Final Results

RNS Number : 4287X

Castings PLC

25 June 2008

 

Castings plc

FINANCIAL REPORT 2008

Chairman's Statement

Turnover has increased from £86.2m to £97.4m and profit before income tax is up from £13.06m to £16.66m compared to last year.

An interim dividend of 2.71 pence per share was paid in January 2008. Your board recommends a final dividend of 7.29 pence per share compared with 6.94 pence per share last year.

Foundry Companies

Both Castings Brownhills and William Lee Ltd have enjoyed high demand for their castings during the year and despite pressure on costs due to continual increases in raw materials such as steel scrap, pig iron and alloy materials, the companies have managed to improve productivity and maintain margins.

The new foundry development at our William Lee site is progressing at full speed and with good co-operation from the local planning departments it has enabled us to commence the building without any delay. It is planned to start production early in 2009.

Continual investments are made at both Castings Brownhills and William Lee to update plant and improve productivity in order to maintain our competitiveness in the market and improve working conditions.

CNC Speedwell Ltd

The turnover has increased during the year by 21.4%, and the profits improved again. The company continues to win new orders from existing customers to such an extent that we have now re-opened our Fradley Park site.  This has led to considerable refurbishment and moving costs being incurred during the year. We expect, with new contracts due to start production early in 2009, to be investing in new machines during this financial year and it is hoped benefits will come through during the second half of 2009, providing the market conditions remain favourable.

Prospects

It is extremely difficult to forecast the company's prospects for the coming year. Many external factors, such as forecasts given by customers and general order intake, have to be taken into account.

The outlook on demand at the present time is satisfactory, although we are now seeing adjustments in schedules from some customers, which are offset by increases from others. The rapid increases in steel scrap, pig iron and alloy prices since January 2008 are unprecedented in the market. These increases at such high levels have to be recovered and there is always a delay in recovery which will no doubt affect the first half results this year.  We also expect further substantial energy cost increases in October 2008.

It is impossible to say how future demand will be affected by these unprecedented rises in costs; this has never occurred previously so we are moving into the unknown. It could be described as a 'crazy' situation. 

Whatever the outcome of the current situation, however, the company is financially strong and is well placed to come through what may prove to be a difficult period.

Employees

Once again, on behalf of the board and the shareholders, I wish to thank all our employees for their support during this past year and it is hoped the current economic situation does not affect our employment levels and we can continue to grow and employ more people.

                            BRIAN J. COOKE

                                    Chairman

25 June 2008

Castings plc                            
Lichfield Road
Brownhills
West Midlands
WS8 6JZ

Consolidated Income Statement

	Year to 31 March 2008 £’000		Year to 31 March 2007 £’000
Revenue	97,372		86,230
Profit from operations	15,250		11,560
Finance income	1,414		1,497
Profit before income tax	16,664		13,057
Income tax expense	(4,668)		(3,647)
Profit for the year	11,996		9,410
Earnings per share
Basic and diluted	27.49p		21.57p
Dividend per share paid and proposed	10.00p		9.52p
Dividend per share proposed	7.29p		6.94p

Consolidated Balance Sheet

	31 March 2008 £’000		31 March 2007 £’000
Assets
Non-current assets
Property, plant and equipment	38,772		35,495
Financial assets	736		823
	39,508		36,318
Current assets
Inventories	7,054		6,318
Trade and other receivables	22,588		21,784
Cash and cash equivalents	31,494		25,452
	61,136		53,554
Total assets	100,644		89,872
Liabilities
Current liabilities
Trade and other payables	18,589		16,212
Current tax liabilities	1,816		883
	20,405		17,095
Non-current liabilities
Retirement benefit obligations	-		-
Deferred tax liabilities	2,382		2,141
	2,382		2,141
Total liabilities	22,787		19,236
Net Assets	77,857		70,636
Equity attributable to equity holders of the parent company
Share capital	4,363		4,363
Share premium account	874		874
Other reserves	13		13
Retained earnings	72,607		65,386
Total equity	77,857		70,636

Consolidated Cash Flow 

	Year to 31 March 2008 £’000		Year to 31March 2007 £’000
Cash flows from operating activities
Cash generated from operations	21,440		12,582
Interest received	1,414		1,497
Tax paid	(3,462)		(2,858)
Net cash generated from operating activities	19,392		11,221
Cash flows from investing activities
Purchase of property, plant and equipment	(9,354)		(9,637)
Purchase of financial assets	-		(47)
Proceeds from disposal of property, plant and equipment	214		45
Proceeds from disposal of financial assets	-		220
Net cash used in investing activities	(9,140)		(9,419)
Cash flow from financing activities
Dividends paid to shareholders	(4,210)		(4,036)
Net cash used in financing activities	(4,210)		(4,036)
Net increase/(decrease) in cash and cash equivalents	6,042		(2,234)
Cash and cash equivalents at beginning of year (see below)	25,452		27,686
Cash and cash equivalents at end of year (see below)	31,494		25,452
	£’000		£’000
Cash and cash equivalents:
Short-term deposits	30,999		24,923
Cash available on demand	495		529
	31,494		25,452

  Consolidated Statement of Recognised Income and Expense

	Year to 31 March 2008 £’000		Year to 31  March 2007 £’000
Profit for the year	11,996		9,410
Changes in fair value of available for sale financial assets	(87)		(143)
Actuarial losses on defined benefit pension schemes	(510)		(2,500)
Tax effect of gains and losses recognised directly in equity	32		780
Total recognised income for the year	11,431		7,547

Supplementary Statement

Reconciliation of profit before income tax to net cash inflow from operating activities

	Year to 31 March 2008 £’000		Year to  31 March 2007 £’000
Profit before income tax	16,664		13,057
Depreciation (net of profit on sale of property, plant and equipment)	5,863		6,663
Interest received	(1,414)		(1,497)
Excess of employer pension contributions over income statement charge	(510)		(4,413)
Increase in inventories	(736)		(1,042)
Increase in receivables	(804)		(1,335)
Increase in payables	2,377		1,149
Net cash inflow from operating activities	21,440		12,582

Castings plc

Notes to the financial report

Basis of preparation

The financial information has been prepared under International Financial Reporting Standards (IFRS) as adopted by the EU using the same accounting policies that were used in the group financial statements for the year ended 31 March 2007.  

1. Dividends
   The Board are proposing a final dividend amounting to 7.29 pence per share (2007:6.94p). An interim dividend of 2.71p per share (2007:2.58p) has already been paid, making the total dividend for the year 10.0p per share (2007:9.52p).  The Annual General Meeting will be held on Tuesday 19 August 2008 and if the proposed final dividend is approved by the members the dividend will be paid on 22 August 2008 to shareholders registered on 25 July 2008.

2. The basic and diluted earnings per share is calculated on the profit on ordinary activities after taxation of £11,996,000 (2007: £3,028,000) and on the weighted average number of shares in issue of 43,632,068 in 2008 and in 2007. 

3. The company operates two defined benefit pension schemes. The funding status of these schemes at 31 March 2008 was a surplus of £2,748,000 (2007: £4,348,000). In accordance with IAS 19 paragraph 58b the asset has not been disclosed in this financial information.

4. The financial information set out above does not constitute the company's statutory accounts for the years ended 31 March 2008 or 2007, but is derived from those accounts. Statutory accounts for 2007 have been delivered to the Registrar of Companies and those for 2008 will be delivered following the company's annual general meeting. The auditors have reported on those accounts; 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 the Companies Act 1985, s 237(2) or (3).

 

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