RNS Number:8540Q
Castle Support Services PLC
27 March 2008
Issued by Citigate Dewe Rogerson Ltd, Birmingham
Date: Thursday, 27 March 2008
EMBARGOED: 7.00am
Castle Support Services plc
Interim Financial Statements
For the period ended 31 December 2007
CHAIRMAN'S STATEMENT
Introduction
I am pleased to report that during the period under review, being the first full
six month trading period since the acquisition of DM Technical Services Limited
(DMTS), the group has seen an improvement in trading resulting in increases in
both revenue and operating profit. In addition, the pension surplus in the
Castle pension scheme has been successfully unlocked through the transfer of the
assets and liabilities of the DMTS pension scheme into the Castle pension
scheme.
The growing demand for our inspection, repair and maintenance services in the
UK, USA and Australasia within the sectors of energy generation, oil, gas,
petrochemicals and resources as well as across the group's wider customer base,
has been reflected in our results.
In January 2008 we completed a strategic move into the Middle East region
through a 50/50 joint venture with Intersel FZE in Dubai.
Results
We are adopting International Financial Reporting Standards (IFRS) for the
financial year ending 30 June 2008 in accordance with the timeframe for all AIM
quoted companies. The group previously applied United Kingdom Generally Accepted
Accounting Practice (UK GAAP). A document titled "Transition to International
Financial Reporting Standards" which explains the impact of the adoption of IFRS
on the group's results has today been posted on the company's website (
www.castlesupportservices.com) and is available on request from the company's
head office.
The results for the six months to 31 December 2007 show revenue of �55.4m,
EBITDA of �9.3m, operating profit of �8.0m, profit before tax of �9.2m and
profit after tax of �6.3m, resulting in earnings per share of 5.03p. The profit
on disposal of �0.45m during the period resulted from the sale of a surplus
property for �2.4m. Net borrowings reduced by �6.7m during the period to �17.4m
at the period end.
On a pro-forma annualised basis using the four months results to 31 December
2006, revenue for the first six months of the current financial year is up 10
per cent and operating profit, before the loss on pension settlement and profit
on disposal, has increased by 22 per cent.
Pensions
We have made good progress in unlocking the inherent value in the Castle pension
scheme. The assets and liabilities of DMTS's pension scheme were transferred
into the Castle scheme on 20 August 2007, which has enabled the group to report
a combined surplus of �14.4m on an IAS 19 basis in these interim financial
statements.
Strategy
When Castle acquired DM Technical Services on 17 June 2007 we reported on the
company's strategy of growing its business to create value for its shareholders:
both organically, by marketing more proactively existing and new services to its
key target sectors / customers, and by complementary acquisitions. This strategy
envisaged the development of business in the Middle East and the Far East as
well as in each of the three continents where DMTS already had facilities,
namely Europe, Australasia and North America.
The strategic move from a largely reactive business approach, based on
reputation and speed of response to inbound enquiries, to a coordinated
proactive marketing strategy of our considerable capabilities is still at a very
early stage. However, we continue to receive an increasing flow of business
opportunities based upon DMTS's experience and expertise established over many
years serving the key sectors of energy generation, oil, gas, petrochemicals,
resources and shipping. The group is well placed to service growing demand from
all these sectors for the inspection, repair and maintenance of motors,
generators and other rotating equipment, to enable asset owners to safeguard
their capital investment and ensure that production outputs and services are not
disrupted.
The recent joint venture with Intersel of Dubai, which involved the acquisition
of a 50 per cent interest in their company, is the first step in our plans for
overseas expansion. Intersel provides electromechanical services to the oil, gas
and energy generation sectors, predominantly within the Middle East territories,
and provides us with facilities, an experienced workforce and a platform from
which to leverage the group's skills and experience plus benefit from the growth
in the Middle East region.
The board is committed to growth by further geographic expansion and through the
development of complementary services to maximise value for shareholders. With
this in mind, the board has decided to conduct a strategic review to consider
how growth may be accelerated.
This strategic review will consider all alternatives where there is the
potential to extend our range of skills and expertise and expand our geographic
and customer coverage. These will include, but will not be limited to,
alliances, joint ventures or mergers and acquisitions involving existing
maintenance and repair organisations, equipment manufacturers, or project
engineering management organisations. The strategic review is at a very early
stage and the board intends to keep shareholders informed of the outcome in due
course. Shareholders should be aware that the strategic review may or may not
lead to an offer being made for the company and as a consequence, there are
certain Dealing Disclosure Requirements that affect shareholders. These are
explained in note 12.
Share Buyback
At the Annual General Meeting held on 27 November 2007 shareholders approved the
buyback of shares up to a limit of 10 per cent of the company's share capital.
The company made a free share dealing offer to all shareholders with less than
2,000 shares in December 2007. Over 500 shareholders took up the offer, and the
company now holds 56,525 shares in treasury and has 126,001,875 shares remaining
listed on AIM.
Outlook
The group continues to experience encouraging levels of activity and is well
placed to benefit from the increasing demand for maintenance and repair services
for generators, motors and ancillary rotating equipment, particularly in the
resource and energy oriented sectors. We expect to make further progress in the
second half of the financial year and look forward to updating shareholders as
appropriate in due course.
Christopher Mills
Chairman
27 March 2008
Enquiries:
Castle Support Services plc
Christopher Mills, Chairman +44 (0) 207 747 5601
Tudor Davies, Director +44 (0) 121 766 6161
Tim Barrett, Finance Director +44 (0) 121 766 6161
www.castlesupportservices.com
Ticker: CSU.L
Citigate Dewe Rogerson
Fiona Tooley +44 (0) 121 455 8370
Keith Gabriel +44 (0) 7785 703523 (FMT)
Strand Partners Limited
Matthew Chandler +44 (0) 207 409 3494
Independent review report to Castle Support Services plc
Introduction
We have been engaged by the company to review the condensed set of financial
statements in the half-yearly financial report for the six months ended 31
December 2007 which comprises the consolidated interim income statement, the
consolidated interim balance sheet, the consolidated interim cash flow
statement, the consolidated interim statement of recognised income and expense
and the related explanatory notes to the interim financial statements. We have
read the other information contained in the interim report which comprises only
the Chairman's statement and considered whether it contains any apparent
misstatements or material inconsistencies with the financial information.
This report is made solely to the company in accordance with guidance contained
in International Standard on Review Engagements (UK and Ireland) 2410, "Review
of Interim Financial Information Performed by the Independent Auditor of the
Entity". Our review work has been undertaken so that we might state to the
company those matters we are required to state to them in a review report and
for no other purpose. To the fullest extent permitted by law, we do not accept
or assume responsibility to anyone other than the company, for our review work,
for this report, or for the conclusion we have formed.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been approved
by, the directors. The directors are responsible for preparing the half-yearly
financial report in accordance with the Disclosure and Transparency Rules of the
United Kingdom's Financial Services Authority.
As disclosed in note 1, the next annual financial statements of the group will
be prepared in accordance with International Financial Reporting Standards as
adopted by the European Union. This interim report has been prepared in
accordance with International Accounting Standard 34 "Interim Financial
Reporting" and the requirements of IFRS 1 "First-time Adoption of International
Financial Reporting Standards" relevant to interim reports.
The accounting policies are consistent with those that the directors intend to
use in the next annual financial statements. There is, however, a possibility
that the directors may determine that some changes to these policies are
necessary when preparing the full annual financial statements for the first time
in accordance with IFRSs as adopted by the European Union. This is because, as
disclosed in note 1, further standards and interpretations may be issued that
could apply to the group's financial statements.
Our responsibility
Our responsibility is to express to the company a conclusion on the condensed
set of financial statements in the half-yearly financial report based on our
review.
Scope of review
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410, "Review of Interim Financial Information
Performed by the Independent Auditor of the Entity" issued by the Auditing
Practices Board for use in the United Kingdom. A review of interim financial
information consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing (UK and Ireland) and
consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit. Accordingly, we
do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe
that the condensed set of financial statements in the half-yearly financial
report for the six months ended 31 December 2007 is not prepared, in all
material respects, in accordance with International Accounting Standard 34 as
adopted by the European Union and the Disclosure and Transparency Rules of the
United Kingdom's Financial Services Authority.
GRANT THORNTON UK LLP
Registered Auditors
Chartered Accountants
Leicester
27 March 2008
Consolidated Interim Income Statement
For the period ended 31 December 2007
6 months to 4 months to 10 months to
31 Dec 2007 31 Dec 2006 30 June 2007
�'000 �'000 �'000
Notes
Revenue 2 55,403 33,613 87,173
Cost of sales ( 39,299) ( 24,052) ( 62,787)
---------------------------------------------------------------------------------------------
Gross profit 16,104 9,561 24,386
Selling and distribution costs ( 2,193) ( 1,389) ( 3,536)
Administration expenses ( 6,330) ( 4,020) ( 10,243)
---------------------------------------------------------------------------------------------
Operating profit before pension settlement and
profit on disposal 7,581 4,152 10,607
(Loss) / gain on pension settlement - ( 220) 3,488
Profit on disposal of property, plant and
equipment 8 451 5,610 5,610
---------------------------------------------------------------------------------------------
Operating profit 8,032 9,542 19,705
Net interest payable on bank overdrafts and
loans ( 1,098) ( 299) ( 949)
Net interest receivable on bank balances 181 124 739
Interest payable in respect of cumulative
preference shares of subsidiary - ( 900) ( 2,263)
Net gain realised from waiver of interest due
on cumulative preference shares - - 1,213
Interest rate swaps 329 ( 959) ( 2,187)
Other finance income 1,775 539 1,346
----------------------------------------------------------------------------------------------
Profit before tax 9,219 8,047 17,604
Income tax expense 3 ( 2,877) ( 2,348) ( 4,748)
----------------------------------------------------------------------------------------------
Profit for the period 6,342 5,699 12,856
----------------------------------------------------------------------------------------------
Earnings per share (EPS) - basic and
diluted (pence) 4 5.03 4.82 10.85
There are no discontinued operations.
Consolidated Interim Balance Sheet
As at 31 December 2007
31 December 31 December 30 June
2007 2006 2007
Notes �'000 �'000 �'000
Assets
Non-current assets
Goodwill 15,114 15,098 15,110
Other intangible assets 79 102 90
Property, plant and equipment 23,390 23,744 23,430
Deferred tax assets - 4,244 -
Retirement benefit assets 14,369 - 14,650
---------------------------------------------------------------------------------------
Total non-current assets 52,952 43,188 53,280
Current assets
Inventories 9,356 8,229 8,610
Trade and other receivables 22,406 20,504 20,071
Cash and cash equivalents 7,349 17,738 5,387
---------------------------------------------------------------------------------------
Total current assets 39,111 46,471 34,068
Non-current assets held for sale - 1,890 1,862
---------------------------------------------------------------------------------------
Total assets 92,063 91,549 89,210
---------------------------------------------------------------------------------------
Liabilities
Current liabilities
Trade and other payables ( 6,812) ( 5,870) ( 6,049)
Short term provisions and liabilities ( 10,286) ( 12,221) ( 9,485)
Tax liabilities ( 1,902) ( 844) ( 852)
Bank loans and short term borrowings ( 872) ( 391) ( 5,333)
---------------------------------------------------------------------------------------
Total current liabilities ( 19,872) ( 19,326) ( 21,719)
---------------------------------------------------------------------------------------
Non-current liabilities
Long term borrowings ( 23,834) ( 40,778) ( 24,157)
Long term provisions and liabilities ( 2,932) ( 3,027) ( 2,921)
Deferred tax liabilities ( 4,231) - ( 3,973)
Retirement benefit liabilities - ( 14,883) -
----------------------------------------------------------------------------------------
Total non-current liabilities ( 30,997) ( 58,688) ( 31,051)
----------------------------------------------------------------------------------------
Total liabilities ( 50,869) ( 78,014) ( 52,770)
----------------------------------------------------------------------------------------
Net assets 41,194 13,535 36,440
----------------------------------------------------------------------------------------
Total equity
Share capital 7 25,212 5,150 25,212
Reverse acquisition reserve 7 ( 13,057) - ( 13,057)
Foreign currency translation reserve 7 754 12 243
Profit and loss account 7 28,285 8,373 24,042
----------------------------------------------------------------------------------------
Equity shareholders' funds 7 41,194 13,535 36,440
----------------------------------------------------------------------------------------
Consolidated Interim Statement of Recognised Income and Expense
For the period ended 31 December 2007
6 months to 4 months to 10 months to
31 Dec 2007 31 Dec 2006 30 June 2007
�'000 �'000 �'000
Retained profit for the period 6,342 5,699 12,856
Income/(expenses) recognised directly
in equity:
Currency translation differences arising in
the period 511 12 243
Restriction on recognition
of retirement benefit
surplus (2,915) - -
Actuarial gain on
retirement benefit plan - - 12,265
Taxation on actuarial gain
on retirement benefit plan - - (3,434)
Taxation on restriction on
recognition of retirement
benefit surplus 816 - -
Change in deferred tax
rate from 30% to 28% - - (319)
------- ------- --------
Total recognised income
and expense for the period 4,754 5,711 21,611
------- ------- --------
Consolidated Interim Cash Flow Statement
For the period ended 31 December 2007
6 months to 4 months to 10 months to
31 Dec 2007 31 Dec 2006 30 June 2007
�'000 �'000 �'000
Profit before tax 9,219 8,047 17,604
Adjustments for:
Depreciation 1,253 768 1,974
Profit on sale of property,
plant and equipment (451) (5,610) (5,149)
Actuarial gain on pension
settlement - - (5,405)
Interest payable on bank
overdrafts and loans 1,098 299 949
Interest receivable on bank
balances ( 181) ( 124) (739)
Interest payable in respect
of cumulative preference
shares of subsidiary - 900 2,263
Net gain realised from waiver
of interest due on cumulative
preference shares - - (1,213)
Interest rate swaps ( 329) 959 2,187
Other finance income ( 1,775) ( 539) (1,346)
(Increase) in inventories (746) (1,016) (1,396)
(Increase) / decrease in
trade and other receivables (2,335) 1,102 1,243
Increase / (decrease) in
trade and other payables 1,743 (1,305) (1,013)
Increase / (decrease) in long
term provisions and
liabilities 11 (90) (198)
Contributions to pension
schemes and service cost (861) (575) (1,437)
---------------------------------------------------------------------------------
Cash generated from
operations 6,646 2,816 8,324
Interest paid ( 1,095) ( 299) ( 948)
Income taxes paid ( 750) ( 161) ( 934)
---------------------------------------------------------------------------------
Net cash generated from
operating activities 4,801 2,356 6,442
Cash flows from investing
activities
Acquisition of businesses - - ( 1,865)
Net cash and cash equivalents
acquired with businesses - - 1,050
Acquisition of preference
shares in subsidiary - - ( 29,700)
Purchase of property, plant
and equipment ( 1,131) ( 471) ( 1,574)
Sale of property, plant and
equipment 2,373 14,950 14,808
Interest received 181 124 742
--------------------------------------------------------------------------------
Net cash generated from/(used
in) investing activities 1,423 14,603 ( 16,539)
Cash flows from financing
activities
New borrowings - - 25,000
Repayments of amounts
borrowed ( 712) ( 7,800) ( 21,969)
--------------------------------------------------------------------------------
Net cash (used in)/generated
from financing activities ( 712) ( 7,800) 3,031
Increase / (decrease) in cash
and cash equivalents 5,512 9,159 ( 7,066)
Cash and cash equivalents at
beginning of period 1,644 8,567 8,567
Translation differences 192 12 143
-------------------------------------
Cash and cash equivalents at
end of period 7,348 17,738 1,644
-------------------------------------
Notes to the Interim Financial Statements
For the period ended 31 December 2007
1. Basis of preparation
These unaudited interim consolidated financial statements (the interim financial
statements) are for the six months ended 31 December 2007. They are part of the
period covered by the group's first IFRS financial statements for the year
ending 30 June 2008 and therefore they have been prepared in accordance with all
major aspects of IAS 34 "Interim Financial Reporting" and the requirements of
IFRS 1 "First-time Adoption of International Financial Reporting Standards"
relevant to interim reports. They do not include all of the information required
for full annual financial statements, and should be read in conjunction with the
consolidated financial statements of the group for the year ended 30 June 2007.
The comparative numbers have also been prepared on the basis of reverse
acquisition accounting and therefore include the results of DM Technical
Services Limited ("DMTS") for the four months from its year end of 31 August
2006 until 31 December 2006 and for the ten month period ended 30 June 2007,
including DMTS as the acquirer incorporating Castle Support Services plc as if
it was the acquired company from 17 June 2007.
These financial statements have been prepared under the historical cost
convention, except for the revaluation of certain financial instruments.
The interim financial statements have been prepared in accordance with the
accounting policies set out in the Transition to International Financial
Reporting Standards document and are based on the recognition and measurement
principles of all IFRS and International Financial Reporting Interpretations
Committee interpretations ('IFRICs') issued, effective and adopted for use in
the European Union at 30 June 2008 or expected to be adopted and effective at 30
June 2008, our first annual reporting date at which we are required to use the
IFRS accounting standards adopted by the European Union. These IFRS and IFRICs
are subject to ongoing review and possible amendment. Further standards and/or
interpretations may be issued that could apply to the group's financial
statements for the year ending 30 June 2008. If any such amendments, new
standards or interpretations are issued these may lead to the financial
information provided in this report to change.
Castle Support Services plc's consolidated financial statements were prepared in
accordance with United Kingdom Accounting Standards (United Kingdom Generally
Accepted Accounting Practice) until 30 June 2007. The date of transition to IFRS
is 31 August 2006. The comparative figures in respect of 2006 have been restated
to reflect changes in accounting policies as a result of adoption of IFRS. The
disclosures required by IFRS 1 concerning the transition from UK GAAP to IFRS
are given in the reconciliation schedules, presented and explained in a separate
document titled 'Transition to International Financial Reporting Standards'.
This is available for download from our website www.castlesupportservices.com.
The accounting policies have been applied consistently throughout the group for
the purposes of preparation of these condensed consolidated interim financial
statements.
Castle Support Services plc is registered in England with company number
5351402. The registered office is Camp Hill, Birmingham, B12 0JJ.
2. Segmental reporting
Segment information is presented in respect of the group's geographic
settlement. The analysis is for the six months to 31 December 2007, four months
to 31 December 2006 and ten months to 30 June 2007.
Analysis of revenue and results by geographic settlement
Six months to 31 December 2007 Total
Europe Australia USA Elimination Operations
�'000 �'000 �'000 �'000 �'000
Revenue
Revenue to external customers 41,231 8,055 6,117 - 55,403
Inter-segment revenue 37 - - (37) -
-----------------------------------------------------------------------------------------
Total revenue 41,268 8,055 6,117 (37) 55,403
-----------------------------------------------------------------------------------------
Result
Segment result 5,419 926 1,236 - 7,581
Net gain on disposals 451 - - - 451
-----------------------------------------------------------------------------------------
Operating profit 5,870 926 1,236 - 8,032
-----------------------------------------------------------------------------------------
Net finance income 1,187
--------
Profit before tax 9,219
Income tax expense (2,877)
--------
Profit for the six months to 31 December 2007 6,342
--------
Assets and liabilities Unallocated
Total segment assets 68,843 9,142 6,729 7,349 92,063
Total segment liabilities (16,231) (2,459) (1,340) ( 30,839) (50,869)
-----------------------------------------------------------------------------------------
Total net assets 52,612 6,683 5,389 ( 23,490) 41,194
-----------------------------------------------------------------------------------------
Other segment information
Total capital expenditure 818 120 193 - 1,131
Depreciation 904 204 145 - 1,253
Analysis of revenue and results by geographic settlement
Four months to 31 Europe Australia USA Elimination Total
December 2006 Operations
�'000 �'000 �'000 �'000 �'000
Revenue
Revenue to external customers 25,252 4,329 4,032 - 33,613
----------------------------------------------------------------------------------------
Total revenue 25,252 4,329 4,032 - 33,613
----------------------------------------------------------------------------------------
Result
Segment result 2,626 614 912 - 4,152
Net gain on disposals 5,610 - - - 5,610
Loss on pension settlement (220) - - - (220)
----------------------------------------------------------------------------------------
Operating profit 8,016 614 912 - 9,542
----------------------------------------------------------------------------------------
Net finance expense (1,495)
--------
Profit before tax 8,047
Income tax expense (2,348)
--------
Profit for the four months to 31 December 2006 5,699
--------
Assets and liabilities Unallocated
Total segment assets 55,130 7,724 6,447 22,248 91,549
Total segment liabilities (30,963) (1,570) (919) (44,562) (78,014)
----------------------------------------------------------------------------------------
Total net assets 24,167 6,154 5,528 ( 22,314) 13,535
-----------------------------------------------------------------------------------------
Other segment information
Total capital expenditure 260 99 112 - 471
Depreciation 560 115 93 - 768
Analysis of revenue and results by geographic settlement
Ten months to 30 June 2007 Europe Australia USA Elimination Total
Operations
�'000 �'000 �'000 �'000 �'000
Revenue
Revenue to external
customers 65,985 11,506 9,682 - 87,173
Inter-segment revenue 180 - - (180) -
---------------------------------------------------------------------------------------
Total revenue 66,165 11,506 9,682 (180) 87,173
---------------------------------------------------------------------------------------
Result
Segment result 7,237 1,305 2,065 - 10,607
Net gain on disposals 5,610 - - - 5,610
Gain on pension settlement 3,488 - - - 3,488
---------------------------------------------------------------------------------------
Operating profit 16,335 1,305 2,065 - 19,705
---------------------------------------------------------------------------------------
Net finance expense (2,101)
--------
Profit before tax 17,604
Income tax expense (4,748)
--------
Profit for the ten months to 30 June 2007 12,856
--------
Assets and liabilities Unallocated
Total segment assets 68,999 8,191 6,633 5,387 89,210
Total segment liabilities (15,066) (2,070) (1,319) (34,315) (52,770)
---------------------------------------------------------------------------------------
Total net assets 53,933 6,121 5,314 ( 28,928) 36,440
---------------------------------------------------------------------------------------
Other segment information
Total capital expenditure 902 344 328 - 1,574
Depreciation 1,449 294 231 - 1,974
The unallocated assets and liabilities column primarily comprises income tax
liabilities, deferred tax assets and liabilities, and any interest-bearing
assets and liabilities.
Notes to the Interim Financial Statements
For the period ended 31 December 2007
3. Income tax expense
6 months to 4 months to 10 months to
31 Dec 2007 31 Dec 2006 30 June 2007
�'000 �'000 �'000
Current Taxation
UK Corporation Tax at 30% - Current Period 956 490 418
- Prior Period - - 17
Overseas Taxation - Current Period 855 585 1,215
- Prior Period - - 8
------------------------------------
Total Current Tax 1,811 1,075 1,658
------------------------------------
Deferred Tax - Current Period 1,066 1,273 3,055
- Prior Period - - 35
------------------------------------
Total Deferred Tax 1,066 1,273 3,090
------------------------------------
------------------------------------
Income Tax Expense 2,877 2,348 4,748
------------------------------------
4. Earnings per share
Basic earnings per share is calculated by dividing the retained profit
attributable to ordinary equity holders of the company by the weighted average
number of ordinary shares outstanding during the period.
6 months to 4 months to 10 months to
31 Dec 2007 31 Dec 2006 30 June 2007
�'000 �'000 �'000
Profit for the period 6,342 5,699 12,856
---------------------------------------------------
Weighted average number of
ordinary shares in 126,058,400 118,179,750 118,465,774
issue
Basic and diluted earnings
per share (EPS) - pence 5.03 4.82 10.85
There are no dilutive share arrangements in place.
5. Dividends
There were no dividends paid in the period to 31 December 2007 (2006: �0).
6. Contingent liabilities
Bank facilities in the UK are supported by cross-guarantees given by Castle
Support Services plc and its subsidiaries.
The group has entered into trade and other guarantees in the normal course of
business which at 31 December 2007 amounted to �317,000 (30 June 2007:
�495,000).
The bank facilities include a guarantee for �10,000,000 which commenced June
2007. This has been granted to the pension scheme in relation to the future
contributions payable. This guarantee can only be called upon in the event of
default by the group in respect of the schedule of contributions prevailing at
the time. No such default occurred in the period. The guarantee reduces by the
greater of �166,000 or the actual contribution required by the employer under
the schedule of contributions each month. As at 31 December 2007 the guarantee
stood at �8,833,000.
7. Reconciliation of movement in equity
Share Reverse Foreign Profit Total
capital acquisition translation and loss equity
reserve reserve account
�'000 �'000 �'000 �'000 �'000
As at 1 July 2007 25,212 (13,057) 243 24,042 36,440
Profit for the
period - - - 6,342 6,342
Currency translation
differences on
foreign operations - - 511 - 511
Restriction on
recognition on
retirement benefit
surplus - - - (2,915) (2,915)
Taxation on
restriction on
retirement benefit
surplus - - - 816 816
------------------------------------------------------
As at 31 December
2007 25,212 (13,057) 754 28,285 41,194
------------------------------------------------------
Share Reverse Foreign Profit Total
capital acquisition translation and loss equity
reserve reserve account
�'000 �'000 �'000 �'000 �'000
As at 1 September
2006 5,150 - - 2,674 7,824
Profit for the
period - - - 5,699 5,699
Currency translation
differences on
foreign operations - - 12 - 12
------------------------------------------------------
As at 31 December
2006 5,150 - 12 8,373 13,535
------------------------------------------------------
Share Reverse Foreign Profit Total
capital acquisition translation and loss equity
reserve reserve account
�'000 �'000 �'000 �'000 �'000
As at 1 September
2006 5,150 - - 2,674 7,824
Profit for the
period - - - 12,856 12,856
On acquisition of DM
Technical Services
Limited 20,062 (13,057) - - 7,005
Currency translation
differences on
foreign operations - - 243 - 243
Actuarial gain on
defined benefit
pensions - - - 12,265 12,265
Taxation on
actuarial gain on
defined benefit
pensions - - - (3,434) (3,434)
Change on deferred
tax rate of 30% to
28% on defined
benefit - - - (319) (319)
------------------------------------------------------
As at 30 June 2007 25,212 (13,057) 243 24,042 36,440
-------------------------------------------------------
8. Profit on disposal of property, plant and equipment
On 31 August 2007 the group completed the disposal of its vacant freehold
property in Weedon, Northamptonshire.
The gross proceeds from the sale were �2,425,000 resulting in a profit on sale
of property, plant and equipment of �451,000.
During the 10 month period to 30 June 2007 the Dowding & Mills group completed
the sale and leaseback of seven of its UK-based properties. The sale of six of
the properties was concluded in December 2006 and they have been leased back on
a 15-year term without break options. The sale of the seventh property was
concluded in September 2006 and has been leased back on a 12-year term with
break options afforded to the group at years 5, 8 and 10; no break options are
afforded to the lessor. In relation to the seventh property the directors
consider it important to retain sufficient flexibility to enable the group to
unlock the benefits of relocating the facility to a more appropriate site than
is currently occupied. The rental terms attributed to the seven leases are
considered to be at market rates. The net proceeds generated by these
transactions was circa �14,700,000 and a �5,610,000 profit on disposal of
property, plant and equipment was credited to the profit and loss account.
9. Reconciliation of movement in net debt
6 months to 4 months to 10 months to
31 Dec 2007 31 Dec 2006 30 June 2007
�'000 �'000 �'000
Increase /
(decrease) in
cash and cash
equivalents 5,512 9,159 (7,066)
Cash flows from
financing
activities 712 7,800 (3,031)
Translation
differences 192 12 358
Movement in
interest rate
swaps 329 (959) (2,187)
Preference shares
eliminated on
consolidation - - 27,000
--------------------------------------------------
6,745 16,012 15,074
Net debt at
beginning of
period (24,103) (39,177) (39,177)
--------------------------------------------------
Net debt at end
of period (17,358) (23,165) (24,103)
--------------------------------------------------
10. Availability of Interim Report
Copies of these results are being sent to shareholders and will also be
available from the company's registered office at Camp Hill, Birmingham, B12 0JJ
and can be downloaded from our website www.castlesupportservices.com. Castle
Support Services plc is registered in England with company number 5351402. The
registered office is Camp Hill, Birmingham, B12 0JJ.
11. Statutory Accounts
These interim financial statements do not constitute statutory accounts. The
comparative figures for the period ended 30 June 2007 which are now presented
under IFRS are not the statutory accounts for that period. The statutory
accounts for the period ended 30 June 2007 were presented under UK GAAP,
contained an unqualified audit report, did not contain statements under section
237(2) and (3) of the Companies Act 1985, and are filed with the Registrar of
Companies.
12. Dealing Disclosure Requirements
Under the provisions of Rule 8.3 of the Takeover Code (the "Code"), if any
person is, or becomes, "interested" (directly or indirectly) in 1% or more of
any class of "relevant securities" of Castle, all "dealings" in any "relevant
securities" of that company (including by means of an option in respect of, or a
derivative referenced to, any such "relevant securities") must be publicly
disclosed by no later than 3.30pm (London time) on the London business day
following the date of the relevant transaction. This requirement will continue
until the date on which the "offer period" ends. If two or more persons act
together pursuant to an agreement or understanding, whether formal or informal,
to acquire an "interest" in "relevant securities" of Castle, they will be deemed
to be a single person for the purpose of Rule 8.3.
Under the provisions of Rule 8.1 of the Code, all "dealings" in "relevant
securities" of Castle by Castle, or by any of its "associates", must be
disclosed by no later than 12.00 noon (London time) on the London business day
following the date of the relevant transaction.
A disclosure table, giving details of the companies in whose "relevant
securities" "dealings" should be disclosed, and the number of such securities in
issue, can be found on the Takeover Panel's website at
www.thetakeoverpanel.org.uk.
"Interests in securities" arise, in summary, when a person has long economic
exposure, whether conditional or absolute, to changes in the price of
securities. In particular, a person will be treated as having an "interest" by
virtue of the ownership or control of securities, or by virtue of any option in
respect of or derivative referenced to, securities.
Terms in quotation marks are defined in the Code, which can also be found on the
Panel's website. If you are in any doubt as to whether or not you are required
to disclose a "dealing" under Rule 8, you should consult the Panel.
If you are in any doubt as to the application of Rule 8 to you, please contact
an independent financial advisor authorised under the Financial Services and
Markets Act 2000, consult the Panel's website at www.thetakeoverpanel.org.uk or
contact the Panel on telephone number +44 (0)20 7638 0129 or fax +44 (0)20 7236
7013.
In accordance with Rule 2.10 of the Code, Castle confirms that it has in issue
admitted to trading on the London Stock Exchange plc 126,001,875 ordinary shares
of 20 pence each under the International Securities Identification Number
GB00B1XLC667.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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