The new production
line will add up to 12,000 tonnes of additional gross foundry capacity which
represents a 15% increase on the group's current capacity. The additional
facility will enable us to take advantage of new and growing market areas such
as wind energy, agriculture and further opportunities in the US as well as
satisfying additional demand from our existing customer base.
CNC Speedwell
It is pleasing to report a solid performance in the machining business against
the backdrop of lower demand levels.
Investment has been focussed on replacing older equipment with more efficient
machines in line with our on-going replacement programme.
Outlook
The schedules from our heavy truck customers suggest that the current lower
levels of demand will continue in the short-term with improvements in the
autumn.
The new foundry line can produce parts with slightly larger dimensions, thus
providing the opportunity to quote for work that would have previously been
outside of our scope. This will result in incremental business. The facility
in Scunthorpe then allows for significantly larger castings to be supplied to
existing and new customers.
At the time of writing, with the nature of the parts we supply, we do not
consider the changes to tariffs to be a significant issue to our existing
business in the US.
As is well reported, the UK has the highest energy prices relative to our
overseas competition, on top of which the Government's decision to increase
national insurance is a considerable burden for UK manufacturers. These issues
impact on our competitive position. The group continues to invest in
productivity and efficiency measures to try to mitigate these challenges.
We will continue to develop opportunities with existing customers in areas
such as the electrification of lighter trucks and build relationships in other
markets such as wind energy, agriculture and in the US.
Dividend
The directors have considered carefully the outlook described above and the
strong balance sheet, even after significant capital investment during the
year, and have decided to recommend the payment of a final dividend at the
same level as last year. Accordingly the directors are recommending the
payment of a final dividend of 14.19 pence per share to be paid on 26 August
2025 to shareholders on the register on 18 July 2025. This, together with the
interim dividend, gives a total dividend for the year of 18.40 pence per
share.
Directors
As part of our succession planning, Stephen Harrison was appointed to the
board as a non-executive director on 26 September 2024. Having been CEO of
Forterra plc and currently non-executive chairman of Epwin Group plc and
Tungsten West plc, Stephen brings significant relevant experience to the
group.
I would like to thank Andrew Eastgate, who is not seeking re-election at the
AGM, for his outstanding contribution to the board over the last seven years.
Andrew will retire as a non-executive director on 26 August 2025.
I also wish to thank the directors, senior management and all of our employees
for their hard work and commitment during the year.
A. N. Jones
Chairman
11 June 2025
Business and Financial Review
General overview
The underlying demand from our commercial vehicle customers (approximately 75%
of group revenue) was down 20% when compared to the elevated levels of the
previous year.
Our OEM customers have reported demand normalisation throughout the year
which, as expected, has flowed through to the schedule reductions we have seen
from them.
Whilst the European truck market has been lower in general, the reductions
have been particularly severe with customers who have more exposure to the
German market.
The US market was a notable exception, in the first half of the year
particularly, and we saw increased penetration with existing customers.
However, we did see a slight slowing in Q4 as uncertainty levels increased in
that market.
In addition to the reduced demand, the result has been impacted by two items
in the second half of the financial year. The first is, as a direct impact of
lower volumes, an increase in power costs resulting from enforced penalties
payable on forward purchased electricity volumes that were not required. The
second relates to the start-up costs and trading losses associated with the
new business in Scunthorpe, Castings Ductile, certain assets of which were
purchased from administration on 14 June 2024.
The increased electricity costs, including provision for expected losses on
the contract through to September 2025, have negatively impacted the year by
£1.5 million. The elevated costs are not expected to impact profitability
during the year ending 31 March 2026.
The Castings Ductile business in Scunthorpe, which produces castings up to 7
tonnes, made a loss in the year of £1.3 million. This includes £0.4 million
of non-recurring costs to re-establish the business which had been
underinvested in during the period leading up to administration.
The demand for larger castings (typically the capital goods market) is
inherently variable and a slowdown was seen in the second half of the year.
The business is now established and the sales team are generating orders with
new customers in new markets, including leveraging off the customer base of
the traditional foundry businesses.
Overview of business segment performance
The segmental revenue and results for the current and previous years are set
out in note 2. An overview of the performance, position and future prospects
of each segment, and the relevant KPIs, are set out below.
Key Performance Indicators
The key performance indicators considered by the group are:
• Segmental revenue
• Segmental profit
• EPS
• Cash
• Dividends per share
Foundry operations
As set out previously, customer demand has been at lower levels throughout the
year. The foundry businesses experienced a decrease in sales output of 18.7%
to 41,000 tonnes. After taking into account the reduction in weight from
machining, this equates to approximately 45,500 tonnes of production.
On a like-for-like basis, excluding Castings Ductile, the reduction in sales
volume was 20.8%, down to 39,950 tonnes.
External sales revenue reduced by 21.1% to £175.5 million. Of the total
output weight for the year, excluding Castings Ductile, 67.3% related to
machined castings compared to 63.3% in the previous year. The change reflects
the trend of an increasing proportion of more complex, machined parts.
The segmental profit of £2.9 million was down £13.3 million on the prior
year. This includes £2.8 million of additional electricity costs and the
Castings Ductile loss as set out previously.
The result represents a profit margin of 1.5% on total segmental sales (2024 -
6.4%) reflecting the impact of the significant fall in the demand schedules.
Investment of £15.1 million has been made in the foundry businesses during
the year. The most significant element of this was
£10.6 million of payments for the new production line at our William Lee
site. Of that, £6.7 million relates to down payments for undelivered plant;
this has been classified within prepayments. The expected cost of the new
production facility remains in line with budget and is on target to be
completed later this summer.
The additional £4.5 million capitalised includes three additional automation
cells and the replacement of older production equipment. These investments
will enable further production efficiencies to be realised.
Machining
The machining business generated total sales of £32.1 million in the year
compared to £37.6 million in the previous year, a reduction of 14.6%. Of the
total revenue, 4.6% was generated from external customers compared to 5.0% in
2024.
The segmental result for the year was a profit of £2.0 million (2024 - £3.7
million).
There was a time-lag between the lower levels of customer demand for the group
and the reduction in the output from the machining business. This resulted in
a lower revenue and profitability reduction compared to the foundries, but
also meant that finished stock levels increased during the year.
We have invested £3.0 million during the year, which included £1.6 million
on more efficient machining capacity in line with our machine replacement
programme.
Business review and performance
Revenue
Group revenues decreased by 21.1% to £177.0 million compared to £224.4
million reported in 2024, of which 84% was exported (2024 - 85%).
The revenue from the foundry operations to external customers decreased by
21.1% to £175.5 million (2024 - £222.5 million) with the dispatch weight of
castings to third-party customers decreasing by 18.7% to 41,000 tonnes (2024 -
50,450 tonnes).
Revenue from the machining operation to external customers decreased by 21.1%
during the year to £1.5 million (2024 - £1.9 million).
Operating profit and segmental result
The group operating profit for the year was £4.8 million compared to £19.8
million reported in 2024, which represents a return on sales of 2.7% (2024 -
8.8%).
Finance income
The level of finance income decreased to £0.96 million compared to £1.53
million in 2024, reflecting the lower interest rates available on deposits
during the financial year and the reduced sums on deposit.
Profit before tax
Profit before tax has decreased to £5.6 million from £21.3 million in the
prior year.
Taxation
The tax charge of £1.45 million (2024 - £4.57 million) is made up of a
current tax charge of £0.47 million (2024 - £4.25 million) and a deferred
tax charge of £0.98 million (2024 - £0.31 million).
The effective rate of tax of 25.8% (2024 - 21.4%) is marginally higher than
the main rate of corporation tax of 25% (2024 - 25%). The effective rate in
the previous year was lower due to a credit to the deferred tax estimate
relating to the prior year.
Earnings per share
Basic earnings per share decreased 75.0% to 9.60 pence (2024 - 38.45 pence),
reflecting the 75.0% decrease in profit before tax.
Options over 66,787 shares were granted during the year (2024 - options over
37,620 shares). The company did not purchase any shares during the year (2024
- 100,000). The diluted weighted average number of shares has decreased to
43,672,384 resulting in a diluted earnings per share of 9.56 pence per share
(2024 - 38.32 pence per share).
Dividends
The directors are recommending a final dividend of 14.19 pence per share (2024
- 14.19 pence per share) to be paid on
26 August 2025 to shareholders on the register on 18 July 2025. This would
give a total ordinary distribution for the year of 18.40 pence per share (2024
- 18.32 pence per share).
Cash flow
The cash position at 31 March 2025 was £15.6 million compared to £32.5
million in the previous year.
The group generated cash from operating activities of £12.3 million compared
to £21.6 million in 2024. When compared to 2024, the variance is mainly due
to the significant reduction in operating profit of £15.6 million and a lower
working capital outflow.
In the year to 31 March 2025, the most significant increase to working capital
relates to an increase in receivables of £6.8 million compared to the start
of the year. This includes £6.7 million of payments made on the new foundry
line project which have been classified as prepayments on the basis they are
stage payments on assets not yet delivered.
Corporation tax payments, net of overpayments received relating to prior
years, during the year totalled £1.0 million compared to £2.6 million in
2024.
Capital expenditure during the year amounted to £19.8 million (2024 - £9.6
million), including £6.7 million of advanced deposit payments. As set out
previously, and the charge for depreciation was £8.9 million (2024 - £8.9
million).
The company pays pensions on behalf of the two final salary pension schemes
and then reclaims these advances from the schemes. During the year repayments
of £4.0 million (2024 - £2.1 million) were received from the schemes and
advances were paid on behalf of the schemes of £2.3 million (2024 - £2.1
million). The outstanding amount of these advances of £0.5 million will be
repaid to the company during the current financial year.
Dividends paid to shareholders were £11.0 million in the year (2024 - £14.2
million) which includes £3.0 million in relation to a supplementary dividend
in respect of the year ended 31 March 2024.
The company did not purchase any shares to be held in treasury (2024 - 100,000
shares at a total cost of £0.40 million).
The net cash and cash equivalents movement for the year was a decrease of
£17.0 million (2024 - decrease of £3.0 million).
At 31 March 2025, the total cash and deposits position was £15.7 million
(2024 - £32.5 million).
Pensions
The pension valuation showed an increase in the surplus, on an IAS 19
(Revised) basis, to £12.2 million compared to £10.9 million in the previous
year.
The majority of the liabilities of the schemes are covered by an insurance
asset that fully matches, subject to final adjustment of the bulk annuity
pricing, the remaining pension liabilities of the schemes. However, there
remains the uninsured element relating to the GMP equalisation liability.
The pension surplus continues not to be shown on the balance sheet due to the
IAS 19 (Revised) restriction of recognition of assets where the company does
not have an unconditional right to receive returns of contributions or
refunds.
Balance sheet
Net assets at 31 March 2025 were £127.4 million (2024 - £134.0 million).
Other than the total comprehensive income for the year of £4.3 million (2024
- £16.8 million), the only movements relate to the dividend payment of £11.0
million (2024 - £14.2 million) and share-based payment charge of £0.14
million (2024 - £0.10 million).
Non-current assets have increased to £68.2 million (2024 - £61.8 million).
Property, plant and equipment has increased by £4.3 million with investment
during the year being at a higher level than the depreciation charge. The
group has recognised a right-of-use asset in the year in respect of the
operating lease negotiated at the time of the Castings Ductile asset purchase;
the year end balance being £2.1 million.
Current assets have decreased to £100.1 million (2024 - £112.3 million) with
the receivables increase being offset by a reduction in cash levels.
Total liabilities have increased to £40.8 million (2024 - £40.1 million),
reduction in trade payables being offset by the recognition of lease
liabilities in respect of the property lease.
Consolidated Statement of Comprehensive Income
for the year ended 31 March 2025
2025 2024
£000 £000
Revenue 176,969 224,414
Cost of sales (149,478) (181,124)
Gross profit 27,491 43,290
Distribution costs (3,207) (4,694)
Administrative expenses (19,512) (18,837)
Profit from operations 4,772 19,759
Finance income 962 1,527
Finance expenses (107) -
Profit before income tax 5,627 21,286
Income tax expense (1,454) (4,565)
Profit for the year attributable to equity holders of the parent company 4,173 16,721
Profit for the year attributable to equity holders of the parent company 4,173 16,721
Other comprehensive income for the year:
Items that will not be reclassified to profit and loss:
Movement in unrecognised surplus on defined benefit pension schemes net of 165 112
actuarial gains and losses
Other comprehensive income for the year (net of tax) 165 112
4,338 16,833
Total comprehensive income for the year attributable to the equity holders
of the parent company
Earnings per share attributable to the equity holders of the parent company
Basic 9.60p 38.45p
Diluted 9.56p 38.32p
Consolidated Balance Sheet
as at 31 March 2025
2025 2024
£000 £000
ASSETS
Non-current assets
Property, plant and equipment 66,123 61,799
Right-of-use assets 2,056 -
Financial assets - -
68,179 61,799
Current assets
Inventories 32,780 33,136
Trade and other receivables 51,743 46,593
Cash and cash equivalents 15,564 32,527
100,087 112,256
Total assets 168,266 174,055
LIABILITIES
Current liabilities
Trade and other payables 31,557 33,329
Lease liabilities 228 -
Current tax liabilities 132 706
31,917 34,035
Non-current liabilities
Lease liabilities 1,901 -
Deferred tax liabilities 7,013 6,030
8,914 6,030
Total liabilities 40,831 40,065
Net assets 127,435 133,990
Equity attributable to equity holders of the parent company
Share capital 4,363 4,363
Share premium account 874 874
Treasury shares (627) (627)
Other reserve 13 13
Retained earnings 122,812 129,367
Total equity 127,435 133,990
Consolidated Cash Flow Statement
for the year ended 31 March 2025
2025 2024
£000
£000
Cash flows from operating activities
Profit before income tax 5,627 21,286
Adjustments for:
Depreciation of property, plant and equipment and right-of-use assets 8,898 8,851
Loss on disposal of property, plant and equipment 2 25
Finance income (962) (1,527)
Finance expenses 107 -
Equity-settled share-based payment expense 145 102
Pension administrative costs 165 112
Operating cash flow before changes in working capital 13,982 28,849
Decrease/(increase) in inventories 356 (7,041)
(Increase)/decrease in receivables (130) 4,486
Decrease in payables (1,876) (4,651)
Cash generated from operating activities 12,332 21,643
Tax paid (1,045) (2,568)
Interest received 957 1,474
Finance expenses (107) -
Net cash generated from operating activities 12,137 20,549
Cash flows from investing activities
Dividends received from listed investments 5 12
Purchase of property, plant and equipment (13,078) (9,584)
Advanced payments in respect of property, plant and equipment (6,676) -
Proceeds from disposal of property, plant and equipment 31 191
Proceeds from sale of financial assets - 397
Repayments from pension schemes 3,990 2,120
Advances on behalf of the pension schemes (2,334) (2,119)
Net cash used in investing activities (18,062) (8,983)
Cash flows from financing activities
Dividends paid to shareholders (11,038) (14,209)
Purchase of own shares - (396)
Net cash used in financing activities (11,038) (14,605)
Decrease in cash and cash equivalents (16,963) (3,039)
Cash and cash equivalents at beginning of year 32,527 35,566
Cash and cash equivalents at end of year 15,564 32,527
Cash and cash equivalents:
Short-term deposits 554 13,230
Cash available on demand 15,010 19,297
15,564 32,527
Consolidated Statement of Changes in Equity
for the year ended 31 March 2025
Equity attributable to equity holders of the parent
Share Share Treasury shares(c)) Other Retained Total
capital(a)) premium(b)) £000 reserve(d)) earnings(e)) equity
£000 £000 £000 £000 £000
At 1 April 2024 4,363 874 (627) 13 129,367 133,990
Profit for the year - - - - 4,173 4,173
Other comprehensive income:
Movement in unrecognised surplus on defined benefit pension schemes net of - - - - 165 165
actuarial gains and losses
Total comprehensive income for the year - - - - 4,338 4,338
Equity-settled share-based payments - - - - 145 145
Dividends (see note 4) - - - - (11,038) (11,038)
At 31 March 2025 4,363 874 (627) 13 122,812 127,435
Equity attributable to equity holders of the parent
Share Share Treasury shares(c)) Other Retained Total
capital(a)) premium(b)) £000 reserve(d)) earnings(e)) equity
£000 £000 £000 £000 £000
At 1 April 2023 4,363 874 (231) 13 126,641 131,660
Profit for the year - - - - 16,721 16,721
Other comprehensive income/(losses):
Movement in unrecognised surplus on defined benefit pension schemes net of - - - - 112 112
actuarial gains and losses
Total comprehensive income for the year - - - - 16,833 16,833
Shares acquired in the year - - (396) - - (396)
Equity-settled share-based payments - - - - 102 102
Dividends (see note 4) - - - - (14,209) (14,209)
At 31 March 2024 4,363 874 (627) 13 129,367 133,990
a) Share capital - The nominal value of allotted and fully paid up
ordinary share capital in issue.
b) Share premium - Amount subscribed for share capital in excess of
nominal value.
c) Treasury shares - Value of shares acquired by the company.
d) Other reserve - Amounts transferred from share capital on redemption of
issued shares.
e) Retained earnings - Cumulative net gains and losses recognised in the
statement of comprehensive income.
Financial Information
1 Basis of preparation
The group financial statements have been prepared in accordance with
UK-adopted international accounting standard in conformity with the
requirements of the Companies Act 2006.
The IFRSs applied in the group financial statements are subject to ongoing
amendment by the IASB and therefore subject to possible change in the future.
Further standards and interpretations may be issued that will be applicable
for financial years beginning on or after 1 April 2025 or later accounting
periods but may be adopted early.
The preparation of financial statements in accordance with IFRS requires the
use of certain accounting estimates. It also requires management to exercise
its judgement in the process of applying the group's accounting policies.
The primary statements within the financial information contained in this
document have been presented in accordance with IAS 1 Presentation of
Financial Statements.
The financial statements are prepared on a going concern basis and under the
historical cost convention, except where adjusted for revaluations of certain
assets, and in accordance with applicable Accounting Standards and those parts
of the Companies Act 2006 applicable to companies reporting under IFRS. A
summary of the principal group IFRS accounting policies is set out below. The
presentation currency used is sterling and the amounts have been presented in
round thousands ("£000").
2 Operating segments
For internal decision-making purposes, the group is organised into four
operating companies which are considered to be the operating segments of the
group: Castings P.L.C., William Lee Limited and Castings Ductile Limited are
aggregated into Foundry operations, due to the similar nature of the
businesses, and CNC Speedwell Limited is the Machining operation. All
non-current assets are based in the United Kingdom. Inter-segment transactions
are entered into under the normal commercial terms and conditions that would
be available to third parties.
The following shows the revenues, results and total assets by reportable
segment in the year to 31 March 2025:
Foundry Machining Elimination Total
operations operations £000 £000
£000 £000
Revenue from external customers 175,492 1,477 - 176,969
Inter-segmental revenue 22,447 30,655 (53,102) -
Segmental result (profit from operations before pension cost) 2,894 2,028 15 4,937
Unallocated costs:
Defined benefit pension cost (165)
Finance income 962
Finance expenses (107)
Profit before income tax 5,627
Total assets 153,887 28,485 (14,106) 168,266
Non-current asset additions 10,203 2,988 - 13,191
Depreciation (including right-of-use asset depreciation) 5,027 3,871 - 8,898
Total liabilities (42,976) (6,677) 8,822 (40,831)
The following shows the revenues, results and total assets by reportable
segment in the year to 31 March 2024:
Foundry Machining Elimination Total
operations operations £000 £000
£000 £000
Revenue from external customers 222,542 1,872 - 224,414
Inter-segmental revenue 28,433 35,774 (64,207) -
Segmental result (profit from operations before pension cost) 16,184 3,719 (32) 19,871
Unallocated costs:
Defined benefit pension cost (112)
Finance income 1,527
Profit before income tax 21,286
Total assets 156,605 30,822 (13,372) 174,055
Non-current asset additions 5,179 5,334 - 10,513
Depreciation 5,069 3,782 - 8,851
Total liabilities (40,424) (7,719) 8,078 (40,065)
2025 2024
£000 £000
The geographical analysis of revenues by destination for the year is as
follows:
United Kingdom 28,742 34,296
Sweden 50,623 63,814
Germany 25,056 36,926
Netherlands 25,962 35,400
Rest of Europe 29,195 35,889
North and South America 16,462 16,927
Other 929 1,162
176,969 224,414
All revenue arises in the United Kingdom from the group's continuing
activities.
3 Income tax expense
2025 2024
£000
£000
Corporation tax based on a rate of 25% (2024 - 25%)
UK corporation tax
Current tax on profits for the year 531 4,425
Adjustments to tax charge in respect of prior years (60) (171)
471 4,254
Deferred tax
Current year origination and reversal of temporary differences 999 1,011
Adjustment to deferred tax charge in respect of prior years (16) (700)
983 311
Taxation on profit 1,454 4,565
Profit before income tax 5,627 21,286
Tax on profit at the standard rate of corporation tax 1,407 5,322
in the UK of 25% (2024 - 25%)
Effect of:
Expenses not deductible for tax purposes 82 86
Adjustment to tax charge in respect of prior years (60) (171)
Adjustment to deferred tax charge in respect of prior years (16) (700)
Pension adjustments 41 28
Total tax charge for the year 1,454 4,565
Effective rate of tax (%) 25.8 21.4
4 Dividends
2025 2024
£000 £000
Final paid of 14.19p per share for the year ended 31 March 2024 (2023 - 6,167 5,881
13.51p)
Interim paid of 4.21p per share (2024 - 4.13p) 1,829 1,794
Supplementary dividend of 7.00p per share for the year ended 31 March 2024 3,042 6,534
(2023 - 15.00p)
11,038 14,209
The directors are proposing a final dividend of 14.19 pence (2024 - 14.19
pence) per share totalling £6,166,700 (2024 - £6,166,700). This dividend has
not been accrued at the balance sheet date.
5 Earnings per share and diluted earnings per share
The calculation of the basic and diluted earnings per share is based on the
following data:
2025 2024
Profit after taxation (£000) 4,173 16,721
Weighted average number of shares - basic calculation 43,458,068 43,488,441
Earnings per share - basic calculation (pence per share) 9.60p 38.45p
Number of dilutive share options in issue 214,316 147,529
Weighted average number of shares - diluted calculation 43,672,384 43,635,970
Earnings per share - diluted calculation (pence per share) 9.56p 38.32p
6 Property, plant and equipment
Freehold Plant and equipment Total
land and £000 £000
buildings
£000
Cost
At 1 April 2024 41,501 166,031 207,532
Additions during the year 744 12,447 13,191
Disposals - (8,512) (8,512)
At 31 March 2025 42,245 169,966 212,211
Accumulated depreciation
At 1 April 2024 14,689 131,044 145,733
Charge for year 968 7,866 8,834
Disposals - (8,479) (8,479)
At 31 March 2025 15,657 130,431 146,088
Net book values
At 31 March 2025 26,588 39,535 66,123
At 31 March 2024 26,812 34,987 61,799
Cost
At 1 April 2023 40,957 160,396 201,353
Additions during the year 544 9,969 10,513
Disposals - (4,334) (4,334)
At 31 March 2024 41,501 166,031 207,532
Accumulated depreciation
At 1 April 2023 13,720 127,280 141,000
Charge for year 969 7,882 8,851
Disposals - (4,118) (4,118)
At 31 March 2024 14,689 131,044 145,733
Net book values
At 31 March 2024 26,812 34,987 61,799
At 31 March 2023 27,237 33,116 60,353
The net book value of land and buildings includes £2,168,000 (2024 -
£2,168,000) for land which is not depreciated.
Included within plant and equipment are assets in the course of construction
with a net book value of £5,630,000 (2024 - £890,000) which are not
depreciated.
7 Commitments and contingencies
2025 2024
£000 £000
Capital commitments contracted for by the group but not provided for in the 7,376 16,151
financial statements
Capital commitments primarily relate to the investment in the new foundry
line.
The group does not insure against the potential cost of product warranty or
recall. Accordingly, there is always the possibility of claims against the
group for quality related issues on parts supplied to customers. As at 31
March 2025, the directors do not consider any significant liability will arise
in respect of any such claims (2024 - £nil).
8 Pensions
The company operates two defined benefit pension schemes which were closed to
future accruals at 6 April 2009. The funded status of these schemes at 31
March 2024 was a surplus of £12,233,000 (2024 - £10,863,000). On 24 March
2020, the Trustees of the schemes completed a bulk annuity insurance buy-in
with Aviva Life & Pensions UK Limited thus providing certainty and
security for all members of the schemes. The buy-in secures an insurance asset
from Aviva that fully matches, subject to final price adjustment of the bulk
annuity pricing, the remaining pension liabilities of the schemes. The buy-in
covers the investment, longevity, interest rate and inflation risks in respect
of the schemes and therefore substantially reduces the pension risk to the
company.
The pension surplus has not been recognised as the group does not have an
unconditional right to receive returns of contributions or refunds under the
scheme rules.
9 Preliminary statement
The financial information set out above does not constitute the company's
statutory financial statements for the years ended 31 March 2025 or 2024 but
is derived from those financial statements. Statutory financial statements for
2024 have been delivered to the Registrar of Companies and those for 2025 will
be delivered following the company's Annual General Meeting. The auditors have
reported on those financial statements; their reports were unqualified, did
not include references to any matters to which the auditors drew attention by
way of emphasis without qualifying their reports and did not contain
statements under Section 498 of the Companies Act 2006.
The annual report and financial statements will be posted to shareholders on
20 June 2025 and will be available on the company's website,
www.castings.plc.uk, from 23 June 2025.
Appendix 1 - Principal Risks and Uncertainties
In common with all trading businesses, the group is exposed to a variety of
risks in the conduct of its normal business operations.
The directors regularly assess the principal risks facing the entity. Whilst
it is difficult to completely quantify every material risk that the group
faces, below is a summary of those risks that the directors believe are most
significant to the group's business and could have a material impact on future
performance, causing it to differ materially from expected or historic
achieved results.
Information is also provided as to how the risks are, where possible, being
managed or mitigated.
The group does not operate a formal internal audit function; however, risk
management is overseen by senior management and group risk registers are
maintained and regularly reviewed, alongside factors which may result in
changes to risk assessments or require additional mitigation measures to be
implemented.
External consultants are used to assess the design and effectiveness of
controls relating to IT security to provide specialist support to management
in this area.
Key risks arising or increasing in impact are reviewed at both group and
subsidiary board meetings.
The impact of each risk set out below has been described as increased, stable
or decreased dependent upon whether the business environment and group
activity has resulted in a change to the potential impact of that risk.
Risk description Impact Mitigation and control
Markets and competition
The group's revenues are dominated by the commercial vehicle sector which is a Stable The group's operations are set up in such a way as to ensure that variation in
cyclical market exposed to macroeconomic trends.
demand can be accommodated and rapidly responded to.
The operational and commercial activity of the business is driven by customer
Global conflicts have continued in the year with inflation and interest rates, demand. Demand has the potential to change rapidly dependent upon the Demand is closely reviewed by senior management on a constant basis.
whilst falling, remaining elevated. These factors are impacting both the significant variable factors in the macroeconomic environment such as
underlying demand for heavy goods vehicles and the affordability and timing of inflation, interest rate changes or changing regulatory positions. Whilst there can be no guarantee that business will not be lost on price, we
investment decisions by fleet operators.
are confident that we can remain competitive.
Erosion of market share could result in loss of revenue and profit
A high level of competition could lead to deflation in prices. Global sourcing
The group continues to mitigate this risk through investment in productivity,
models could also result in resourcing of work to low cost economies. with a strong focus on cost and customer value.
A number of customers are now sourcing for common base engine parts and
modular chassis, therefore there is pressure to ensure this business is
generated by the group against global competition.
Customer concentration and relationships
The group has relationships with key customers in the commercial vehicle Stable We build strong relationships with our customers to develop products to meet
market which forms the majority of the customer base.
their specific needs. The ability to supply larger castings (up to 7 tonnes)
The loss of, or deterioration in, any major customer relationship could have a through the new Castings Ductile business provides opportunity to reduce
material impact on the group's results. customer concentration.
Product quality and liability
The group's businesses expose it to certain product liability risks which, in Stable Whilst it is a policy of the group to endeavour to limit its financial
the event of failure, could give rise to material financial liabilities.
liability by contract in all long-term agreements ('LTAs'), it is not always
Fines or penalties could result in a loss of revenue, additional costs and possible to secure such limitations.
reduced profits.
The group's customers do require the maintenance of demanding quality systems
to safeguard against quality-related risks and the group maintains appropriate
external quality accreditations. The group maintains insurance for public
liability-related claims but does not insure against the risk of product
warranty or recall.
Technological change
Sustainability and climate change mean that customers continue to invest in Stable The strategic focus of the group is a matter addressed through group board
the development of synthetic fuels, electric and hydrogen powered vehicles to
meetings.
reduce the emissions produced by the heavy-duty truck sector. The group continues to work with key customers producing the next generation
of internal combustion engine ('ICE') commercial vehicles, whilst monitoring Consideration is given to what opportunities might be available within
The initial phase of this is focussed on passenger cars and smaller, opportunities for the future. alternative light-weight metals such as aluminium, value added opportunities
short-range trucks which are not key markets for the group. However, the
and also investigating the potential within hydrogen fuel cells (considered to
continued development of new technology does present a medium-term risk to the be the most likely replacement technology for heavy-duty trucks).
group as c. 30% of group revenue arises from the supply of cast iron
powertrain components. Customers continue to invest in green iron solutions, the conditions for which
the group already satisfies, and demonstrate a commitment to transition to a
It is important to note that such a change also presents an opportunity for green iron supply chain by 2030.
the group to evolve its product offering, as has always been the case over the
years. Electricity contracts have been fully REGO backed since October 2022 and from
October 2023 our gas is purchased alongside contractual carbon offsets. This
provides a platform to support customers' green iron aspirations.
Foreign exchange
The group is exposed to foreign exchange risk on both sales and purchases Stable The group's foreign exchange risk is well-mitigated through commercial
denominated in currencies other than sterling, being primarily the euro and US
arrangements with key customers.
dollar. The group is exposed to gains or losses that could be material to the group's
financial results and can increase or decrease how competitive the group's Foreign exchange rate risk is sometimes partially mitigated by using forward
pricing is to overseas markets. foreign exchange contracts. Such contracts are short term in nature, matched
to contractual cash flows and non-speculative.
Equipment
The group operates a number of specialist pieces of equipment, including Stable Whilst this risk cannot be entirely mitigated without the uneconomic
foundry furnaces, moulding lines and CNC milling machines which, due to
duplication of all key equipment, the plant is maintained to a high standard
manufacturing lead times, would be difficult to replace sufficiently quickly A large incident could disrupt business at the site affected and result in and inventories of strategic equipment spares are maintained.
to prevent major interruption and possible loss of business in the event of significant rectification costs or material asset impairments.
unforeseen failure. The foundry facilities at Brownhills and Dronfield have similar equipment and
work can be transferred from one location to another very quickly.
Additional flexibility and resilience will be provided through investments in
a new foundry based in Dronfield and the ongoing gradual machine replacement
programme at CNC Speedwell.
Suppliers
The group holds long-standing relationships with key suppliers and there is a Stable Although the group takes care to ensure alternative sources of supply remain
risk that a business which the group is critically dependent upon could be
available for materials or services on which the group's businesses are
subject to significant disruption and that this could materially impact the The risk of a supplier's business interruption remains very high due to the critically dependent, this is not always possible to guarantee without risk of
operations of the group. current global business environment. short-term business disruption, additional costs and potential damage to
relationships with key customers.
There are specifically high risks of supply disruption as a result of current
geopolitical instability. The group continues to maintain productive dialogue with key suppliers,
working together to adjust to changes to the business environment.
Commodity and energy pricing
The group is exposed to the risk of price inflation on raw materials and Decreased Wherever possible, prices and quantities (except steel) are secured through
energy contracts.
long-term agreements with suppliers. In general, the risk of price inflation
Changes to the pricing of the group's commodity and energy purchases could of these materials resides with the group's customers through price adjustment
The principal metal raw materials used by the group's businesses are steel materially impact the financial performance of the group if no mitigating clauses.
scrap and various alloys. The most important alloy raw material inputs are actions were taken.
premium graphite, magnesium ferro-silicon, copper, nickel and molybdenum.
Historically, energy contracts have been locked in for at least 12 months.
There remains some volatility in power markets due to the current conflict in With the volatile power market, following the end of our fixed price contract
The availability, and therefore price, of steel scrap has the potential to be Ukraine. The impact upon pricing has reduced during the year and whilst on 30 September 2022, the group entered into a flexible power agreement and as
a risk to the group as a result of steel producers transitioning from blast tensions remain in the Middle East, prices have become more stable than we markets stabilise we continue to review the most appropriate arrangement
furnaces to electric arc furnaces. have seen for the past two years. moving forwards.
At 31 March 2025 a proportion of power purchased is no longer required for the
groups own consumption as a result of lower demand. The excess power has been
sold back to the market, resulting in an onerous contract provision of £0.7
million at the year end.
Information technology, cyber security and systems reliability
The group is dependent on its information technology ('IT') systems to operate Stable We continuously update our systems to mitigate current threats and align with
its business efficiently, without failure or interruption.
good industry practice, including regular back-up schedules and, where
Significant failures to the IT systems of the group as a result of external appropriate, hardware duplication.
The group continues to invest in IT systems to aid in the operational factors could result in operational disruption and a negative impact on
performance of the group and its reporting capabilities. customer delivery and reporting capabilities. We regularly discuss these risks at board level to ensure it remains a key
focus area.
There are increasing global threats faced by these systems as a result of
sophisticated cyberattacks. Security awareness training is conducted for all relevant employees, including
phishing simulation exercises. We also conduct external penetration testing
and continue to evaluate additional security solutions.
Regulatory and legislative compliance
The group must comply with a wide range of legislative and regulatory Stable The group maintains a comprehensive range of policies, procedures and training
requirements including modern slavery, anti-bribery and anti-competition
programmes in order to ensure that both management and relevant employees are
legislation, taxation legislation, employment law and import and export Failure to comply with legislation could lead to substantial financial informed of legislative changes and it is clear how the group's business is
controls. penalties, business disruption, diversion of management time, personal and expected to be carried out.
corporate liability and loss of reputation.
Whistleblowing procedures and an open-door management style are in place to
enable concerns to be raised and addressed.
Specialist advice is made available to management when required to ensure that
the group is up to date with changes in regulation and legislation.
Climate change
The group's operations are energy intensive by their nature and therefore Stable The group continues to develop its ESG strategy, reporting and practices and
result in greenhouse gas emissions being produced, which either require
has appointed a Head of Sustainability to support this.
reducing or offsetting. It is expected that green taxes on energy and the compliance cost of meeting
developing reporting obligations for our stakeholders will result in increased The ESG working group continues to monitor ESG strategy, risks, opportunities
Whilst the group considers that its businesses provide fundamental components energy prices and administrative expenses. and developments.
and services which will prove resilient in a transition towards a net zero
economy, it also recognises policy targets have been set which may result in Opportunities may present themselves as a result of the group's early adoption The group is evolving its ESG reporting to communicate the positive story we
changes to the wider economy and societal attitudes towards industry. of green iron principles and strong sustainability credentials. have to tell, including our early adherence to green iron standard which is
based on the fundamentals of electric furnaces, renewable energy and the use
A fall in investor demand in the industrial sector could negatively impact of scrap steel.
share values; it is important to ensure that the group's sustainability
strategy is communicated appropriately to ensure that stakeholders are aware The group is now powered by 100% renewable power and carbon offset gas, with a
of the group's progressive net zero position for scope 1 and 2 emissions, number of on-site renewables projects either under way or under application.
alongside the fact that the group is already well invested with plant that can
support our customers' green iron aspirations (such as electric induction The group operates in locations where the physical risks of climate change are
furnaces). relatively low but will continue to engage with and understand the needs of
its stakeholders in this area.
The risk of business disruption due to extreme weather events may also
increase if policy targets are not met. Insurance policies are maintained in relation to the group's property, plant
and equipment.
People risk
The group's operations depend upon the availability of both skilled and Stable The group looks to provide safe, stable and long-term employment at
unskilled labour to operate manual equipment and fulfil our strategic goals.
competitive rates of pay.
The inability to attract and retain talent could result in either a shortage
The nature of our activities and the equipment operated presents inherent of staff or a reduction in operating margins. We invest in people development, including a structured apprenticeship
health and safety risks. Our operations, if not properly managed, could have a
programme, and utilise technology and productivity gains to ensure that our
significant impact on individual employees. Furthermore, poor safety and products remain competitively priced.
health practices could lead to disruption of business, financial penalties and
loss of reputation. We have clearly defined health and safety policies and practices which we
regularly review and modify as circumstances and experiences dictate.
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