Final Results

Castings PLC 19 May 2006 Castings plc FINANCIAL REPORT 2006 Chairman's Statement Profit before tax for the year ended 31st March 2006 was £12,701,000 compared with £9,632,000 in the year to 31st March 2005. It is pleasing to report a satisfactory result for the year ending March 2006. The company has enjoyed a good period of trading during the majority of the year and it has enabled us to maintain stable employment throughout. Raw material prices, although at a high level, have settled down after the Chinese/Indian effect on all steel and associated products. We are now moving into uncertainty because of two factors. Firstly we have a further deficit with our final salary pension schemes which at the last actuarial valuation amounted to £6.5m. We paid £2.1m in the year and the balance will be paid during the current financial year. Secondly and more seriously is future electricity prices. We expect electricity prices to rise considerably when we renew our existing two year contract in October. It is anticipated that prices will rise by 80 to 100% and cost the group some £3.5m on an annual basis. Discussions have already commenced with our customers to recover this imposed expense. The full effect of such increases is unknown at the present time, which is a very unsatisfactory position in which to find ourselves. It also appears that UK electricity prices are well in excess of European prices which once again places UK manufacturing at a considerable disadvantage not only to the Far East, but also Europe. BRIAN J. COOKE Chairman 19 May 2006 Castings plc Lichfield Road Brownhills West Midlands WS8 6JZ Consolidated Income Statement Year to Year to 31st March 2006 31st March £'000 2005 £'000 Total revenue 76,696 69,037 ----------- ---------- Operating profit 11,561 8,566 Finance income 1,140 1,066 ----------- ---------- Profit before income tax 12,701 9,632 Income tax expense 3,946 2,840 ----------- ---------- Profit for the year 8,755 6,792 ----------- ---------- Earnings per share Basic and diluted 20.07p 15.57p ----------- ---------- Dividend per share paid 8.88p 8.49p =========== ========== Dividend per share proposed 9.20p 8.79p =========== ========== All operations are continuing Consolidated Balance Sheet 31st March 31stMarch 2006 2005 £'000 £'000 Assets Non-current assets Property, plant and equipment 32,566 33,163 Financial assets 1,139 984 Deferred tax asset 574 1,877 ----------- ---------- 34,279 36,024 ----------- ---------- Current assets Inventories 5,276 5,459 Trade and other receivables 20,449 16,781 Cash and cash equivalents 27,686 25,074 ----------- ---------- 53,411 47,314 ----------- ---------- Total assets 87,690 83,338 ----------- ---------- Liabilities Current liabilities Trade and other payables 15,063 12,993 Current tax liabilities 1,808 1,332 ----------- ---------- 16,871 14,325 ----------- ---------- Non-current liabilities Retirement Benefit Obligations 1,913 6,257 Deferred tax liabilities 1,781 2,025 ----------- ---------- 3,694 8,282 ----------- ---------- Total liabilities 20,565 22,607 ----------- ---------- Net Assets 67,125 60,731 ----------- ---------- Shareholders' equity Share Capital 4,363 4,363 Share premium account 874 874 Other reserves 13 13 Retained earnings 61,875 55,481 ----------- ---------- Total equity 67,125 60,731 ----------- ---------- Consolidated Cash Flow Year to Year to 31st March 31st March 2006 2005 £'000 £'000 Cash flows from operating activities Cash generated from operations 12,678 11,100 Interest received 1,140 1,066 Tax paid (3,060) (2,120) ----------- ---------- Net cash generated from operating activities 10,758 10,046 Cash flows from investing activities Purchase of property, plant and equipment (4,301) (7,496) Proceeds from disposal of property, plant and equipment 9 761 Proceeds from disposal of investments 21 74 ----------- ---------- Net cash used in investing activities (4,271) (6,661) Cash flow from financing activities Dividends paid to shareholders (3,875) (3,704) ----------- ---------- Net cash used in financing activities (3,875) (3,704) Net increase/(decrease) in cash and cash equivalents 2,612 (319) Cash and cash equivalents at beginning of year 25,074 25,393 ----------- ---------- Cash and cash equivalents at end of year 27,686 25,074 ----------- ---------- Consolidated Statement of Recognised Income and Expense Year to Year to 31st March 31st March 2006 2005 £'000 £'000 Profit for the year 8,755 6,792 Changes in fair value of available for sale financial assets 176 101 Actuarial (losses)/gains on defined pension schemes 1,987 88 Tax effect of gains and losses recognised directly in equity (649) (56) ----------- ---------- Total recognised income for the year 10,269 6,925 ----------- ---------- Supplementary Statement Reconciliation of operating profit to net cash inflow from operating activities Year to Year to 31st March 31stMarch 2006 2005 £'000 £'000 Profit before income tax 12,701 9,632 Depreciation 4,889 4,617 Interest received (1,140) (1,066) Excess of employer pension contributions over income statement charge (2,357) - (Increase)/decrease in inventories 183 (932) (Increase) in receivables (3,668) (3,084) Increase in payables 2,070 1,933 ----------- ---------- Net cash inflow from operating activities 12,678 11,100 ----------- ---------- Castings plc Notes to the financial report Basis of preparation This is the first year when the consolidated financial statements have been prepared under International Financial Reporting Standards (IFRS) adopted by the EU. The comparatives for 2005 have accordingly been restated from UK Generally Accepted Accounting Practice (GAAP). The accounting polices of the Group under IFRS, including the exemptions taken under IFRS 1 'First-time Adoption of International Financial Reporting Standards', together with the restated IFRS financial statements for 2005, which include reconciliations of UK GAAP to IFRS, are set out in detail in the interim statement published on 24th November 2005 and will be included in the full 2006 annual report and accounts. 1. Dividends The Board are proposing a final dividend amounting to 6.67 pence per share (2005:6.35p). An interim dividend of 2.53p per share (2005:2.44p) has already been paid, making the total dividend for the year 9.20p per share (2005:8.79p). The Annual General Meeting will be held on Tuesday 15th August 2006 and if the proposed final dividend is approved by the members,the dividend will be paid on 18th August 2006 to shareholders registered on 21st July 2006. 2. The basic and diluted earnings per share are based on the weighted average number of shares in issue of 43,632,068 in 2006 and in 2005. 3. The financial information set out above does not constitute the company's statutory accounts within the meaning of section 240 of the Companies Act 1985. The 2006 figures are based on unaudited accounts for the year ended 31st March 2006. The auditors do not expect to issue a qualified report on the statutory accounts which will be finalised on the basis of the financial information presented by the directors in the preliminary announcement and which will be delivered to the Registrar of Companies following the company's annual general meeting. Statutory accounts for 2005, which were based on UK GAAP, have been delivered to the Registrar of Companies. The auditors at that time reported on those accounts; their report was unqualified and did not contain statements under the Companies Act 1985, S237 (2) or (3). Reconciliation of Equity at 31st March 2006 UK GAAP Effect of IFRS transition to IFRS £'000 £'000 £'000 Property, plant and equipment 32,566 32,566 Investments (b) 609 530 1,139 Deferred tax asset - 574 574 -------- ---------- -------- Non-current assets 33,175 1,104 34,279 -------- ---------- -------- Current assets Inventories 5,276 5,276 Trade and other receivables 20,449 20,449 Cash and cash equivalents 27,686 27,686 -------- -------- Current assets 53,411 53,411 -------- -------- Current liabilities Trade and other payables (15,063) (15,063) Current tax liabilities (1,808) (1,808) Retirement benefit obligations (a) - (1,913) (1,913) Deferred tax (1,635) (146) (1,781) -------- ---------- -------- Total liabilities (18,506) (2,059) (20,565) -------- ---------- -------- Total assets less Total liabilities 68,080 (955) 67,125 -------- ---------- -------- Shareholders' equity Share capital 4,363 4,363 Share premium account 874 874 Other reserves 13 13 Retained earnings 62,830 (955) 61,875 -------- ---------- -------- Total equity 68,080 (955) 67,125 -------- ---------- -------- Reconciliation of profit for the year ended 31st March 2006 Reconciliation for the year ended 31st March 2006 UK GAAP Effect of Transition to IFRS IFRS £'000 £'000 £'000 Revenue 76,696 76,696 ------- -------- Group Operating Profit 9,204 2,357 11,561 Finance Income 1,140 1,140 ------- -------- Profit Before Tax 10,344 12,701 Income Tax (3,252) (694) (3,946) ------- ---------- -------- Net Profit 7,092 1,663 8,755 ------- ---------- -------- Explanation of reconciling items between UK GAAP and IFRS a) Retirement benefit schemes - Accounting for pensions in accordance with IAS 19 requires the pension asset/liability to be brought onto the balance sheet. We have chosen to apply the amendment to IAS19 which allows actuarial gains and losses to be recognised immediately in the Statement of Recognised Income and Expense i.e. actuarial gains and losses will be taken directly to reserves. b) Investments - Under UK company law, companies accounted for investments at cost and showed the market value by way of a note. Under IAS the fair value (based on market prices) is shown on the balance sheet requiring an uplift of £530,000 at 31st March 2006 (2005 : £354,000) This information is provided by RNS The company news service from the London Stock Exchange

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