Castings Regulatory News (CGS)

24 Nov 2005 09:00

Castings PLC24 November 2005 Castings p.l.c.INTERIM FINANCIAL REPORT 2005 Chairman's Statement Profit before tax for the six months ended 30th September 2005 was £5,422,000compared with £3,805,000 in the period to 30th September 2004. We have enjoyed a six month period of increased sales, partly from the recoveryof raw material costs, and also due to increased volumes and additional addedvalue. All three companies have increased sales over the period and with fixed pricedcontracts out of the way, William Lee in particular has returned much improvedprofits for the half year. Raw material prices have marginally reduced from a peak in November 2004 and itis hoped they now reduce further in the next few months to more reasonablelevels. It does appear that China has a reduced demand for steel, which shouldreflect in lower European prices. We are pleased to report that building work has now started for an extension tothe machine shop in Brownhills and should be completed by May 2006. A satisfactory year should materialise despite early signs that demand is easingin certain areas, perhaps due to the effects of high energy prices coupled withhigh raw material prices. An interim dividend of 2.53 pence per share has been declared and will be paidon the 6th January 2006 to shareholders who are on the register at 9th December2005. Brian J Cooke, Chairman Consolidated Income Statement Half year to Half year to Year toUnaudited 30thSeptember 30thSeptember 31stMarch 2005 2004 2005 £'000 £'000 £'000Total revenue 36,379 31,508 69,037 -------- -------- -------- Operating profit 4,877 3,327 8,566 Finance income 545 478 1,066 -------- -------- -------- Profit before income tax 5,422 3,805 9,632 Income tax expense 1,604 1,143 2,840 -------- -------- -------- Profit for the period 3,818 2,662 6,792 -------- -------- -------- Earnings per shareBasic and diluted 8.75p 6.11p 15.57p ------- ------- -------- All operations are continuing Consolidated Balance Sheet Half year to Half year to Year toUnaudited 30thSeptember 30thSeptember 31stMarch 2005 2004 2005 £'000 £'000 £'000 Assets Non-current assestsProperty, plant and equipment 33,419 32,303 33,163Investments 1,027 954 984Deferred tax asset 1,949 1,975 1,949 ------- ------- ------- 36,395 35,232 36,096 -------- -------- -------- Current assetsInventories 4,900 4,953 5,459Trade and other receivables 17,227 13,149 16,781Cash and cash equivalents 25,040 23,777 25,074 -------- -------- -------- 47,167 41,879 47,314 -------- -------- -------- Total assets 83,562 77,111 83,410 -------- -------- -------- Liabilities Current liabilitiesTrade and other payables 11,838 10,371 12,993Current tax liabilities 1,191 596 1,332 -------- -------- -------- 13,029 10,967 14,325 -------- -------- -------- Non-current liabilitiesRetirement BenefitObligations 6,498 6,586 6,498Deferred tax liabilities 2,396 2,125 2,025 -------- -------- -------- 8,894 8,711 8,523 -------- -------- --------Total liabilities 21,923 19,678 22,848 -------- -------- --------Net Assets 61,639 57,433 60,562 -------- -------- -------- Shareholders' equityShare Capital 4,363 4,363 4,363 Share premium account 874 874 874 Other reserves 13 13 13 Retained earnings 56,389 52,183 55,312 -------- -------- --------Total equity 61,639 57,433 60,562 -------- -------- -------- Consolidated Cash Flow Half year to Half year to Year to 30thSeptember 30thSeptember 31stMarchUnaudited 2005 2004 2005 £'000 £'000 £'000 Cash flows from operating activitiesCash generated from operations 6,138 4,929 11,100Interest received 545 478 1,066Tax paid (1,387) (1,058) (2,120) --------- --------- ---------Net cash generated fromoperating activities 5,296 4,349 10,046 Cash flows from investing activitiesPurchase of property, plantand equipment (2,559) (4,176) (7,496)Proceeds from disposal ofproperty, plant and equipment - 750 761Proceeds from disposal of investments - 101 74 ______ ______ ______Net Cash used in investing activities (2,559) (3,325) (6,661) Cash flow from financing activitiesDividends paid to shareholders (2,771) (2,640) (3,704) -------- --------- ---------Net cash used in financing activities (2,771) (2,640) (3,704) Net decrease in cash andcash equivalents (34) (1,616) (319)Cash and cash equivalents atbeginning of period 25,074 25,393 25,393 -------- -------- --------Cash and cash equivalents atend of period 25,040 23,777 25,074 -------- -------- -------- Consolidated Statement of Recognised Income and Expense Half year to Half year to Year to 30thSeptember 30thSeptember 31stMarchUnaudited 2005 2004 2005 £'000 £'000 £'000 Profit for period 3,818 2,662 6,792 Revaluation of investments 43 99 101 Actuarial (losses)/ gains ondefined pension schemes - - 88 Tax on items taken directlyto reserves (13) (29) (56) ------ ------ ------Total recognised income forperiod 3,848 2,732 6,925 ------- ------- ------- Supplementary Statement Reconciliation of operating profit to net cash inflow from operating activities Half year to Half year to Year toUnaudited 30thSeptember 30thSeptember 31stMarch 2005 2004 2005 £'000 £'000 £'000Operating profit 4,877 3,327 8,566 Depreciation 2,303 2,166 4,617 (Increase)/decrease ininventories 559 (434) (932) (Increase)/decrease inreceivables (446) 555 (3,084) Increase/(decrease) inpayables (1,155) (685) 1,933 --------- ------- -------Net cash inflow fromoperating activities 6,138 4,929 11,100 ------- ------- -------- Notes to the interim financial report 1. GENERAL INFORMATION These unaudited results are the first to be reported under InternationalFinancial Reporting Standards. The information for the year ended 31st March 2005 does not constitute statutoryaccounts as defined by section 240 of the Companies Act 1985. A copy of theGroup's UK GAAP statutory accounts for the year has been delivered to theRegistrar of Companies. The auditors' report on those accounts was unqualified. ACCOUNTING POLICIES The interim financial report has been prepared in accordance with anticipatedInternational Financial Reporting Standards (IFRS). The accounting policies andbasis of preparation followed in the interim report where they differ from the2005 Annual Report and Accounts are shown in the Restatement of FinancialInformation under IFRS. The reconciliations of equity at 1st April 2004 (date of transition to IFRS),30th September 2004 and at 31st March 2005 ( date of last UK GAAP financialstatements) and the reconciliation of profit for the period to 30th September2004 and to 31st March 2005 as required by IFRS 1, are shown in the 'Restatementof Financial Information under IFRS' below. The figures for the year ended 31stMarch 2005 and half year ended 30th September 2004 are shown as restated. The financial information presented in this document has been prepared on thebasis of all IFRSs, including International Accounting Standards (IAS) andinterpretations issued by the International Accounting Standards Board (IASB)and its committees, and as interpreted by any regulatory bodies applicable tothe Group published by 30th September 2005. These are subject to ongoingamendment by the IASB and subsequent endorsement by the European Commission andare therefore subject to possible change. Further standards and interpretationsmay also be issued that will be applicable for financial years beginning on orafter 1st April 2005 or that are applicable to later accounting periods but maybe adopted early. The Group's first IFRS financial statements may, therefore, beprepared in accordance with some different accounting policies from thefinancial information presented here. In preparing this financial information,the Group has assumed that the European Commission will endorse the amendment toIAS 19, 'Employee Benefits - Actuarial Gains and Losses, Group Plans andDisclosures', which allows actuarial gains and losses to be recognised in fullthrough equity. 2. DIVIDENDS Half year to Half year To Year to 30th September 30th September 31st March Amounts recognised asdistributions to shareholders in the period: 2005 2004 2005 £'000 £'000 £'000------------------------ --------- -------- --------Final dividend of 6.35pfor the year ended 31stMarch 2005 (2004: 6.05p)per share 2,771 2,640 2,640------------------------ --------- -------- --------Proposed interim dividendof 2.53p for the yearended 31st March 2006(2005: 2.44p) per share 1,104 1,064 1,064------------------------ --------- -------- -------- The proposed interim dividend was approved by the Board on 1st November 2005 butwas not included as a liability as at 30th September 2005, in accordance withIAS 10 'Events after the balance sheet date'. 3. EARNINGS PER SHARE AND DILUTED EARNINGS PER SHARE Earnings per share is calculated by dividing the profit attribute to ordinaryshareholders by the weighted average number of ordinary shares outstandingduring the period. Diluted earnings per share is calculated by dividing theprofit attributable to ordinary shareholders by the weighted average number ofordinary shares outstanding during the period, adjusted for the effects ofdilutive options. Half year to Half year to Year to 30thSeptember 30thSeptember 31stMarch 2005 2004 2005 £'000 £'000 £'000 Profit after tax 3,818 2,662 6,792 ------- ------- ------- Weighted average number ofshares 43,632,068 43,632,068 43,632,068 ---------- ---------- ---------- Earnings per share - basicand diluted 8.75p 6.11p 15.57p ------- ------- -------- Restatement of financial Information under IFRSThe reconciliations of equity at 1st April 2004 (date of transition to IFRS) andat 31st March 2005 (date of last UK GAAP financial statements) and thereconciliation of profit for 2005, as required by IFRS 1, are shown below: Reconciliation of Equity at 1st April 2004 UK GAAP Unaudited effect of transition to IFRS Unaudited IFRS £'000 £'000 £'000Property,plant andequipment 31,043 31,043Investments(c) 704 253 957Deferred taxasset - 1,975 1,975 _____ _____ ______Non-currentassets 31,747 2,228 33,975 ------ ----- ------Inventories 4,527 4,527Trade andotherreceivables 13,697 13,697Cash and cashequivalents 25,393 25,393 ------ ------Current 43,617 43,617assets ------ ------ CurrentliabilitiesTrade andotherpayables (13,697) 2,640 (11,057)(b)Current taxliabilities (1,158) - (1,158)Retirementbenefitobligation - (6,586) (6,586)(a)Deferred (1,374) (76) (1,450)tax ------- ------ -------Totalliabilities (16,229) (4,022) (20,251) -------- ------- ------- Total assetsless Totalliabilities 59,135 (1,794) 57,341 ------ ------- ------- Shareholders'equityShare 4,363 4,363capitalShare premiumaccount 874 874Other 13 13reservesRetainedearnings 53,885 (1,794) 52,091 ------ ------- ------ Total 59,135 (1,794) 57,341equity ------ ------- ------ Reconciliation of Equity at 31st March 2005 UK GAAP Unaudited effect of transition to IFRS Unaudited IFRS £'000 £'000 £'000 Property,plant andequipment 33,163 33,163Investments(c) 630 354 984Deferred taxasset - 1,949 1,949 --- _____ _____ ______Non-currentassets 33,793 2,303 36,096 ------ ----- ------ CurrentassetsInventories 5,459 5,459Trade andotherreceivables 16,781 16,781Cash and cashequivalents 25,074 25,074 ------ ------Current 47,314 47,314assets ------ ------ CurrentliabilitiesTrade andotherpayables (15,764) 2,771 (12,993)(b)Current taxliabilities (1,332) - (1,332)Retirementbenefitobligation - (6,498) (6,498)(a)Deferred (1,919) (106) (2,025)tax ------- ------- ------- Totalliabilities (19,015) (3,833) 22,848 -------- ------- ------ Total assetsless Totalliabilities 62,092 (1,530) 60,562 ------ ------- ------ Shareholders'equityShare 4,363 4,363capitalShare premiumaccount 874 874Other 13 13reservesRetainedearnings 56,842 (1,530) 55,312 ------ ------- ------Total 62,092 (1,530) 60,562equity ------ ------- ------ Reconciliation of profit for.the.period.ended 31st March 2005 Reconciliation for the year ended 31st March 2005 UK GAAP Unaudited effect of transition to IFRS Unaudited IFRS £'000 £'000 £'000 Revenue 69,037 69,037 -------- -------- GroupOperatingProfit 8,566 8,566 Finance 1,066 1,066Income ------- ------- ProfitBefore 9,632 9,632Tax Income Tax (2,840) - (2,840) ------- --- -------Net Profit 6,792 - 6,792 ------- --- ------- 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. At 31st March 2004 the Group's defined benefit pension schemes were indeficit under IAS 19 requiring a pension liability of £6,586,000 to be shown onthe balance sheet. We have chosen to apply the amendment to IAS19 which allowsactuarial gains and losses to be recognised immediately in the Statement ofRecognised Income and Expense i.e. actuarial gains and losses will be takendirectly to reserves. b) Dividends - Under UK company law, companies were required toprovide for their final dividend in the closing balance sheet and in advance ofthe dividend being declared and approved by the Annual General Meeting. UnderIAS 10, 'Events after the balance sheet date', the dividend cannot be providedin the year end balance sheet as, at that date, the dividend did not represent aliability. At 31st March 2005 accrued dividends of £2,771,000 (2004 £2,640,000)were removed from other payables. c) 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 £354,000 at 31st March 2005 (2004 : £253,000) Reconciliation of Equity at 30th September 2004 The reconciliation of equity at 30th September 2004 and the reconciliation ofprofit for the six months ended 30th September 2004 have been included below toenable a comparison of the 2005 published interim figures with those publishedin the corresponding period of the previous financial year. UK GAAP Unaudited effect of transition to IFRS Unaudited IFRS £'000 £'000 £'000 Property,plant andequipment 32,303 32,303Investments(f) 602 352 954Deferred taxasset - 1,975 1,975 _____ ____ _____Non-currentassets 32,905 2,327 35,232 ------ ----- ------ CurrentassetsInventories 4,953 4,953Trade andotherreceivables 13,149 13,149Cash and cashequivalents 23,777 23,777 ------ ------Current 41,879 41,879assets ------ ------ CurrentliabilitiesTrade andotherpayables (11,436) 1,065 (10,371)(e)Current taxliabilities (596) - (596)Retirementbenefitobligation - (6,586) (6,586)(d)Deferred (2,020) (105) (2,125)tax ------ ------- --------- Totalliabilities 14,052 (5,626) (19,678) ------ ------- -------- Total assetsless Totalliabilities 60,732 (3,299) 57,433 ------ ------- -------- Shareholders'equityShare 4,363 4,363capitalShare premiumaccount 874 874Other 13 13reservesRetainedearnings 55,482 (3,299) 52,183 ------ ------- ------ Total 60,732 (3,299) 57,433equity ------ ------- ------ Reconciliation of profit for the period ended 30th September 2004 UK GAAP Unaudited effect of transition to IFRS Unaudited IFRS £'000 £'000 £'000 Revenue 31,508 31,508 -------- --- -------- GroupOperatingProfit 3,327 3,327 Finance Income 478 478 ----- --- ----- Profit BeforeTax 3,805 3,805 Income Tax (1,143) - (1,143) ------- --- ------- Net Profit 2,662 - 2,662 ------- --- ------- Explanation of reconciling items between UK GAAP and IFRS: d) Retirement benefit schemes - Accounting for pensions in accordancewith IAS 19 requires the pension asset/liability to be brought onto the balancesheet. At 30th September 2004 the Group's defined benefit pension schemes werein deficit under IAS 19 requiring a pension liability of £6,586,000 to be shownon the balance sheet.e) Dividends - Under UK company law, companies were required toprovide for their interim dividend in the closing balance sheet and in advanceof the dividend being declared. Under IAS 10, 'Events after the balance sheetdate', the dividend cannot be provided in the half year balance sheet as, atthat date, the dividend did not represent a liability. At 30th September 2004accrued dividends of £1,065,000 were removed from other payables.f) 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 £352,000 at 30th September 2004. This information is provided by RNS The company news service from the London Stock Exchange