REG - Castings PLC - Half Yearly Report <Origin Href="QuoteRef">CGS.L</Origin>
RNS Number : 5725FCastings PLC13 November 2015Castings 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
30September
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 RNSThe company news service from the London Stock ExchangeENDIR BTBFTMBBBBMA
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