Information  X 
Enter a valid email address

Castle Support Serv (CSU)

  Print      Mail a friend

Monday 13 October, 2008

Castle Support Serv

Final Results

RNS Number : 6532F
Castle Support Services PLC
13 October 2008
 



Issued by Citigate Dewe Rogerson Ltd, Birmingham

Monday, 13 October 2008

Castle Support Services Plc

('Castle' or the 'Company')

Final Results for the year ended 30 June 2008


Strong Performance benefiting from DMTS's Global Experience and Expertise


Highlights:


12 months

2008

10 months

2007


  • Revenue

£116m

£87m

  • Operating profit*

£15.4m

£10.6m

  • Profit before tax 

£18.5m

£17.6m

  • Significant cash generation of £11.9m in the period

  • Strong balance sheet; net cash available for potential expansion and investments

  • Strategic acquisition in the Middle East completed in January 2008 and producing encouraging results


* pre-pension settlement and profit on disposal


These results clearly demonstrate:

  • the strong market position held by DMTS and its experience and expertise established over many years in the UKUSA and Australasia; and


  • the considerable demand for our services in the key international sectors of energy generation, oil, gas, petrochemicals, resources, and shipping as well as the wider industrial base.


'The group continues to experience encouraging levels of activity. We are well placed to benefit from increasing demand for inspection, maintenance, and repair services for generators, motors and ancillary equipment and the ever increasing demand for energy and energy efficiency. We therefore expect to make further progress during the course of this year.'

Christopher Mills, Non-executive Chairman

FULL PRESS RELEASE ATTACHED

Enquiries:



Castle Support Services plc


Christopher Mills, Non-executive Chairman

+44 (0) 207 747 5601

Tudor Davies, Director

+44 (0) 121 766 6161

Tim Barrett, Finance Director

+44 (0) 121 766 6161

www.castlesupportservices.com


Ticker: AIMCSU.L




Citigate Dewe Rogerson


Fiona Tooley

+44 (0) 121 455 8370

Keith Gabriel

+44 (0) 7785 703523 (FMT)



Strand Partners Limited


Matthew Chandler

+44 (0) 207 409 3494

  -2-



Castle Support Services Plc



STATEMENT BY THE CHAIRMAN, CHRISTOPHER MILLS


Introduction

I am pleased to report on the results for the year ended 30 June 2008 which include the first full year's trading for DM Technical Services Limited ('DMTS') acquired on 19 June 2007.


The overall result is an excellent performance when compared with the pro-forma annualised 2007 results based on the ten-month period to 30 June 2007.

 

Revenue for the year is up by approximately 11% to £116.3m, whilst operating profit (before pension settlement and profit on disposals) significantly improved by approximately 21% to £15.4m; profit before tax was £18.5m, and profit after tax and minority interest £12.7m resulting in earnings per share of 10.04p.


These results clearly demonstrate the strong market position held by DMTS and its experience and expertise established over many years in the UKUSA and Australasia which enables us to provide specialist inspection, repair and maintenance services for generators, motors and ancillary rotating equipment.


The results are also a reflection of the considerable demand for our services in the key international sectors of energy generation, oil, gas, petrochemicals, resources, and shipping as well as the wider industrial base. There are further opportunities for expansion and growth both within and beyond our existing geographic operations.


In January 2008, we completed a strategic move into the Middle East region through the acquisition of a 50% shareholding in Intersel FZE ('Intersel') based in Dubai. In the short period of ownership to date we have been very encouraged by an improvement in its results and the opportunities to transplant our specialist expertise into this important region.


Results

The group has adopted International Financial Reporting Standards ('IFRS') for the financial year ended 30 June 2008 in accordance with the timeframe for all AIM quoted companies. The group previously applied United Kingdom Generally Accepted Accounting Practice ('UK GAAP'). A document titled 'Transition to International Financial Reporting Standards' which explains the impact of the adoption of IFRS on the group's results is available to download on the company's website (www.castlesupportservices.com) or on request from the company's head office.


The results for the year ended 30 June 2008 show revenue of £116.3m, operating profit before profit on disposal of £15.4m, profit before tax of £18.5m, and profit after tax and minority interest of £12.7m, resulting in earnings per share of 10.04p.


The minority interest of £0.2m relates to 50%, being the shares not owned by the group, of the post-acquisition profits of Intersel acquired on 2 January 2008 for a total consideration, including acquisition costs, of £1.9m. The post-acquisition revenue and profits of Intersel of £2.8m and £0.8respectively on an annualised basis represent a significant improvement of over 53% in revenue and 78% in profits when compared with the pre-acquisition results.


continued…

  -3-



Group borrowings of £10.7m (net of cash balances of £12.9m) have reduced by £13.4m during the period. The group also has unutilised debt facilities of circa £6m which, together with cash balances, represents circa £19m available for potential investment and expansion opportunities.


We have made good progress in unlocking the inherent value in the Castle pension scheme. The assets and liabilities of DMTS's pension scheme were transferred into Castle's pension scheme on 20 August 2007, and following the enhancement of the pensions of the members of the John Holt Scheme there was approximately £15m available for the DMTS section. In common with all defined benefit schemes the pension scheme's surplus has reduced during the course of the year with the fluctuations in equity markets, and the scheme's surplus on an IAS 19 basis as at 30 June 2008 was £7.3m(30 June 2007: £14.7m).


Strategy

When we acquired DMTS on 19 June 2007 we reported that our strategy was to grow the business to create value for shareholders; both organically, by marketing more proactively existing and new services to its key target sectors/customers, and through complementary acquisitions. This strategy envisaged the development of business in the Middle East and Far East as well as in each of the three Continents where DMTS already has facilities, namely EuropeAustralasia, and North America.


Since then, we have made good progress through the increase in profitability from existing facilities and also our first steps in our plans for overseas expansion with the Dubai acquisition. Intersel provides us with facilities, an experienced workforce and a platform from which to leverage the group's skills and experience plus benefit from the growth in the Middle East region.


As a market leader in a very fragmented marketplace with very few competitors with the scale or range of expertise of DMTS, there is considerable scope for expansion and consolidation. In my interim report (dated 27 March 2008), I explained that the board had decided that the opportunities were such that it should explore all available avenues to accelerate the considerable opportunities for growth, and that a strategic review would include, but not be limited, to the possibility of alliances, joint ventures, mergers and acquisitions which could also result in an offer being made by a third party for the company. This review is not yet complete and whilst it has confirmed the opportunities for growth, the board has yet to consider how we could best accelerate the leverage of our considerable expertise into a range of industrial sectors and geographic locations, both organically and by acquisition, for the benefit of the business, the employees and shareholders.


Outlook

The group continues to experience encouraging levels of activity. We are well placed to benefit from increasing demand for inspection, maintenance, and repair services for generators, motors and ancillary equipment and the ever increasing demand for energy and energy efficiency. We therefore expect to make further progress during the course of this year and I look forward to updating shareholders in due course.


Christopher Mills

Non-executive Chairman

10 October 2008


-4-



Consolidated Income Statement

for the year ended 30 June 2008




12 months

to 30 June 2008

10 months

to 30 June 2007


£'000


£'000


Revenue

116,270

87,173

Cost of sales

(83,717)

(62,764)

Gross profit

32,553

24,409

Selling and distribution costs

(4,471)

(3,536)

Administration expenses

(12,704)

(10,266)

Operating profit before pension settlement and profit on

 disposal

15,378

10,607

Gain on pension settlement

-

3,488

Profit on disposal of property, plant and equipment

454

5,610

Operating profit

15,832

19,705

Net interest payable on bank overdrafts and loans

(1,948)

(949)

Net interest receivable on bank balances

453

739

Interest payable in respect of cumulative preference shares of

 subsidiary

-

(2,263)

Net gain realised from waiver of interest due on cumulative

 preference shares

-

1,213

Interest rate swaps

787

(2,187)

Other finance income

3,371

1,346

Profit before tax

18,495

17,604

Income tax expense

(5,643)

(3,511)

Profit for the period

12,852

14,093

Profit attributable to minority interests

202

-

Profit attributable to equity shareholders

12,650

14,093


12,852

14,093

Earnings per share (EPS) - basic and diluted - pence

10.04

11.90



There are no discontinued operations.

  -5-



Consolidated Balance Sheet

As at 30 June 2008




30 June 2008

30 June 2007


£'000


£'000


Assets



Non-current assets



Goodwill

17,032

15,110

Other intangible assets

67

90

Property, plant and equipment

24,604

23,430

Retirement benefit assets

7,306

14,650

Total non-current assets

49,009

53,280

Current assets



Inventories

10,333

8,610

Trade and other receivables

22,657

20,071

Cash and cash equivalents

12,886

5,387

Total current assets

45,876

34,068




Non-current assets held for sale

-

1,862

Total assets

94,885

89,210

Liabilities



Current liabilities



Trade and other payables

(7,651)

(6,049)

Short-term liabilities

(12,783)

(9,485)

Tax liabilities

(2,040)

(852)

Bank loans and short term borrowings

(1,612)

(5,333)

Total current liabilities

(24,086)

(21,719)

Non-current liabilities



Long-term borrowings

(21,770)

(23,195)

Derivative financial instruments

(175)

(962)

Long-term provisions

(4,280)

(2,921)

Deferred tax liabilities

(2,483)

(4,364)

Total non-current liabilities

(28,708)

(31,442)

Total liabilities

(52,794)

(53,161)

Net assets

42,091

36,049

Shareholders' equity



Share capital

25,212

25,212

Reverse acquisition reserve

(13,057)

(13,057)

Foreign currency translation reserve

2,117

243

Other reserves

(50)

-

Profit and loss account

27,404

23,651

Equity shareholders' funds

41,626

36,049

Minority interests - equity

465

-

Total equity

42,091

36,049

  -6-



Consolidated Statement of Recognised Income and Expense

for the year ended 30 June 2008




12 months

to 30 June 2008

10 months

to 30 June 2007


£'000


£'000


Retained profit for the period

12,852

14,093

Income/(expense) recognised directly in equity :



Currency translation differences arising in the period

1,874

243

Actuarial (loss)/gain on retirement benefit plan

(12,345)

12,265

Taxation on actuarial (loss)/gain on retirement benefit plan

3,456

(3,434)

Change in deferred tax rate from 30% to 28%

-

(319)

Total recognised income and expense for the period

5,837

22,848




Attributable to minority interests

202

-

Attributable to equity shareholders

5,635

22,848


5,837

22,848

  -7-



Consolidated Cash Flow Statement

for the year ended 30 June 2008




12 months

to 30 June 2008

10 months

to 30 June 2007


£'000


£'000


Profit before tax

18,495

17,604

Adjustments for:



Depreciation, impairment, and amortisation

2,579

1,974

Profit on sale of property, plant and equipment

(454)

(5,149)

Actuarial gain on pension settlement

-

(5,405)

Interest payable on bank overdrafts and loans

1,948

949

Interest receivable on bank balances

(453)

(739)

Interest payable in respect of cumulative preference shares of

 subsidiary

-

2,263

Net gain realised from waiver of interest due on cumulative

 preference shares

-

(1,213)

Interest rate swaps

(787)

2,187

Other finance income

(3,371)

(1,346)

Increase in inventories

(1,133)

(1,396)

(Increase) / decrease in trade and other receivables

(1,783)

1,243

Increase / (decrease) in trade and other payables

3,327

(1,013)

Increase / (decrease) in long term provisions

1,334

(198)

Contributions to pension schemes in excess of service cost

(1,630)

(1,437)

Cash generated from operations

18,072

8,324

Interest paid

(1,948)

(949)

Income taxes paid

(2,977)

(934)

Net cash generated from operating activities

13,147

6,441

Cash flows from investing activities



Acquisition of businesses

(1,826)

(1,865)

Net (debt)/cash and (debt)/cash equivalents acquired with

 businesses

(8)

1,050

Acquisition of preference shares in subsidiary

-

(29,700)

Purchase of property, plant and equipment

(2,213)

(1,574)

Sale of property, plant and equipment

2,386

14,808

Interest received

453

739

Dividends paid to minority interests

(8)

-

Net cash used in investing activities

(1,216)

(16,542)

Cash flows from financing activities



Buy-back of shares

(50)

-

New borrowings

-

25,000

Repayments of amounts borrowed

(1,500)

(21,969)

Net cash (used in)/generated from financing activities

(1,550)

3,031

Increase/(decrease) in cash and cash equivalents

10,381

(7,070)

Cash and cash equivalents at beginning of period

1,644

8,567

Translation differences

839

147

Cash and cash equivalents at end of period

12,864

1,644

  -8-



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

for the year ended 30 June 2008



1.    Financial Statements

The consolidated financial statements are for the twelve months ended 30 June 2008. They have been prepared in accordance with the requirements of IFRS 1 'First-time Adoption of International Financial Reporting Standards'.


They have been prepared under the historical cost convention, except for the revaluation of certain financial instruments, and in accordance with the group's accounting policies which are based on the recognition and measurement principles of all IFRS and International Financial Reporting Interpretations Committee interpretations ('IFRICs') issued, effective and adopted for use in the European Union at the date of preparing this report. These IFRS and IFRICs are subject to ongoing review and possible amendment.


Castle Support Services plc's consolidated financial statements were prepared in accordance with United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice) until 30 June 2007. The date of transition to IFRS was 1 September 2006. The comparative figures in respect of 30 June 2007 and the transition date balance sheet at 31 August 2006 have been restated to reflect changes in accounting policies as a result of the adoption of IFRS.


2.    Earnings Per Share

Basic earnings per share is calculated by dividing the retained profit attributable to ordinary equity holders of the Company by the weighted average number of ordinary shares outstanding during the period.



12 months to

30 June 2008

10 months to

30 June 2007


£'000


£'000

Profit for the period

12,650 

14,093 

Weighted average number of ordinary shares in issue

126,031,043 

118,465,774 

Basic and diluted earnings per share (EPS) - pence

10.04

11.90


The weighted average number of ordinary shares in issue exclude treasury shares acquired during the year ended 30 June 2008.


There are no dilutive share arrangements in place.














continued…

  -9-



3.    Reconciliation of movement in net debt


12 months

to 30 June 2008

10 months

to 30 June 2007


£'000


£'000


Increase / (decrease) in cash and cash equivalents

10,381

(7,070)

Debt related cash flows from financing activities 

1,500

(3,031)

Amortisation of facility fee

(75)

-

Translation differences

839

362

Movement in interest rate swaps

787

(2,187)

Preference shares eliminated on consolidation

-

27,000


13,432

15,074

Net debt at beginning of period

(24,103)

(39,177)

Net debt at end of period

(10,671)

(24,103)



4.    Availability of Report & Accounts

The Report & Accounts will be posted to all shareholders of the company shortly, and will be available to download on the Company's website (www.castlesupportservices.com).


The Report & Accounts will also be available for inspection by the public at the registered office of the company during normal business hours on any weekday. Further copies will be available on request from Castle Support Services plc, Camp Hill, BirminghamB12 0JJ.


The financial information set out above does not constitute statutory accounts as defined in Section 240 of the UK Companies Act 1985. The consolidated balance sheet at 30 June 2008, the consolidated income statement, the consolidated statement of recognised income and expense, and the consolidated cash flow statement and associated notes for the year then ended have been extracted from the group's statutory accounts for the year to 30 June 2008.


The statutory accounts for the period ended 30 June 2007 and the year ended 30 June 2008 received audit reports which were unqualified and did not contain statements under Section 237(2) or Section 237(3) of the Companies Act 1985. The statutory accounts for the period ended 30 June 2007 have been delivered to the Registrar of Companies. The statutory accounts for the period ended 30 June 2008 were approved by the Directors on 10 October 2008, but have not yet been delivered to the Registrar of Companies.


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

a d v e r t i s e m e n t