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25 Jun 2008 09:00
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 RoadBrownhillsWest MidlandsWS8 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
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100,644
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89,872
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|
|
|
|
|
|
Liabilities
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|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
Trade and other payables
|
18,589
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|
16,212
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|
Current tax liabilities
|
1,816
|
|
883
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|
|
20,405
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|
17,095
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|
|
|
|
|
|
Non-current liabilities
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|
|
|
|
Retirement benefit obligations
|
-
|
|
-
|
|
Deferred tax liabilities
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2,382
|
|
2,141
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|
|
2,382
|
|
2,141
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|
Total liabilities
|
22,787
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|
19,236
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|
|
|
|
|
|
Net Assets
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77,857
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|
70,636
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|
|
|
|
|
|
Equity attributable to equity holders of the parent company
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|
|
|
|
Share capital
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4,363
|
|
4,363
|
|
|
|
|
|
|
Share premium account
|
874
|
|
874
|
|
|
|
|
|
|
Other reserves
|
13
|
|
13
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|
|
|
|
|
|
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)
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|
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
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|
|
|
|
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.
DividendsThe 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.
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.
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.
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