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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Castings Plc | LSE:CGS | London | Ordinary Share | GB0001795680 | ORD 10P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 7.00 | 1.90% | 376.00 | 370.00 | 382.00 | 380.00 | 380.00 | 380.00 | 67,794 | 16:35:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Malleable Iron Foundries | 200.99M | 13.79M | 0.3161 | 12.02 | 165.8M |
From Apr 2019 to Apr 2024
TIDMCGS
RNS Number : 0904W
Castings PLC
10 November 2017
Castings P.L.C.
INTERIM MANAGEMENT REPORT
Six months ended
30 September 2017
Interim Management Report
Sales for the six months ended 30 September 2017 were GBP61.7 million (2016 - GBP57.9 million) with profit before tax of GBP5.91 million (2016 - GBP7.08 million).
Foundry operations
As previously reported, customer demand during the period remained steady with output of 23,500 tonnes (2016 - 23,600 tonnes) and external sales revenue up 7.9% to GBP58.5 million. The revenue figure includes the impact of rising steel scrap prices during the period which have been passed on to customers. In addition, the continued shift to more machined parts results in higher average selling prices.
The profit from the foundry segment of GBP6.9 million represents an increase of 10.5% from the previous period. This reflects the significant progress made in production and productivity improvements across the two foundry businesses. The result has been negatively impacted by the time lag in passing on raw material price increases and costs associated with the disruption in supply from the machining business.
Investment of GBP3.3 million has been made during the period to support the automation programme that continues to be rolled out.
Machining operation
CNC Speedwell generated external revenue of GBP3.3 million during the period, a decrease of 10.9% compared to the previous period, with a reported loss of GBP1.0 million compared to a profit of GBP0.8 million in the previous period.
The business has experienced significant issues, including production problems, during the period which have impacted both the machining and foundry operations.
Following a detailed review of the operation, additional short-term costs have been identified and included in the result for the period. The main areas impacted are stock obsolescence and the recoverability of tooling costs which, when taken with the director severance cost, have reduced group profits by GBP1.0 million.
The Managing Director of CNC resigned from the board on 2 October 2017. The management structure of the business remains under review, including the appointment of a new Managing Director.
The investment during the period of GBP2.7 million has been made primarily to support demand from core business customers. It is not anticipated that any significant further investment will be made in the short term for work that falls outside of this strategy.
Outlook
Demand from our commercial vehicle customer base remains steady and therefore the full year result for the foundry operations is anticipated to be in line with market expectations.
The changes being made at the machining operation are not expected to have any meaningful impact on profitability during the remainder of the year. However, from the start of 2018/19 we anticipate the machining operation to return to an acceptable level of profitability.
The previously reported replacement work for CNC Speedwell has been reassessed in response to the issues experienced during the period. As a result of this review, the decision has been taken to exit certain non-core projects. Whilst this will most likely delay the revenue growth of the group, the directors believe there are sufficient opportunities available within the core customer base to replace this in the medium term.
Dividend
An interim dividend of 3.38 pence per share has been declared and will be paid on 2 January 2018 to shareholders who are on the register at 24 November 2017.
Principal risks and uncertainties
There are a number of potential risks and uncertainties which could have a material
impact on the group's performance over the remaining six months of the financial year and could cause actual results to differ materially from expected and historical results.
The directors consider that the principal risks and uncertainties remain substantially the same as those stated on pages 7 and 8 of the Annual Report for the year ended 31 March 2017.
The ongoing Brexit negotiations continue to cause uncertainty regarding the near-term outlook and prospects for the UK economy. It is still too early to quantify or determine with certainty the impact on the group. The Board will continue to monitor developments, consider the impact on the group's businesses and take appropriate action to help mitigate any risks associated with the UK leaving
the EU.
Director change
Mark Lewis stepped down from the board on 2 October 2017 and left the business on 20 October 2017.
Cautionary statement
This Interim Management Report ('IMR') has been prepared solely to provide additional information to shareholders to enable them to assess the group's strategies and the potential for those strategies to succeed. The IMR should not be relied on by any other party or for any other purpose. This IMR contains certain forward-looking statements. These are made by the directors in good faith based on the information available to them up to the time of their approval of this report but such statements should be treated with caution due to the inherent uncertainties, including both economic and business risk factors, underlying any such forward-looking information.
The group undertakes no obligation to update any forward-looking statements whether as a result of new information, future events or otherwise.
The IMR has been prepared for the group as a whole and therefore gives greater emphasis to those matters which are significant to Castings P.L.C. and its subsidiary undertakings when viewed as a whole.
By order of the board
BRIAN J. COOKE
Chairman
10 November 2017
Castings P.L.C.
Lichfield Road
Brownhills
West Midlands
WS8 6JZ
Consolidated Statement of Comprehensive Income
For six months ended 30 September 2017
Hot Features
Premium
Unaudited Unaudited
Half year Half year Audited
to to Year to
30 September 30 September 31 March
2017 2016 2017
GBP'000 GBP'000 GBP'000
-------------------------------------------------------------- ------------- ------------- ---------
Revenue 61,728 57,863 118,822
Cost of sales (47,720) (43,567) (88,634)
-------------------------------------------------------------- ------------- ------------- ---------
Gross profit 14,008 14,296 30,188
Distribution costs (1,289) (901) (1,939)
Administrative expenses
-------------------------------------------------------------- ------------- ------------- ---------
Excluding exceptional (6,851) (6,385) (12,701)
Exceptional - - 130
-------------------------------------------------------------- ------------- ------------- ---------
Total administrative expenses (6,851) (6,385) (12,571)
-------------------------------------------------------------- ------------- ------------- ---------
Profit from operations 5,868 7,010 15,678
Finance income 43 67 237
-------------------------------------------------------------- ------------- ------------- ---------
Profit before income tax 5,911 7,077 15,915
Income tax expense (1,121) (1,415) (2,911)
-------------------------------------------------------------- ------------- ------------- ---------
Profit for the period attributable to the equity holders of
the parent company 4,790 5,662 13,004
Other comprehensive income/(expense) for the period:
Items that will not be reclassified to profit and loss:
Movement in unrecognised surplus on defined benefit pension
schemes net of actuarial gains and losses - - 235
-------------------------------------------------------------- ------------- ------------- ---------
- - 235
Items that may be reclassified subsequently to profit and
loss:
Change in fair value of available for sale financial assets (42) 53 54
Tax effect of items that may be reclassified 8 (10) (10)
-------------------------------------------------------------- ------------- ------------- ---------
(34) 43 44
-------------------------------------------------------------- ------------- ------------- ---------
Total other comprehensive (losses)/income for the period (net
of tax) (34) 43 279
-------------------------------------------------------------- ------------- ------------- ---------
Total comprehensive income for the period attributable to
the equity holders of the parent company 4,756 5,705 13,283
-------------------------------------------------------------- ------------- ------------- --------- Earnings per share attributable to the equity holders of the parent company Basic and diluted 10.98p 12.98p 29.80p -------------------------------------------------------------- ------------- ------------- ---------
Consolidated Balance Sheet
30 September 2017
Unaudited Unaudited Audited
30 September 30 September 31 March
2017 2016 2017
' GBP'000 GBP'000 GBP'000
------------------------------------------------------------ ------------- ------------- ---------
ASSETS
Non-current assets
Property, plant and equipment 75,070 71,023 72,762
Financial assets 366 407 408
Other receivables 2,269 3,383 2,269
------------------------------------------------------------ ------------- ------------- ---------
77,705 74,813 75,439
------------------------------------------------------------ ------------- ------------- ---------
Current assets
Inventories 14,574 12,706 14,063
Trade and other receivables 35,685 30,632 33,189
Other current interest-bearing deposits 5,000 10,000 5,000
Cash and cash equivalents 19,514 13,343 22,228
------------------------------------------------------------ ------------- ------------- ---------
74,773 66,681 74,480
------------------------------------------------------------ ------------- ------------- ---------
Total assets 152,478 141,494 149,919
------------------------------------------------------------ ------------- ------------- ---------
LIABILITIES
Current liabilities
Trade and other payables 23,001 17,537 19,866
Current tax liabilities 1,090 1,457 1,855
------------------------------------------------------------ ------------- ------------- ---------
24,091 18,994 21,721
------------------------------------------------------------ ------------- ------------- ---------
Non-current liabilities
Deferred tax liabilities 4,105 4,459 4,054
------------------------------------------------------------ ------------- ------------- ---------
Total liabilities 28,196 23,453 25,775
------------------------------------------------------------ ------------- ------------- ---------
Net assets 124,282 118,041 124,144
------------------------------------------------------------ ------------- ------------- ---------
Equity attributable to equity holders of the parent company
Share capital 4,363 4,363 4,363
Share premium account 874 874 874
Other reserve 13 13 13
Retained earnings 119,032 112,791 118,894
------------------------------------------------------------ ------------- ------------- ---------
Total equity 124,282 118,041 124,144
------------------------------------------------------------ ------------- ------------- ---------
Consolidated Cash Flow Statement
For six months ended 30 September 2017
Unaudited Unaudited
Half year Half year Audited
to to Year to
30 September 30 September 31 March
2017 2016 2017
GBP'000 GBP'000 GBP'000
-------------------------------------------------------- ------------- ------------- ---------
Cash flows from operating activities
Profit before income tax 5,911 7,077 15,915
Adjustments for:
Depreciation 3,677 3,299 7,276
Profit on disposal of property, plant and equipment - - (24)
Finance income (43) (67) (237)
Pension administrative costs - - 235
Increase in inventories (511) (714) (2,071)
(Increase)/decrease in receivables (535) 334 (2,661)
Increase in payables 3,134 768 3,098
-------------------------------------------------------- ------------- ------------- ---------
Cash generated from operating activities 11,633 10,697 21,531
Tax paid (1,826) (1,916) (3,419)
Interest received 30 52 213
-------------------------------------------------------- ------------- ------------- ---------
Net cash generated from operating activities 9,837 8,833 18,325
Cash flows from investing activities
Dividends received from listed investments 13 15 24
Purchase of property, plant and equipment (6,719) (7,374) (14,214)
Proceeds from disposal of property, plant and equipment - - 23
Transfer from other current interest-bearing deposits - - 5,000
Repayments from pension schemes - - 3,761
Advances to pension schemes (1,227) (919) (2,004)
-------------------------------------------------------- ------------- ------------- ---------
Net cash used in investing activities (7,933) (8,278) (7,410)
Cash flow from financing activities
Dividends paid to shareholders (4,618) (17,597) (19,072)
-------------------------------------------------------- ------------- ------------- ---------
Net cash used in financing activities (4,618) (17,597) (19,072)
Net decrease in cash and cash equivalents (2,714) (17,042) (8,157)
Cash and cash equivalents at beginning of period 22,228 30,385 30,385
-------------------------------------------------------- ------------- ------------- ---------
Cash and cash equivalents at end of period 19,514 13,343 22,228
-------------------------------------------------------- ------------- ------------- ---------
Cash and cash equivalents:
Short-term deposits 16,608 11,364 21,362
Cash available on demand 2,906 1,979 866
-------------------------------------------------------- ------------- ------------- ---------
19,514 13,343 22,228
-------------------------------------------------------- ------------- ------------- ---------
Consolidated Statement of Changes in Equity
Equity attributable to equity holders of the
parent
Share Share Retained Total
capital premium Other reserve earnings equity
Unaudited GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------------------------------- -------- -------- ------------- --------- --------
At 1 April 2017 4,363 874 13 118,894 124,144
----------------------------------------------- -------- -------- ------------- --------- --------
Profit for the period - - - 4,790 4,790
Other comprehensive income/(losses):
Change in fair value of available for sale
assets - - - (42) (42)
Tax effect of items taken directly to reserves - - - 8 8
----------------------------------------------- -------- -------- ------------- --------- -------- Total comprehensive income for the period ended 30 September 2017 - - - 4,756 4,756 Dividends - - - (4,618) (4,618) ----------------------------------------------- -------- -------- ------------- --------- -------- At 30 September 2017 4,363 874 13 119,032 124,282 ----------------------------------------------- -------- -------- ------------- --------- -------- Unaudited GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 ----------------------------------------------- ------- ------- ------- -------- -------- At 1 April 2016 4,363 874 13 124,683 129,933 ----------------------------------------------- ------- ------- ------- -------- -------- Profit for the period - - - 5,662 5,662 Other comprehensive income/(losses): Change in fair value of available for sale assets - - - 53 53 Tax effect of items taken directly to reserves - - - (10) (10) ----------------------------------------------- ------- ------- ------- -------- -------- Total comprehensive income for the period ended 30 September 2016 - - - 5,705 5,705 Dividends - - - (17,597) (17,597) ----------------------------------------------- ------- ------- ------- -------- -------- At 30 September 2016 4,363 874 13 112,791 118,041 ----------------------------------------------- ------- ------- ------- -------- -------- Audited GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 ----------------------------------------------- ------- ------- ------- -------- -------- At 1 April 2016 4,363 874 13 124,683 129,933 ----------------------------------------------- ------- ------- ------- -------- -------- Profit for the year - - - 13,004 13,004 Other comprehensive income/(losses): Movement in unrecognised surplus on defined benefit pension schemes net of actuarial loss - - - 235 235 Change in fair value of available for sale assets - - - 54 54 Tax effect of items taken directly to reserves - - - (10) (10) ----------------------------------------------- ------- ------- ------- -------- -------- Total comprehensive income for the year ended 31 March 2017 - - - 13,283 13,283 Dividends - - - (19,072) (19,072) ----------------------------------------------- ------- ------- ------- -------- -------- At 31 March 2017 4,363 874 13 118,894 124,144 ----------------------------------------------- ------- ------- ------- -------- --------
Notes
1. General information
Castings P.L.C. (the 'company') is a company domiciled in England. The condensed consolidated interim financial statements of the company for the six months ended 30 September 2017 comprise the company and its subsidiaries (together referred to as the 'group').
The principal activities of the group are the manufacture of iron castings and machining operations.
The financial information for the year ended 31 March 2017 does not constitute the full statutory accounts for that period. The Annual Report and Financial Statements for the year ended 31 March 2017 have been filed with the Registrar of Companies. The Independent Auditors' Report on the Annual Report and Financial Statements for 2017 was unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under 498 (2) or (3) of the Companies Act 2006.
This report has not been audited and has not been reviewed by independent auditors pursuant to the Auditing Practices Board guidance on Review of Interim Financial Information.
2. Accounting policies
The annual financial statements of Castings P.L.C. are prepared using the recognition and measurement principles of IFRSs as endorsed by the European Union. The condensed set of financial statements has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the European Union.
Basis of preparation
After making enquiries, the directors have a reasonable expectation that the company and the group have adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the half-yearly condensed consolidated interim financial statements.
The same accounting policies, presentation and methods of computation are followed in the condensed consolidated interim financial statements as applied in the group's latest annual audited financial statements.
3. Seasonality of operations
The directors do not consider there to be any significant seasonality or cyclicality to the results of the group.
4. Segment information
For internal decision making purposes, the group is organised into three operating companies which are considered to represent two operating segments of the group. Castings P.L.C. and William Lee Limited are aggregated into Foundry Operations and CNC Speedwell Limited is the Machining Operation.
Inter-segment transactions are entered into under the normal commercial terms and conditions that would be available to third parties.
The following shows the revenues, results and total assets by reportable segment for the half year to 30 September 2017.
Foundry operations Machining Elimination Total
GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------- ------------------ --------- ----------- --------
Revenue from external customers 58,454 3,274 - 61,728
Inter-segmental revenue 8,893 8,600 - 17,493
-------------------------------- ------------------ --------- ----------- --------
Segmental result 6,867 (999) - 5,868
-------------------------------- ------------------ --------- ----------- --------
Unallocated income:
Finance income 43
-------------------------------- ------------------ --------- ----------- --------
Profit before income tax 5,911
-------------------------------- ------------------ --------- ----------- --------
Total assets 130,718 37,497 (15,737) 152,478
-------------------------------- ------------------ --------- ----------- --------
Non-current asset additions 3,258 2,727 - 5,985
-------------------------------- ------------------ --------- ----------- --------
Depreciation 1,751 1,926 - 3,677
-------------------------------- ------------------ --------- ----------- --------
Total liabilities (26,951) (10,560) 9,315 (28,196)
-------------------------------- ------------------ --------- ----------- --------
The following shows the revenues, results and total assets by reportable segment for the half year to 30 September 2016.
Foundry operations Machining Elimination Total
GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------- ------------------ ----------- ------------- ---------
Revenue from external customers 54,187 3,676 - 57,863
Inter-segmental revenue 8,436 8,049 - 16,485
-------------------------------- ------------------ ----------- ------------- ---------
Segmental result 6,212 798 - 7,010
-------------------------------- ------------------ ----------- ------------- ---------
Unallocated income:
Finance income 67
-------------------------------- ------------------ ----------- ------------- ---------
Profit before income tax 7,077
-------------------------------- ------------------ ----------- ------------- ---------
Total assets 120,303 33,596 (12,405) 141,494
-------------------------------- ------------------ ----------- ------------- ---------
Non-current asset additions 4,947 2,427 - 7,374
-------------------------------- ------------------ ----------- ------------- ---------
Depreciation 1,525 1,774 - 3,299
-------------------------------- ------------------ ----------- ------------- ---------
Total liabilities (23,372) (6,047) 5,966 (23,453)
-------------------------------- ------------------ ----------- ------------- ---------
The following shows the revenues, results and total assets by reportable segment for the year ended 31 March 2017.
Foundry operations Machining Elimination Total
GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------------------------- ------------------ --------- ----------- --------
Revenue from external customers 111,838 6,984 - 118,822
Inter-segmental revenue 16,826 16,347 - 33,173
-------------------------------------------------- ------------------ --------- ----------- --------
Segmental result 14,506 1,519 (242) 15,783
-------------------------------------------------- ------------------ --------- ----------- --------
Unallocated income/(costs):
Exceptional credit for recovery of Icelandic bank
deposits previously written off 130
Defined benefit pension costs (235)
Finance income 237
-------------------------------------------------- ------------------ --------- ----------- --------
Profit before income tax 15,915
-------------------------------------------------- ------------------ --------- ----------- --------
Total assets 126,095 33,464 (9,640) 149,919
-------------------------------------------------- ------------------ --------- ----------- --------
Non-current asset additions 7,945 5,145 - 13,090
-------------------------------------------------- ------------------ --------- ----------- --------
Depreciation 3,543 3,733 - 7,276
-------------------------------------------------- ------------------ --------- ----------- --------
Total liabilities (24,620) (5,529) 4,374 (25,775)
-------------------------------------------------- ------------------ --------- ----------- --------
5. Dividends
Amounts recognised as distributions to shareholders in the period:
Half year Half year
to to
30 September 30 September
2017 2016
GBP'000 GBP'000
-------------------------------------------------------------------- ------------- -------------
Final dividend of 10.59p per share for the year ended 31 March 2017
(2016 - 10.33p per share) 4,618 4,507
Supplementary dividend of nil pence per share for the year ended
31 March 2017 (2016 - 30.00p) - 13,090
-------------------------------------------------------------------- ------------- -------------
4,618 17,597
-------------------------------------------------------------------- ------------- -------------
The directors have declared an interim dividend in respect of the financial year ending 31 March 2018 of 3.38p per share (2017 - 3.38p), which will be paid on 2 January 2018.
6. Earnings per share and diluted earnings per share
Earnings per share is calculated by dividing the profit attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period. There are no share options or other potentially issuable shares; hence the diluted earnings per share is the same calculation.
Unaudited Unaudited
Half year Half year Audited
to to Year to
30 September 30 September 31 March
2017 2016 2017
--------------------------------------- ------------- ------------- ----------
Profit after tax (GBP'000) 4,790 5,662 13,004
--------------------------------------- ------------- ------------- ----------
Weighted average number of shares 43,632,068 43,632,068 43,632,068
--------------------------------------- ------------- ------------- ----------
Earnings per share - basic and diluted 10.98p 12.98p 29.80p
--------------------------------------- ------------- ------------- ----------
7. Pension schemes
The group operates two defined benefit pension schemes which are closed to new entrants and closed to future accruals on 6 April 2009. The assets of the schemes are independent of the finances of the group and are administered by trustees.
The pension schemes are related parties of the group and during the period GBP1,227,000 (2016 - GBP919,000) was paid by the group on behalf of the schemes in respect of pension payments and administration costs. At 30 September 2017 of the outstanding balance of GBP6,618,000 (2016 - GBP8,067,000), GBP2,269,000 (2016 - GBP3,383,000) is classified as a non-current other receivable and is repayable in two equal annual instalments commencing on30 November 2018. Payments made by the company on behalf of the schemes in the current period are repayable on 30 November 2018.
8. Interim report
Copies of this interim management report will be available on the company's website, www.castings.plc.uk, and from the registered office.
Statement of Directors' Responsibilities
The directors confirm that the condensed consolidated interim financial statements have been prepared in accordance with IAS 34 as adopted by the European Union and that the interim management report includes a fair review of the information required by DTR 4.2.7R and DTR 4.2.8R.
The directors of Castings P.L.C. are listed on the back cover of this report.
By order of the board
S. J. Mant FCA
Group Finance Director
10 November 2017
This information is provided by RNS
The company news service from the London Stock Exchange
END
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November 10, 2017 02:00 ET (07:00 GMT)
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