Castings Regulatory News (CGS)

19 May 2006 09:03

Castings PLC19 May 2006 Castings plcFINANCIAL REPORT 2006 Chairman's Statement Profit before tax for the year ended 31st March 2006 was £12,701,000 comparedwith £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 yearand it has enabled us to maintain stable employment throughout. Raw material prices, although at a high level, have settled down after theChinese/Indian effect on all steel and associated products. We are now moving into uncertainty because of two factors. Firstly we have afurther deficit with our final salary pension schemes which at the lastactuarial valuation amounted to £6.5m. We paid £2.1m in the year and the balancewill be paid during the current financial year. Secondly and more seriously isfuture electricity prices. We expect electricity prices to rise considerably when we renew our existing twoyear 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 alreadycommenced with our customers to recover this imposed expense. The full effect ofsuch increases is unknown at the present time, which is a very unsatisfactoryposition in which to find ourselves. It also appears that UK electricity pricesare well in excess of European prices which once again places UK manufacturingat a considerable disadvantage not only to the Far East, but also Europe. BRIAN J. COOKE Chairman 19 May 2006 Castings plcLichfield RoadBrownhillsWest MidlandsWS8 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 shareBasic 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 £'000Assets Non-current assetsProperty, plant and equipment 32,566 33,163Financial assets 1,139 984Deferred tax asset 574 1,877 ----------- ---------- 34,279 36,024 ----------- ---------- Current assetsInventories 5,276 5,459Trade and other receivables 20,449 16,781Cash and cash equivalents 27,686 25,074 ----------- ---------- 53,411 47,314 ----------- ---------- Total assets 87,690 83,338 ----------- ---------- Liabilities Current liabilitiesTrade and other payables 15,063 12,993Current tax liabilities 1,808 1,332 ----------- ---------- 16,871 14,325 ----------- ---------- Non-current liabilitiesRetirement Benefit Obligations 1,913 6,257Deferred tax liabilities 1,781 2,025 ----------- ---------- 3,694 8,282 ----------- ----------Total liabilities 20,565 22,607 ----------- ---------- Net Assets 67,125 60,731 ----------- ---------- Shareholders' equityShare 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 £'000Cash flows from operating activitiesCash generated from operations 12,678 11,100Interest received 1,140 1,066Tax paid (3,060) (2,120) ----------- ---------- Net cash generated from operating activities 10,758 10,046 Cash flows from investing activitiesPurchase of property, plant and equipment (4,301) (7,496)Proceeds from disposal of property, plant andequipment 9 761Proceeds from disposal of investments 21 74 ----------- ----------Net cash used in investing activities (4,271) (6,661) Cash flow from financing activitiesDividends 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 salefinancial assets 176 101 Actuarial (losses)/gains on defined pension schemes 1,987 88 Tax effect of gains and losses recognised directlyin 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 incomestatement 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 beenprepared under International Financial Reporting Standards (IFRS) adopted by theEU. The comparatives for 2005 have accordingly been restated from UK GenerallyAccepted Accounting Practice (GAAP). The accounting polices of the Group under IFRS, including the exemptions takenunder IFRS 1 "First-time Adoption of International Financial ReportingStandards", together with the restated IFRS financial statements for 2005, whichinclude reconciliations of UK GAAP to IFRS, are set out in detail in the interimstatement published on 24th November 2005 and will be included in the full 2006annual 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 alreadybeen 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 theproposed final dividend is approved by the members,the dividend will be paid on18th August 2006 to shareholders registered on 21st July 2006. 2. The basic and diluted earnings per share are based on the weightedaverage number of shares in issue of 43,632,068 in 2006 and in 2005. 3. The financial information set out above does not constitute thecompany's statutory accounts within the meaning of section 240 of the CompaniesAct 1985. The 2006 figures are based on unaudited accounts for the year ended31st March 2006. The auditors do not expect to issue a qualified report on thestatutory accounts which will be finalised on the basis of the financialinformation presented by the directors in the preliminary announcement and whichwill be delivered to the Registrar of Companies following the company's annualgeneral meeting. Statutory accounts for 2005, which were based on UK GAAP, have been delivered tothe Registrar of Companies. The auditors at that time reported on thoseaccounts; their report was unqualified and did not contain statements under theCompanies 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 32,566Investments (b) 609 530 1,139Deferred tax asset - 574 574 -------- ---------- --------Non-current assets 33,175 1,104 34,279 -------- ---------- -------- Current assetsInventories 5,276 5,276Trade and other receivables 20,449 20,449Cash and cash equivalents 27,686 27,686 -------- -------- Current assets 53,411 53,411 -------- -------- Current liabilitiesTrade 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 Totalliabilities 68,080 (955) 67,125 -------- ---------- -------- Shareholders' equityShare capital 4,363 4,363Share premium account 874 874Other reserves 13 13Retained 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 accordancewith IAS 19 requires the pension asset/liability to be brought onto the balancesheet. We have chosen to apply the amendment to IAS19 which allows actuarialgains and losses to be recognised immediately in the Statement of RecognisedIncome and Expense i.e. actuarial gains and losses will be taken directly toreserves. b) Investments - Under UK company law, companies accounted forinvestments at cost and showed the market value by way of a note. Under IAS thefair value (based on market prices) is shown on the balance sheet requiring anuplift 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