IDE.L Regulatory News (IDE)

Castle Street Investments plc

Half Yearly Report

Castle Street Investments plc (AIM: CSI), today announces its unaudited half-year results for the six months ended 30 June 2015 ("H1 2015").

Period highlights

· Operating profit of £1.5m (H1 2014: loss £4.2m)

· Profit after tax of £1.6m (H1 2014: loss £2.4m)

· Earnings per share of 2.30p (H1 2014: loss 3.31p)

· Strong cash position of £18m at 30 June 2015 (31 Dec 2014: £12.1m) plus deferred consideration of £4.8m receivable in instalments by December 2015.

Post period highlights

· A further £2.7m of deferred consideration has been received since 30 June 2015

· Net cash at the end of December 2015, expected to be in excess of £21.5m, 30.5p per share

· Capital reduction approved on 28 August 2015

· Distributable reserves anticipated to be in excess of £21m by December 2015

Commenting on the results, Bill Dobbie, Chairman Castle Street Investments plc, said:

"We have continued to make strong progress in closing out our liabilities on favourable terms, thereby preserving cash for shareholders. Accordingly, the Directors anticipate that the Company's cash balance at December 2015, net of liabilities, is likely to be in excess of £21.5m. On this basis, estimated net cash balances at the year-end would represent 30.5p per share. With the reduction of capital approved we will have distributable reserves in excess of £21m.

We continue to evaluate acquisition targets in line with our stated investment policy, as an alternative to a cash distribution to shareholders."

For further information please contact:

Further information on the Company can be found at www.castlestreetinvestments.com .

Chairman's Statement

Introduction

Since the completion of the disposal of our Traditional Dating assets in December 2014 we have been focused on ensuring a smooth exit from the dating business and related liabilities and on turning the Company into a well-capitalised cash shell that can be utilised for new opportunities in line with our proposed Investing Policy or to support a return to shareholders. Outgoings are being kept to a minimum and significant progress has been made in closing the various of its liabilities on satisfactory terms, thereby preserving cash for shareholders. The Directors anticipate that the Company's cash balance at December 2015, net of liabilities, is likely to be in excess of £21.5m. On this basis, estimated net cash balances at the year-end would represent 30.5p per share.

We continue to evaluate acquisition targets in line with our stated investment policy, as an alternative to a cash distribution to shareholders. In the absence of identifying one or more suitable investment opportunities, we anticipate bringing a proposal to shareholders for an initial distribution before the end of December 2015.

Financial Review

Following the disposal of the trading assets in December 2014 revenue for the Group was insignificant. A profit before tax of £2m reflected the success in closing out historic liabilities. Provisions of £1.6m established in December in respect of US legal claims and UK property costs were released in the period being no longer required.

Financial income of £0.5m is largely due to the financial discount on the proceeds of sale of the casual dating business which unwinds as the terms of the deferred consideration are fulfilled. £6.7m of deferred consideration has been received in line with the agreed schedule.

Trade and other receivables of £4.7m relate to the remaining deferred consideration.

Provisions fell to £0.4m (December 2014: £3m) with £0.9m of costs absorbed and the balance released.

Events after the balance sheet date

A further £2.7m of deferred consideration has been received on schedule since June 2015. In addition the tax repayment has been received as expected. A number of smaller liabilities have been resolved and residual provisions are now c £0.2m.

The application to cancel the share premium account and the capital redemption reserve was heard by the Court and approved on 28 August 2015. Consequently, as at the end of August the Company had distributable reserves of £21.5m. A Company balance sheet as at 31 August is attached by way of illustration.

Bill Dobbie

Chairman

Castle Street Investments plc

Interim Results FY2015

Consolidated interim statement of comprehensive income

Castle Street Investments plc

Interim Results FY2015

Consolidated interim statement of financial position at 30 June 2015

Castle Street Investments plc

Interim Results FY2015

Consolidated interim statement of changes in equity for the six months ended 30 June 2015

Castle Street Investments plc

Interim Results FY2015

Consolidated interim cash flow statement for the six months ended 30 June 2015

Castle Street Investments plc

Interim Results FY2015

Notes to the Interim Statements

1. Basis of preparation

The interim financial statements set out above contain the interim financial information of Castle Street Investments plc (the "Company") for the six month period ended 30 June 2015. The interim financial statements are prepared by applying the recognition and measurement requirements of IFRSs as adopted by the EU. The Company has elected not to prepare the interim statements in accordance with IAS 34 as adopted by the EU. The interim statements do not include all the information required for full annual financial statements and should be read in conjunction with the financial statements of the company as at and for the year ended 31 December 2014 which were prepared in accordance with IFRS as adopted by the EU.

These interim financial statements were authorised for issue by the Board of Directors on 15 September 2015. A copy of this half-yearly financial report is available on the Company's website at www.castlestreetinvestments.com.

Where shown, the comparative figures for the financial year ended 31 December 2014 are not the Company's statutory accounts for that financial year. Those accounts have been reported on by the Company's auditor and delivered to the Registrar of Companies. The report of the auditor was (i) unqualified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006. 

The interim financial information for the six month period ended 30 June 2015 and the six month period ended 30 June 2014 is unaudited. This statement has not been reviewed by the Company's auditor.

The Group's projections, taking into account all risks and uncertainties indicate that the Group will continue to be self-funding. As a result, the directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. For this reason, they continue to adopt the going concern basis in preparing the financial statements.

2. Earnings per share

The measure of adjusted earnings per share, as calculated above, is a non-statutory measure, which we believe is useful to investors and is commonly used to evaluate the performance of businesses where M&A activity is significant.

Castle Street Investments plc

Parent company balance sheet (unaudited)

At 31 August 2015

These financial statements were approved by the board of directors on 15 September 2015 and were signed on its behalf by:

Niall Stirling

Director

Company registered number: SC368538

Notes to the unaudited interim parent company financial statements

(forming part of the financial statements)

1 Background and basis of preparation

The accounts have been prepared on a going concern basis. In considering the appropriateness of this assumption, the Board have reviewed the Company's projections for the next twelve months and beyond, including cash flow forecasts and regulatory capital surpluses.

As a result of this review the Directors have satisfied themselves that it is appropriate to prepare these financial statements on a going concern basis.

2 Accounting policies

Refer to the parent company financial statements contained within Castle Street Investments plc 2014 Annual Report for the accounting policies applied during the periods.

3 Investments in subsidiaries

The Company has the following investments in subsidiaries:

4 Trade and other receivables

Notes to the unaudited interim parent company financial statements (continued)

5 Provisions

Provisions and other amounts payable relating to discontinued business in 2014

At the balance sheet date the Directors have made provisions and recorded payables which due to their nature are judgemental. While the provisions reflect the Directors' best estimates of the likely outflow of funds there is a risk that additional amounts may be payable in a worst case scenario.

 6 Trade and other payables

Notes to the unaudited interim parent company financial statements (continued)

7 Capital and reserves

Share capital

The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company.

The Board's policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Board monitors the return on capital and the level of dividends to ordinary shareholders.

Share premium account £000

At a general meeting on 23 December 2014 shareholders passed a special resolution approving a reduction of capital and the cancellation of the share premium account and capital redemption reserve. This was confirmed by an Order in the Court of Sessions, Scotland on 27 August 2015, and registered with Companies House on 28 August 2015.

Reserves

Castle Street Investments plc has two reserves other than share capital, namely retained earnings and merger reserve (where the difference between the consideration paid and the capital of the acquiree on any common control transaction is reflected).