Industrial engineer Castings reported record revenues and profits in the year to March driven by a 13 per cent increase in castings delivered to 57,200 tonnes, two-thirds of which were exported. The dividend has increased sharply, too, and strong cash generation means that the company's cash pile is worth 40p a share alone.
Castings benefited from the opening of a new warehouse in January, costing £5.5m but with the option of extending the facility for extra machining capacity. It also gives the business plenty of room for growth without the additional expense as there is currently around 20 per cent spare capacity. At CNC Speedwell, the machining business, revenue rose by 13 per cent, and several contracts secured to machine and assemble products for the car industry are expected to come into production this month and in July.
Reported profits include £690,000 from the administrators in relation to losses on deposits made with Icelandic banks; a £1m windfall following settlement of an historic creditor; and a £300,000 credit relating to the company pension scheme. Strip these out and adjusted pre-tax profits rose from £14.7m to £21.1m, giving underlying EPS of 35.6p. Following 18 per cent upgrades post results, broker Arden Partners expects a similar level of profits and EPS this year.
| CASTINGS (CGS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 304p | MARKET VALUE: | £133m | |
| TOUCH: | 300-308p | 12-MONTH HIGH: | 360p | LOW: 250p |
| DIVIDEND YIELD: | 3.9% | PE RATIO: | 7 | |
| NET ASSET VALUE: | 212p | NET CASH: | £17.8m | |
| Year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 97 | 16.7 | 27.5 | 10.00 |
| 2009 | 85 | 3.6 | 1.4 | 10.00 |
| 2010 | 61 | 9.8 | 17.5 | 10.00 |
| 2011 | 105 | 15.5 | 26.7 | 10.75 |
| 2012 | 126 | 23.1 | 40.3 | 11.75 |
| % change | +20 | +49 | +51 | +9 |
Ex-div: 18 Jul Payment: 17 Aug | ||||
