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Castle Support Serv (CSU)

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Thursday 27 March, 2008

Castle Support Serv

Interim Results

Castle Support Services PLC
27 March 2008

Issued by Citigate Dewe Rogerson Ltd, Birmingham
Date: Thursday, 27 March 2008

                                                              EMBARGOED: 7.00am

                          Castle Support Services plc
                          Interim Financial Statements
                     For the period ended 31 December 2007


CHAIRMAN'S STATEMENT

Introduction
I am pleased to report that during the period under review, being the first full
six month trading period since the acquisition of DM Technical Services Limited
(DMTS), the group has seen an improvement in trading resulting in increases in
both revenue and operating profit. In addition, the pension surplus in the
Castle pension scheme has been successfully unlocked through the transfer of the
assets and liabilities of the DMTS pension scheme into the Castle pension
scheme.

The growing demand for our inspection, repair and maintenance services in the
UK, USA and Australasia within the sectors of energy generation, oil, gas,
petrochemicals and resources as well as across the group's wider customer base,
has been reflected in our results.

In January 2008 we completed a strategic move into the Middle East region
through a 50/50 joint venture with Intersel FZE in Dubai.

Results
We are adopting International Financial Reporting Standards (IFRS) for the
financial year ending 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 has today been posted on the company's website (
www.castlesupportservices.com) and is available on request from the company's
head office.

The results for the six months to 31 December 2007 show revenue of £55.4m,
EBITDA of £9.3m, operating profit of £8.0m, profit before tax of £9.2m and
profit after tax of £6.3m, resulting in earnings per share of 5.03p. The profit
on disposal of £0.45m during the period resulted from the sale of a surplus
property for £2.4m. Net borrowings reduced by £6.7m during the period to £17.4m
at the period end.

On a pro-forma annualised basis using the four months results to 31 December
2006, revenue for the first six months of the current financial year is up 10
per cent and operating profit, before the loss on pension settlement and profit
on disposal, has increased by 22 per cent.

Pensions
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 the Castle scheme on 20 August 2007, which has enabled the group to report
a combined surplus of £14.4m on an IAS 19 basis in these interim financial
statements.

Strategy
When Castle acquired DM Technical Services on 17 June 2007 we reported on the
company's strategy of growing its business to create value for its shareholders:
both organically, by marketing more proactively existing and new services to its
key target sectors / customers, and by complementary acquisitions. This strategy
envisaged the development of business in the Middle East and the Far East as
well as in each of the three continents where DMTS already had facilities,
namely Europe, Australasia and North America.

The strategic move from a largely reactive business approach, based on
reputation and speed of response to inbound enquiries, to a coordinated
proactive marketing strategy of our considerable capabilities is still at a very
early stage. However, we continue to receive an increasing flow of business
opportunities based upon DMTS's experience and expertise established over many
years serving the key sectors of energy generation, oil, gas, petrochemicals,
resources and shipping. The group is well placed to service growing demand from
all these sectors for the inspection, repair and maintenance of motors,
generators and other rotating equipment, to enable asset owners to safeguard
their capital investment and ensure that production outputs and services are not
disrupted.

The recent joint venture with Intersel of Dubai, which involved the acquisition
of a 50 per cent interest in their company, is the first step in our plans for
overseas expansion. Intersel provides electromechanical services to the oil, gas
and energy generation sectors, predominantly within the Middle East territories,
and 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.

The board is committed to growth by further geographic expansion and through the
development of complementary services to maximise value for shareholders. With
this in mind, the board has decided to conduct a strategic review to consider
how growth may be accelerated.

This strategic review will consider all alternatives where there is the
potential to extend our range of skills and expertise and expand our geographic
and customer coverage. These will include, but will not be limited to,
alliances, joint ventures or mergers and acquisitions involving existing
maintenance and repair organisations, equipment manufacturers, or project
engineering management organisations. The strategic review is at a very early
stage and the board intends to keep shareholders informed of the outcome in due
course. Shareholders should be aware that the strategic review may or may not
lead to an offer being made for the company and as a consequence, there are
certain Dealing Disclosure Requirements that affect shareholders. These are
explained in note 12.

Share Buyback
At the Annual General Meeting held on 27 November 2007 shareholders approved the
buyback of shares up to a limit of 10 per cent of the company's share capital.
The company made a free share dealing offer to all shareholders with less than
2,000 shares in December 2007. Over 500 shareholders took up the offer, and the
company now holds 56,525 shares in treasury and has 126,001,875 shares remaining
listed on AIM.

Outlook
The group continues to experience encouraging levels of activity and is well
placed to benefit from the increasing demand for maintenance and repair services
for generators, motors and ancillary rotating equipment, particularly in the
resource and energy oriented sectors. We expect to make further progress in the
second half of the financial year and look forward to updating shareholders as
appropriate in due course.



Christopher Mills
Chairman
27 March 2008




Enquiries:
Castle Support Services plc
Christopher Mills, 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: CSU.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


Independent review report to Castle Support Services plc

Introduction
We have been engaged by the company to review the condensed set of financial
statements in the half-yearly financial report for the six months ended 31
December 2007 which comprises the consolidated interim income statement, the
consolidated interim balance sheet, the consolidated interim cash flow
statement, the consolidated interim statement of recognised income and expense
and the related explanatory notes to the interim financial statements. We have
read the other information contained in the interim report which comprises only
the Chairman's statement and considered whether it contains any apparent
misstatements or material inconsistencies with the financial information.

This report is made solely to the company in accordance with guidance contained
in International Standard on Review Engagements (UK and Ireland) 2410, 'Review
of Interim Financial Information Performed by the Independent Auditor of the
Entity'. Our review work has been undertaken so that we might state to the
company those matters we are required to state to them in a review report and
for no other purpose. To the fullest extent permitted by law, we do not accept
or assume responsibility to anyone other than the company, for our review work,
for this report, or for the conclusion we have formed.

Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been approved
by, the directors. The directors are responsible for preparing the half-yearly
financial report in accordance with the Disclosure and Transparency Rules of the
United Kingdom's Financial Services Authority.

As disclosed in note 1, the next annual financial statements of the group will
be prepared in accordance with International Financial Reporting Standards as
adopted by the European Union. This interim report has been prepared in
accordance with International Accounting Standard 34 'Interim Financial
Reporting' and the requirements of IFRS 1 'First-time Adoption of International
Financial Reporting Standards' relevant to interim reports.

The accounting policies are consistent with those that the directors intend to
use in the next annual financial statements. There is, however, a possibility
that the directors may determine that some changes to these policies are
necessary when preparing the full annual financial statements for the first time
in accordance with IFRSs as adopted by the European Union. This is because, as
disclosed in note 1, further standards and interpretations may be issued that
could apply to the group's financial statements.

Our responsibility
Our responsibility is to express to the company a conclusion on the condensed
set of financial statements in the half-yearly financial report based on our
review.

Scope of review
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information
Performed by the Independent Auditor of the Entity' issued by the Auditing
Practices Board for use in the United Kingdom. A review of interim financial
information consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing (UK and Ireland) and
consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit. Accordingly, we
do not express an audit opinion.

Conclusion
Based on our review, nothing has come to our attention that causes us to believe
that the condensed set of financial statements in the half-yearly financial
report for the six months ended 31 December 2007 is not prepared, in all
material respects, in accordance with International Accounting Standard 34 as
adopted by the European Union and the Disclosure and Transparency Rules of the
United Kingdom's Financial Services Authority.


GRANT THORNTON UK LLP
Registered Auditors
Chartered Accountants
Leicester
27 March 2008


                     Consolidated Interim Income Statement
                     For the period ended 31 December 2007


                                                  6 months to    4 months to    10 months to
                                                  31 Dec 2007    31 Dec 2006    30 June 2007
                                                        £'000          £'000           £'000
                                           Notes
Revenue                                      2         55,403         33,613          87,173

Cost of sales                                        ( 39,299)      ( 24,052)       ( 62,787)
---------------------------------------------------------------------------------------------
Gross profit                                           16,104          9,561          24,386

Selling and distribution costs                        ( 2,193)       ( 1,389)        ( 3,536)

Administration expenses                               ( 6,330)       ( 4,020)       ( 10,243)
---------------------------------------------------------------------------------------------
Operating profit before pension settlement and
profit on disposal                                      7,581          4,152          10,607

(Loss) / gain on pension settlement                         -          ( 220)          3,488

Profit on disposal of property, plant and
equipment                                    8            451          5,610           5,610
---------------------------------------------------------------------------------------------
Operating profit                                        8,032          9,542          19,705

Net interest payable on bank overdrafts and
loans                                                 ( 1,098)         ( 299)          ( 949)

Net interest receivable on bank balances                  181            124             739

Interest payable in respect of cumulative
preference shares of subsidiary                             -          ( 900)        ( 2,263)

Net gain realised from waiver of interest due
on cumulative preference shares                             -              -           1,213

Interest rate swaps                                        329         ( 959)        ( 2,187)

Other finance income                                     1,775            539          1,346
----------------------------------------------------------------------------------------------
Profit before tax                                        9,219          8,047         17,604

Income tax expense                           3         ( 2,877)       ( 2,348)       ( 4,748)
----------------------------------------------------------------------------------------------
Profit for the period                                    6,342          5,699         12,856
----------------------------------------------------------------------------------------------
Earnings per share (EPS) - basic and
diluted (pence)                              4            5.03           4.82          10.85


There are no discontinued operations.


                       Consolidated Interim Balance Sheet
                             As at 31 December 2007


                                                  31 December   31 December    30 June
                                                         2007          2006       2007
                                        Notes           £'000         £'000      £'000
Assets
Non-current assets
Goodwill                                               15,114        15,098     15,110
Other intangible assets                                    79           102         90
Property, plant and equipment                          23,390        23,744     23,430
Deferred tax assets                                         -         4,244          -
Retirement benefit assets                              14,369             -     14,650
---------------------------------------------------------------------------------------
Total non-current assets                               52,952        43,188     53,280
Current assets
Inventories                                             9,356         8,229      8,610
Trade and other receivables                            22,406        20,504     20,071
Cash and cash equivalents                               7,349        17,738      5,387
---------------------------------------------------------------------------------------
Total current assets                                   39,111        46,471     34,068

Non-current assets held for sale                            -         1,890      1,862
---------------------------------------------------------------------------------------
Total assets                                           92,063        91,549     89,210
---------------------------------------------------------------------------------------
Liabilities
Current liabilities
Trade and other payables                              ( 6,812)      ( 5,870)   ( 6,049)
Short term provisions and liabilities                ( 10,286)     ( 12,221)   ( 9,485)
Tax liabilities                                       ( 1,902)        ( 844)     ( 852)
Bank loans and short term borrowings                    ( 872)        ( 391)   ( 5,333)
---------------------------------------------------------------------------------------
Total current liabilities                            ( 19,872)     ( 19,326)  ( 21,719)
---------------------------------------------------------------------------------------
Non-current liabilities
Long term borrowings                                 ( 23,834)     ( 40,778)  ( 24,157)
Long term provisions and liabilities                  ( 2,932)      ( 3,027)   ( 2,921)
Deferred tax liabilities                              ( 4,231)            -    ( 3,973)
Retirement benefit liabilities                              -      ( 14,883)         -
----------------------------------------------------------------------------------------
Total non-current liabilities                        ( 30,997)     ( 58,688)  ( 31,051)
----------------------------------------------------------------------------------------
Total liabilities                                    ( 50,869)     ( 78,014)  ( 52,770)
----------------------------------------------------------------------------------------
Net assets                                             41,194        13,535     36,440
----------------------------------------------------------------------------------------
Total equity
Share capital                              7           25,212         5,150     25,212
Reverse acquisition reserve                7         ( 13,057)            -   ( 13,057)
Foreign currency translation reserve       7              754            12        243
Profit and loss account                    7           28,285         8,373     24,042
----------------------------------------------------------------------------------------
Equity shareholders' funds                 7           41,194        13,535     36,440
----------------------------------------------------------------------------------------


        Consolidated Interim Statement of Recognised Income and Expense
                     For the period ended 31 December 2007


                                        6 months to   4 months to   10 months to
                                        31 Dec 2007   31 Dec 2006   30 June 2007
                                              £'000         £'000          £'000

Retained profit for the period                6,342         5,699         12,856

Income/(expenses) recognised directly
in equity:

Currency translation differences arising in
the period                                      511            12            243

Restriction on recognition
of retirement benefit
surplus                                      (2,915)            -              -

Actuarial gain on
retirement benefit plan                           -             -         12,265

Taxation on actuarial gain
on retirement benefit plan                        -             -         (3,434)

Taxation on restriction on
recognition of retirement
benefit surplus                                 816             -              -

Change in deferred tax
rate from 30% to 28%                              -             -           (319)
                                             -------       -------      --------
Total recognised income
and expense for the period                    4,754         5,711         21,611
                                             -------       -------      --------


                    Consolidated Interim Cash Flow Statement
                     For the period ended 31 December 2007


                                      6 months to    4 months to    10 months to
                                      31 Dec 2007    31 Dec 2006    30 June 2007
                                            £'000          £'000           £'000

Profit before tax                           9,219          8,047          17,604

Adjustments for:

Depreciation                                1,253            768           1,974

Profit on sale of property,
plant and equipment                          (451)        (5,610)         (5,149)

Actuarial gain on pension
settlement                                      -              -          (5,405)

Interest payable on bank
overdrafts and loans                        1,098            299             949

Interest receivable on bank
balances                                    ( 181)         ( 124)           (739)

Interest payable in respect
of cumulative preference
shares of subsidiary                            -            900           2,263

Net gain realised from waiver
of interest due on cumulative
preference shares                               -              -          (1,213)

Interest rate swaps                         ( 329)           959           2,187

Other finance income                      ( 1,775)         ( 539)         (1,346)

(Increase) in inventories                    (746)        (1,016)         (1,396)

(Increase) / decrease in
trade and other receivables                (2,335)         1,102           1,243

Increase / (decrease) in
trade and other payables                    1,743         (1,305)         (1,013)

Increase / (decrease) in long
term provisions and
liabilities                                    11            (90)           (198)

Contributions to pension
schemes and service cost                     (861)          (575)         (1,437)
---------------------------------------------------------------------------------
Cash generated from
operations                                  6,646          2,816           8,324

Interest paid                             ( 1,095)         ( 299)          ( 948)

Income taxes paid                           ( 750)         ( 161)          ( 934)
---------------------------------------------------------------------------------
Net cash generated from
operating activities                        4,801          2,356           6,442

Cash flows from investing
activities

Acquisition of businesses                       -              -         ( 1,865)

Net cash and cash equivalents
acquired with businesses                        -              -           1,050

Acquisition of preference
shares in subsidiary                            -              -        ( 29,700)

Purchase of property, plant
and equipment                             ( 1,131)         ( 471)        ( 1,574)

Sale of property, plant and
equipment                                   2,373         14,950          14,808

Interest received                             181            124             742
--------------------------------------------------------------------------------
Net cash generated from/(used
in) investing activities                    1,423         14,603        ( 16,539)

Cash flows from financing
activities

New borrowings                                  -              -          25,000

Repayments of amounts
borrowed                                    ( 712)       ( 7,800)       ( 21,969)
--------------------------------------------------------------------------------
Net cash (used in)/generated
from financing activities                   ( 712)       ( 7,800)          3,031

Increase / (decrease) in cash
and cash equivalents                        5,512          9,159         ( 7,066)

Cash and cash equivalents at
beginning of period                         1,644          8,567           8,567

Translation differences                       192             12             143
                                           -------------------------------------
Cash and cash equivalents at
end of period                               7,348         17,738           1,644
                                           -------------------------------------


                   Notes to the Interim Financial Statements
                     For the period ended 31 December 2007


1. Basis of preparation

These unaudited interim consolidated financial statements (the interim financial
statements) are for the six months ended 31 December 2007. They are part of the
period covered by the group's first IFRS financial statements for the year
ending 30 June 2008 and therefore they have been prepared in accordance with all
major aspects of IAS 34 'Interim Financial Reporting' and the requirements of
IFRS 1 'First-time Adoption of International Financial Reporting Standards'
relevant to interim reports. They do not include all of the information required
for full annual financial statements, and should be read in conjunction with the
consolidated financial statements of the group for the year ended 30 June 2007.

The comparative numbers have also been prepared on the basis of reverse
acquisition accounting and therefore include the results of DM Technical
Services Limited ('DMTS') for the four months from its year end of 31 August
2006 until 31 December 2006 and for the ten month period ended 30 June 2007,
including DMTS as the acquirer incorporating Castle Support Services plc as if
it was the acquired company from 17 June 2007.

These financial statements have been prepared under the historical cost
convention, except for the revaluation of certain financial instruments.

The interim financial statements have been prepared in accordance with the
accounting policies set out in the Transition to International Financial
Reporting Standards document and 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 30 June 2008 or expected to be adopted and effective at 30
June 2008, our first annual reporting date at which we are required to use the
IFRS accounting standards adopted by the European Union. These IFRS and IFRICs
are subject to ongoing review and possible amendment. Further standards and/or
interpretations may be issued that could apply to the group's financial
statements for the year ending 30 June 2008. If any such amendments, new
standards or interpretations are issued these may lead to the financial
information provided in this report to change.

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
is 31 August 2006. The comparative figures in respect of 2006 have been restated
to reflect changes in accounting policies as a result of adoption of IFRS. The
disclosures required by IFRS 1 concerning the transition from UK GAAP to IFRS
are given in the reconciliation schedules, presented and explained in a separate
document titled 'Transition to International Financial Reporting Standards'.
This is available for download from our website www.castlesupportservices.com.

The accounting policies have been applied consistently throughout the group for
the purposes of preparation of these condensed consolidated interim financial
statements.

Castle Support Services plc is registered in England with company number
5351402.  The registered office is Camp Hill, Birmingham, B12 0JJ.

2. Segmental reporting

Segment information is presented in respect of the group's geographic
settlement. The analysis is for the six months to 31 December 2007, four months
to 31 December 2006 and ten months to 30 June 2007.

Analysis of revenue and results by geographic settlement

Six months to 31 December 2007                                                     Total
                                Europe    Australia      USA    Elimination   Operations
                                 £'000        £'000    £'000          £'000        £'000
Revenue
Revenue to external customers   41,231        8,055    6,117              -       55,403
Inter-segment revenue               37            -        -            (37)           -
-----------------------------------------------------------------------------------------
Total revenue                   41,268        8,055    6,117            (37)      55,403
-----------------------------------------------------------------------------------------

Result
Segment result                   5,419          926    1,236              -        7,581
Net gain on disposals              451            -        -              -          451
-----------------------------------------------------------------------------------------
Operating profit                 5,870          926    1,236              -        8,032
-----------------------------------------------------------------------------------------

Net finance income                                                                 1,187
                                                                                 --------
Profit before tax                                                                  9,219

Income tax expense                                                                (2,877)
                                                                                 --------
Profit for the six months to 31 December 2007                                      6,342
                                                                                 --------

Assets and liabilities                                          Unallocated
Total segment assets            68,843        9,142     6,729         7,349       92,063
Total segment liabilities      (16,231)      (2,459)   (1,340)     ( 30,839)     (50,869)
-----------------------------------------------------------------------------------------
Total net assets                52,612        6,683     5,389      ( 23,490)      41,194
-----------------------------------------------------------------------------------------

Other segment information
Total capital expenditure          818          120       193             -        1,131
Depreciation                       904          204       145             -        1,253

Analysis of revenue and results by geographic settlement

Four months to 31               Europe    Australia       USA   Elimination        Total
December 2006                                                                 Operations
                                 £'000        £'000     £'000         £'000        £'000
Revenue
Revenue to external customers   25,252        4,329     4,032             -       33,613
----------------------------------------------------------------------------------------
Total revenue                   25,252        4,329     4,032             -       33,613
----------------------------------------------------------------------------------------

Result
Segment result                   2,626          614       912             -        4,152
Net gain on disposals            5,610            -         -             -        5,610
Loss on pension settlement        (220)           -         -             -         (220)
----------------------------------------------------------------------------------------
Operating profit                 8,016          614       912             -        9,542
----------------------------------------------------------------------------------------

Net finance expense                                                               (1,495)
                                                                                --------
Profit before tax                                                                  8,047

Income tax expense                                                                (2,348)
                                                                                --------

Profit for the four months to 31 December 2006                                     5,699
                                                                                --------

Assets and liabilities                                          Unallocated
Total segment assets            55,130        7,724     6,447        22,248       91,549
Total segment liabilities      (30,963)      (1,570)     (919)      (44,562)     (78,014)
----------------------------------------------------------------------------------------
Total net assets                24,167        6,154     5,528      ( 22,314)     13,535
-----------------------------------------------------------------------------------------

Other segment information
Total capital expenditure          260           99       112             -         471
Depreciation                       560          115        93             -         768

Analysis of revenue and results by geographic settlement

Ten months to 30 June 2007      Europe    Australia       USA   Elimination       Total
                                                                             Operations
                                 £'000        £'000     £'000         £'000       £'000
Revenue
Revenue to external
customers                       65,985       11,506     9,682             -      87,173
Inter-segment revenue              180            -         -          (180)          -
---------------------------------------------------------------------------------------
Total revenue                   66,165       11,506     9,682          (180)    87,173
---------------------------------------------------------------------------------------

Result
Segment result                   7,237        1,305     2,065             -     10,607
Net gain on disposals            5,610            -         -             -      5,610
Gain on pension settlement       3,488            -         -             -      3,488
---------------------------------------------------------------------------------------
Operating profit                16,335        1,305     2,065             -     19,705
---------------------------------------------------------------------------------------

Net finance expense                                                             (2,101)
                                                                               --------
Profit before tax                                                               17,604

Income tax expense                                                              (4,748)
                                                                               --------
Profit for the ten months to 30 June 2007                                       12,856
                                                                               --------

Assets and liabilities                                          Unallocated
Total segment assets            68,999        8,191     6,633         5,387     89,210
Total segment liabilities      (15,066)      (2,070)   (1,319)      (34,315)   (52,770)
---------------------------------------------------------------------------------------
Total net assets                53,933        6,121     5,314      ( 28,928)    36,440
---------------------------------------------------------------------------------------

Other segment information
Total capital expenditure          902          344       328             -      1,574
Depreciation                     1,449          294       231             -      1,974

The unallocated assets and liabilities column primarily comprises income tax
liabilities, deferred tax assets and liabilities, and any interest-bearing
assets and liabilities.


                   Notes to the Interim Financial Statements
                     For the period ended 31 December 2007


3. Income tax expense

                                        6 months to   4 months to    10 months to
                                        31 Dec 2007   31 Dec 2006    30 June 2007
                                              £'000         £'000           £'000
Current Taxation
UK Corporation Tax at 30% - Current Period      956           490           418
                          - Prior Period          -             -            17
Overseas Taxation         - Current Period      855           585         1,215
                          - Prior Period          -             -             8
                                            ------------------------------------
Total Current Tax                              1,811         1,075         1,658
                                            ------------------------------------

Deferred Tax              - Current Period     1,066         1,273         3,055
                          - Prior Period           -             -            35
                                            ------------------------------------
Total Deferred Tax                             1,066         1,273         3,090
                                            ------------------------------------
                                            ------------------------------------
Income Tax Expense                             2,877         2,348         4,748
                                            ------------------------------------

4. 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.

                            6 months to         4 months to        10 months to
                            31 Dec 2007         31 Dec 2006        30 June 2007
                                  £'000               £'000               £'000

Profit for the period             6,342               5,699              12,856
                             ---------------------------------------------------

Weighted average number of
ordinary shares in          126,058,400         118,179,750         118,465,774
issue

Basic and diluted earnings
per share (EPS) - pence            5.03                4.82               10.85

There are no dilutive share arrangements in place.

5. Dividends

There were no dividends paid in the period to 31 December 2007 (2006: £0).

6. Contingent liabilities

Bank facilities in the UK are supported by cross-guarantees given by Castle
Support Services plc and its subsidiaries.

The group has entered into trade and other guarantees in the normal course of
business which at 31 December 2007 amounted to £317,000 (30 June 2007:
£495,000).

The bank facilities include a guarantee for £10,000,000 which commenced June
2007. This has been granted to the pension scheme in relation to the future
contributions payable.  This guarantee can only be called upon in the event of
default by the group in respect of the schedule of contributions prevailing at
the time.  No such default occurred in the period. The guarantee reduces by the
greater of £166,000 or the actual contribution required by the employer under
the schedule of contributions each month. As at 31 December 2007 the guarantee
stood at £8,833,000.

7. Reconciliation of movement in equity

                        Share       Reverse       Foreign      Profit     Total
                      capital   acquisition   translation    and loss    equity
                                    reserve       reserve     account
                        £'000         £'000         £'000       £'000     £'000

As at 1 July 2007      25,212       (13,057)          243      24,042    36,440

Profit for the
period                      -             -             -       6,342     6,342

Currency translation
differences on
foreign operations          -             -           511           -       511

Restriction on
recognition on
retirement benefit
surplus                     -             -             -      (2,915)   (2,915)

Taxation on
restriction on
retirement benefit
surplus                     -             -             -         816       816
                         ------------------------------------------------------
As at 31 December
2007                   25,212       (13,057)          754      28,285    41,194
                         ------------------------------------------------------

                        Share       Reverse       Foreign      Profit     Total
                      capital   acquisition   translation    and loss    equity
                                    reserve       reserve     account
                        £'000         £'000         £'000       £'000     £'000

As at 1 September
2006                    5,150             -             -       2,674     7,824

Profit for the
period                      -             -             -       5,699     5,699

Currency translation
differences on
foreign operations          -             -            12           -        12
                         ------------------------------------------------------
As at 31 December
2006                    5,150             -            12       8,373    13,535
                         ------------------------------------------------------

                        Share       Reverse       Foreign      Profit     Total
                      capital   acquisition   translation    and loss    equity
                                    reserve       reserve     account
                        £'000         £'000         £'000       £'000     £'000
As at 1 September
2006                    5,150             -             -       2,674     7,824

Profit for the
period                      -             -             -      12,856    12,856

On acquisition of DM
Technical Services
Limited                20,062       (13,057)            -           -     7,005

Currency translation
differences on
foreign operations          -             -           243           -       243

Actuarial gain on
defined benefit
pensions                    -             -             -       12,265   12,265

Taxation on
actuarial gain on
defined benefit
pensions                    -             -             -       (3,434)  (3,434)

Change on deferred
tax rate of 30% to
28% on defined
benefit                     -             -             -         (319)    (319)
                         ------------------------------------------------------
As at 30 June 2007     25,212       (13,057)          243       24,042   36,440
                         -------------------------------------------------------

8. Profit on disposal of property, plant and equipment

On 31 August 2007 the group completed the disposal of its vacant freehold
property in Weedon, Northamptonshire.

The gross proceeds from the sale were £2,425,000 resulting in a profit on sale
of property, plant and equipment of £451,000.

During the 10 month period to 30 June 2007 the Dowding & Mills group completed
the sale and leaseback of seven of its UK-based properties. The sale of six of
the properties was concluded in December 2006 and they have been leased back on
a 15-year term without break options. The sale of the seventh property was
concluded in September 2006 and has been leased back on a 12-year term with
break options afforded to the group at years 5, 8 and 10; no break options are
afforded to the lessor. In relation to the seventh property the directors
consider it important to retain sufficient flexibility to enable the group to
unlock the benefits of relocating the facility to a more appropriate site than
is currently occupied. The rental terms attributed to the seven leases are
considered to be at market rates. The net proceeds generated by these
transactions was circa £14,700,000 and a £5,610,000 profit on disposal of
property, plant and equipment was credited to the profit and loss account.

9. Reconciliation of movement in net debt

                         6 months to         4 months to          10 months to
                         31 Dec 2007         31 Dec 2006          30 June 2007
                               £'000               £'000                 £'000

Increase /
(decrease) in
cash and cash
equivalents                    5,512               9,159                (7,066)

Cash flows from
financing
activities                       712               7,800                (3,031)

Translation
differences                      192                  12                   358

Movement in
interest rate
swaps                            329                (959)               (2,187)

Preference shares
eliminated on
consolidation                      -                   -                27,000
                              --------------------------------------------------
                               6,745              16,012                15,074
Net debt at
beginning of
period                       (24,103)            (39,177)              (39,177)
                              --------------------------------------------------
Net debt at end
of period                    (17,358)            (23,165)              (24,103)
                              --------------------------------------------------

10. Availability of Interim Report

Copies of these results are being sent to shareholders and will also be
available from the company's registered office at Camp Hill, Birmingham, B12 0JJ
and can be downloaded from our website www.castlesupportservices.com. Castle
Support Services plc is registered in England with company number 5351402.  The
registered office is Camp Hill, Birmingham, B12 0JJ.

11. Statutory Accounts

These interim financial statements do not constitute statutory accounts. The
comparative figures for the period ended 30 June 2007 which are now presented
under IFRS are not the statutory accounts for that period. The statutory
accounts for the period ended 30 June 2007 were presented under UK GAAP,
contained an unqualified audit report, did not contain statements under section
237(2) and (3) of the Companies Act 1985, and are filed with the Registrar of
Companies.


12. Dealing Disclosure Requirements

Under the provisions of Rule 8.3 of the Takeover Code (the 'Code'), if any
person is, or becomes, 'interested' (directly or indirectly) in 1% or more of
any class of 'relevant securities' of Castle, all 'dealings' in any 'relevant
securities' of that company (including by means of an option in respect of, or a
derivative referenced to, any such 'relevant securities') must be publicly
disclosed by no later than 3.30pm (London time) on the London business day
following the date of the relevant transaction. This requirement will continue
until the date on which the 'offer period' ends. If two or more persons act
together pursuant to an agreement or understanding, whether formal or informal,
to acquire an 'interest' in 'relevant securities' of Castle, they will be deemed
to be a single person for the purpose of Rule 8.3.

Under the provisions of Rule 8.1 of the Code, all 'dealings' in 'relevant
securities' of Castle by Castle, or by any of its 'associates', must be
disclosed by no later than 12.00 noon (London time) on the London business day
following the date of the relevant transaction.

A disclosure table, giving details of the companies in whose 'relevant
securities' 'dealings' should be disclosed, and the number of such securities in
issue, can be found on the Takeover Panel's website at
www.thetakeoverpanel.org.uk.

'Interests in securities' arise, in summary, when a person has long economic
exposure, whether conditional or absolute, to changes in the price of
securities. In particular, a person will be treated as having an 'interest' by
virtue of the ownership or control of securities, or by virtue of any option in
respect of or derivative referenced to, securities.

Terms in quotation marks are defined in the Code, which can also be found on the
Panel's website. If you are in any doubt as to whether or not you are required
to disclose a 'dealing' under Rule 8, you should consult the Panel.

If you are in any doubt as to the application of Rule 8 to you, please contact
an independent financial advisor authorised under the Financial Services and
Markets Act 2000, consult the Panel's website at www.thetakeoverpanel.org.uk or
contact the Panel on telephone number +44 (0)20 7638 0129 or fax +44 (0)20 7236
7013.

In accordance with Rule 2.10 of the Code, Castle confirms that it has in issue
admitted to trading on the London Stock Exchange plc 126,001,875 ordinary shares
of 20 pence each under the International Securities Identification Number
GB00B1XLC667.



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