With a slump in revenues in the year, it's cost-cutting, one-off pension fund adjustments and lower exceptional charges - Castings was hit with a hefty provision against losses on deposits with Icelandic banks last year - that largely explains the much improved profitability.
The West Midlands-based foundry group generates roughly 80 per cent of its sales from commercial vehicle and car manufacturers - one of the industries to suffer most in the recession. Indeed, product dispatched to customers declined by 12,100 tonnes in the period to 31,800 tonnes during the year.
But slow demand recovery up to January this year has since accelerated, giving management hope that the worst is over. Currently running at 80 per cent of capacity, the group's new - but previously mothballed - foundry at William Lee is now operating for three days a week. Moreover, the group still boasts a hefty cash balance - even though this fell £1.1m in the year. But the current low interest rate environment did mean that finance income fell from £1.68m last year to just £139,000.
Arden Partners expects pre-tax profits of £7.5m for 2011, giving EPS of 12.2p.
CASTINGS (CGS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 200p | MARKET VALUE: | £87m | |
| TOUCH: | 185-200p | 12-MONTH HIGH: | 215p | 147p |
| DIVIDEND YIELD: | 5% | PE RATIO: | 11 | |
| NET ASSET VALUE: | 168p | NET CASH: | £14.7m | |
| Year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2006 | 76.7 | 12.70 | 20.10 | 9.20 |
| 2007 | 86.2 | 13.10 | 21.60 | 9.52 |
| 2008 | 97.3 | 16.70 | 27.50 | 10.0 |
| 2009 | 84.8 | 3.62 | 1.43 | 10.0 |
| 2010 | 60.6 | 9.80 | 17.50 | 10.0 |
| % change | -29 | +171 | +1,124 | - |
Ex-div: 21 Jul Payment: 20 Aug | ||||
