Annual Report for the year ended 31 March 2024
Stock Code: CGS
Castings P.L.C.
Annual Report for the year ended 31 March 2024
Castings P.L.C.
Castings P.L.C. is a market leading iron
casting and machining group based in the
UK supplying both the domestic and export
markets.
Our continued strength is largely as a result
of our investment in the latest technologies
and manufacturing processes. Maintaining an
ungeared balance sheet provides investment
flexibility, enabling us to fully capitalise on
commercial opportunities to generate strong
returns for the benefit of shareholders,
customers and employees alike.
An Introduction
to Castings P.L.C.
01
Castings P.L.C.
Annual Report for the year ended 31 March 2024
Contents
Strategic Report
Financial Highlights
02
Chairman’s Statement
03
Group Overview and Strategy
04
Business Model
05
Business and Financial Review
06
Principal Risks and Uncertainties
08
Environmental, Social and Governance
12
Viability Statement
18
S172(1) Statement
19
Corporate Governance
Board of Directors
20
Directors’ Report
21
Corporate Governance
24
Audit and Risk Committee Report
26
Directors’ Remuneration Report
Annual Statement
27
Remuneration Policy
28
Annual Report on Directors’ Remuneration
30
Statement of Directors’ Responsibilities
33
Independent Auditor’s Report
34
Financial Statements
Consolidated Statement of Comprehensive Income
39
Consolidated Balance Sheet
40
Consolidated Cash Flow Statement
41
Consolidated Statement of Changes in Equity
42
Notes to the Consolidated Financial Statements
43
Five Year Financial History
60
Parent Company Balance Sheet
61
Parent Company Statement of Changes in Equity
62
Notes to the Parent Company Financial Statements
63
Company Information
Notice of Meeting
69
Directors, Officers and Advisers
72
Shareholder Information
73
02
Castings P.L.C.
Annual Report for the year ended 31 March 2024
Castings P.L.C.
Financial Highlights
Revenue Profile
Geographical revenue split
Customer sector profile
United Kingdom 15%
Export 85%
Commercial vehicle 80%
Automotive 6%
Other 14%
Group revenue
(£m)
£224m
(2023: £201m)
Foundry sales volume
(tonnes)
50,450
(2023: 53,100)
2023
2024
2022
2021
149
201
115
224
2023
2024
2022
2021
49,800
53,100
40,100
50,450
Profit before tax
(£m)
£21.3m
(2023: £16.7m)
EPS
(basic)
38.45p
(2023: 31.66p)
2023
2024
2022
2021
12.1
16.7
5.0
21.3
2023
2024
2022
2021
19.60
31.66
9.51
38.45
Cash generated from operating
activities (£m)
£21.6m
(2023: £22.4m)
Capital expenditure
(£m)
£10.5m
(2023: £6.2m)
2023
2024
2022
2021
12.9
22.4
13.0
21.6
2023
2024
2022
2021
4.4
6.2
5.2
10.5
Dividend per share (excluding
supplementary dividend) (pence)
18.32p
(2023: 17.35p)
2023
2024
2022
2021
16.23
17.35
15.26
18.32
03
Castings P.L.C.
Annual Report for the year ended 31 March 2024
Strategic Report
Chairman’s Statement
The turnover of the group
increased to £224 million (£201
million last year) with a rise in
profit before tax to £21.3 million
compared to £16.7 million last
year.
Overview
Turnover increased by 12% compared
with the previous year and operating profit
increased by 21%. The despatch weight fell
by 5% compared to the prior year which was
at the highest level since 2014.
Demand from our customers was very
strong during the year, particularly during
the first half. Our heavy truck customers
(approximately 80% of revenue) increased
their build rates to satisfy an unprecedented
level of demand, which was caused in part
by the backlogs associated with the Covid
period and the subsequent supply constraint
issues that were well documented. In order
to satisfy the elevated schedules, the group
outsourced the production of some castings
for a period of time to supplement our own
internal production.
As we entered the second half of the year
it became apparent that the OEMs had
satisfied the backlog demand and we started
to see schedules at a lower level. This was
especially evident in the final quarter of the
financial year and these reduced levels have
continued into the new financial year. We are
currently operating at a level approximately
20% below the highest point in 2023/24.
We have seen a year of relatively stable input
prices following very significant increases
in raw materials and energy in the previous
financial year. The most significant increase
related to electricity following the end of
our fixed price contract on 30 September
2022. This additional cost of power has
continued to be surcharged to our customers
thus not adversely affecting group profit. It
does however impact reported margins and
comparisons with the prior year as the first
six months of 2022/23 included the lower
electricity prices in the fixed price contract.
Foundry businesses
Demand was particularly high in the first six
months and then reduced during Q3 and
again in Q4. The reduction in the second half
of the year negatively impacted production
efficiencies in these businesses. The most
significant impact on the margin percentage
has been the pass-through of cost rises for
a full year, particularly in respect of electricity
which affects the foundries to a much greater
extent than the machining business.
In November 2023, the board approved
the installation of an additional foundry
production line at our William Lee site.
Whilst we are still in the early stages of the
project, it is expected that the new line
will be commissioned, on time and in line
with budget, in June 2025 and at a cost of
approximately £17 million; it will add up to
12,000 tonnes of additional gross foundry
capacity which represents a 15% increase on
the group’s current capacity. The additional
facility will enable us to take advantage of
new and growing market areas such as wind
energy, agriculture and further opportunities
in the US as well as satisfying additional
demand from our existing customer base.
CNC Speedwell
It is pleasing to report a very good
performance in the machining business
following the strong finish to the previous
financial year. This demonstrates the impact
of high volumes in the period and also reflects
the benefits of the engineering productivity
and prices of new parts introduced last year.
Investment has been focussed on
replacement capacity and sustainability
initiatives such as solar panels and the
second phase of the more energy efficient
cooling plant. The solar panels are expected
to generate up to a maximum of 10% of the
monthly power demand for the machining
business and this is an area that we are
seeking to expand in other businesses within
the group.
Outlook
Our heavy truck customers are suggesting
that the current lower levels of demand are
likely to continue in the short-term with the
potential for a slight increase in the autumn.
We will continue to develop opportunities
with existing customers in areas such as
the electrification of lighter trucks and build
relationships in other markets such as wind
energy, agriculture and in the US.
Dividend
The directors are recommending the
payment of a final dividend of 14.19 pence
per share to be paid on 23 August 2024 to
shareholders on the register on 19 July 2024.
This, together with the interim dividend, gives
a total dividend for the year of 18.32 pence
per share which, in line with our progressive
dividend policy, represents an increase of
5.6% on the prior year.
Supplementary dividend
In addition to the final dividend set out above,
the board has reviewed the cash position
of the group and considered the balance
between increasing returns to shareholders
whilst retaining flexibility for capital and other
investment opportunities. As a result, the
directors are declaring a supplementary
dividend of 7.00 pence per share to be paid
on 24 July 2024 to shareholders on the
register on 21 June 2024. This dividend,
being discretionary and non-recurring, does
not compromise our commitment to invest in
market leading technologies to maintain our
competitive advantage.
Directors
As previously announced, after nearly sixty
three years with the company, of which
forty have been as chairman, Brian Cooke
retired from the board on 15 August 2023. I
reiterate my thanks to him for his outstanding
contribution to the group.
I also wish to thank the directors, senior
management and all of our employees for
their hard work and commitment during the
year.
A. N. Jones
Chairman
12 June 2024
04
Castings P.L.C.
Annual Report for the year ended 31 March 2024
Castings P.L.C.
Group Overview and Strategy
Group overview
Castings P.L.C. is a market leading iron casting and machining group based in the UK, supplying both the domestic and export markets.
The original foundry operation dates back to 1835 and today the group comprises of three trading businesses, employing approximately 1,200
people in the UK.
The group operates two iron foundries – Castings P.L.C. (Brownhills, West Midlands) and William Lee Limited (Dronfield, Derbyshire) – together
with the CNC Speedwell Limited machining operation which is also based in Brownhills.
The group produces Ductile iron, SG iron, Austempered ductile iron (ADI), SiMo and Ni-resist castings up to 45kg in weight. Our three Disamatic
moulding machines and three horizontal green sand moulding machines provide a foundry production capacity of 70,000 tonnes per annum
(equates to sales capacity of approximately 63,000 tonnes per annum after machining weight removed).
Our machining operation is invested to support the capacity requirements of the foundry customer base.
Strategy
Our continued strength is largely as a result of our investment in the latest technologies and manufacturing processes. Utilising high volume
equipment in a medium batch environment, we are perfectly positioned to supply our commercial vehicle focussed customer base in Europe
and beyond.
The management team is committed to developing the business for the benefit of shareholders, employees and customers.
Our focus is to deliver long-term sustainable revenues and higher than average margins through the following strategic priorities:
Reinvestment for
innovation and
efficiency
We invest in the latest technologies to provide our customers with innovative design
and production offerings and to ensure we maximise production process efficiencies.
We seek to strike a balance in the allocation of strong cash flows between reinvestment
and providing attractive returns for shareholders.
Increase OEM
market share
By continuing to work collaboratively with customers to develop innovative, cost-
effective solutions, we strive to increase our market share within our existing core
commercial vehicle customer base.
With our investment in warehousing and logistics systems, we are well placed to take
advantage of opportunities to bring additional products to our current OEM customers.
Strength of
balance sheet
The group balance sheet is managed to ensure long-term financial stability and the
ability to make efficient investment decisions to support our strategic objectives.
Investment in
our people
With approximately 1,200 employees in the UK, our workforce is a critical element
to the continued success of the group. We are committed to developing our people
through targeted and balanced training across all levels, whilst maintaining an eye on
the future with apprenticeship programmes in all companies in the group.
05
Castings P.L.C.
Annual Report for the year ended 31 March 2024
Strategic Report
Business Model
Design collaboration
Work closely with customers to
develop cost-effective solutions to
meet their needs.
Use of 3D design simulation and
rapid prototyping.
Our people
Committed, experienced workforce
with a high degree of technical
knowledge.
Foundry production
High-volume moulding equipment
used in a flexible manner (zero time
changeovers) to allow production of
small or large volume batches.
Ability to produce a diverse range of
parts.
Technical expertise, investment in
flexible automation and efficient
working practices ensure cost of
production is kept low, whilst quality
of output is very high.
Machining capability
Highly invested machine shop
focussed on the prismatic machining
of castings primarily for the group
customer base.
Robotic feeding of machines being
rolled out to aid efficiencies and
quality standards.
Vertical integration of assembly
processes available.
Delivery to customer
Investment in logistics systems
ensures a diverse product range is
managed effectively meeting strict
customer delivery deadlines.
Experience in managing logistics
both domestically and for the export
market.
INVESTMENT
INVESTMENT
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VALUE FOR STAKEHOLDERS
Customers
Flexible, agile and
cost-effective
supply of high-
quality and diverse
product range.
Long-term security
of supply.
Employees
Training and
investment
allowing our
employees to
develop in a
challenging
and ambitious
environment.
Shareholders
Maintaining
competitive
position affords
us growth
opportunities to
increase returns to
our shareholders.
Strong cash
generation and
a progressive
dividend policy.
Communities
and
environment
We aim to
contribute
positively to the
communities and
environment in
which we operate.
A recycler of
steel scrap metal
produced in
the UK.
06
Castings P.L.C.
Annual Report for the year ended 31 March 2024
Castings P.L.C.
Business and Financial Review
General overview
The underlying demand from our commercial
vehicle customers, which make up nearly
80% of group revenue, was very strong,
particularly in the first half of the year.
Following the COVID-19 period and the
well-publicised supply constraint issues, the
OEMs experienced unprecedented demand
for heavy trucks.
During the second half of the year, the
backlog demand had been absorbed by the
OEMs with many reporting a normalisation
of heavy truck demand. The impact of this
reduction was seen in the final quarter of
the year and forward schedules continue to
reflect this lower level.
Input prices have remained relatively stable
during the year. The most significant increase
in the last two years related to electricity
following the end of a fixed price contract on
30 September 2022.
The additional cost for power purchased
during the prior year was approximately
£15 million reflecting elevated prices for
the second half of that year. This year has
a full year of elevated cost resulting in a
further increase of approximately £13 million
compared to the prior year. The total impact
in the year when compared to the previous
fixed contract rate is in the region of £28
million.
These electricity increases have continued to
be surcharged to our customers and result in
an increased revenue in the year. This has not
adversely affected group profit as it is a pass-
through of a direct cost increase.
Overview of business
segment performance
The segmental revenue and results for the
current and previous years are set out in
note 2 on pages 46 and 47. An overview
of the performance, position and future
prospects of each segment, and the relevant
KPIs, are set out in the next column.
Key Performance Indicators
The key performance indicators considered
by the group are:
• Segmental revenue
• Segmental profit
• EPS
• Net cash
• Dividends per share
Foundry operations
As set out previously, customer demand
was strong in the first half of the year, with
schedules reducing in he second half,
particularly so in the final quarter of the year.
The foundry businesses experienced a
decrease in output of 5.0% to 50,450
tonnes and a rise in external sales revenue of
£23.6 million (11.8%) to £222.5 million.
After taking into account the reduction in
weight from machining, this equates to
approximately 56,200 tonnes of production.
Of the total output weight for the year, 63.3%
related to machined castings compared
to 59.2% in the previous year. The change
reflects the trend of an increasing proportion
of more complex, machined parts.
The segmental profit of £16.2 million was
broadly flat compared to the previous year,
which represents a profit margin of 6.4% on
total segmental sales (2023 – 7.3%).
The pass-through of elevated input costs
continues to be the most significant impact
on the margin percentage. This has been
increased further by the full-year impact of the
electricity surcharge compared to six months
in the prior year. In addition, the significant
and sharp fall in the demand schedules in the
final quarter of the year negatively impacted
the margin in the year.
Investment of £5.2 million has been made in
the foundry businesses during the year. The
most significant element of this was £1.5
million of initial payments for the production
line at our William Lee site. This represents
the first foundry capacity increase for the
group for over 15 years and the £17 million
project remains on budget and on target for
commissioning in June 2025.
Other investment during the year included a
replacement programme on production and
processing equipment, along with AI in areas
such as metal melting and quality assurance.
Machining
The machining business generated total
sales of £37.6 million in the year compared to
£27.7 million in the previous year. Of the total
revenue, 5.0% was generated from external
customers compared to 7.3% in 2023.
The segmental result for the year was a profit
of £3.7 million (2023 – £0.2 million).
With the higher demand in the year and
increasing volumes on newly introduced
parts, the machining business has continued
to build on the strong final quarter of last year.
As demand from the foundry customers
reduced in the second half of the year, the
machining business continued at a higher
level for longer as the group looked to
replenish finished inventory levels that had
been depleted since the start of the year.
We have invested £5.3 million during
the year, which included £1.8 million on
sustainability initiatives relating to a second
more power efficient cooling plant and solar
panels and £3.2 million has been invested
in replacement, more efficient, machining
capacity.
Business review and
performance
Revenue
Group revenues increased by 11.7% to
£224.4 million compared to £201.0 million
reported in 2023, of which 85% was exported
(2023 – 83%).
The revenue from the foundry operations to
external customers increased by 11.8% to
£222.5 million (2023 – £199.0 million) with
the dispatch weight of castings to third-
party customers decreasing by 5.0% to
50,450 tonnes (2023 – 53,100 tonnes).
Revenue from the machining operation to
external customers decreased by 7.2%
during the year to £1.9 million (2023 –
£2.0 million).
Operating profit and segmental result
The group operating profit for the year was
£19.8 million compared to £16.4 million
reported in 2023, which represents a return
on sales of 8.8% (2023 – 8.1%).
07
Castings P.L.C.
Annual Report for the year ended 31 March 2024
Strategic Report
Finance income
The level of finance income increased to
£1.53 million compared to £0.34 million in
2023, reflecting the higher interest rates
available on deposits during the financial year.
Profit before tax
Profit before tax has increased to
£21.3 million from £16.7 million in the prior
year.
Taxation
The tax charge of £4.57 million (2023 – £2.92
million) is made up of a current tax charge
of £4.25 million (2023 – £2.41 million) and a
deferred tax charge of £0.31 million (2023 –
£0.51 million).
The effective rate of tax of 21.4% (2023
– 17.5%) is lower than the main rate of
corporation tax of 25% (2023 - 19%). The
primary reason for this is a credit to the
deferred tax estimate relating to the prior year
of £0.70 million.
Earnings per share
Basic earnings per share increased 21.4% to
38.45 pence (2023 – 31.66 pence), reflecting
the 27.4% increase in profit before tax which
was partially offset by a higher effective tax rate
compared to the previous year.
Options over 37,620 shares were granted
during the year (2023 – options over 42,468
shares), as set out in note 17. The company
purchased 100,000 shares during the year
(2023 – 47,900). As a result, the weighted
average number of shares has decreased to
43,488,441 resulting in a diluted earnings per
share of 38.32 pence per share (2023 – 31.58
pence per share).
Dividends
The directors are recommending a final
dividend of 14.19 pence per share (2023 –
13.51 pence per share) to be paid on
23 August 2024 to shareholders on the
register on 19 July 2024. This would give a
total ordinary distribution for the year of 18.32
pence per share (2023 – 17.35 pence per
share).
In addition, a supplementary dividend of 7.00
pence per share has been declared which will
be payable on 24 July 2024 to shareholders
on the register on 21 June 2024.
Cash flow
The group generated cash from operating
activities of £21.6 million compared to £22.4
million in 2023. When compared to 2023,
the variance is mainly due to the significant
increase in operating profit of £3.4 million
offset by a higher working capital outflow of
£4.4 million when compared to the outflow
in 2023.
In the year to 31 March 2024, the most
significant increase to working capital relates
to an increase in inventory levels of
£7.0 million compared to the start of the year.
The weight of finished stock is now back to
an appropriate level having been depleted in
the prior year. The decrease in receivables
and payables reflects the slowing of demand
at the end of the year.
Corporation tax payments, net of
overpayments from prior years, during the
year totalled £2.6 million compared to £2.9
million in 2023.
Capital expenditure during the year amounted
to £9.6 million (2023 – £6.2 million), as set out
previously, and the charge for depreciation
was £8.9 million (2023 – £8.6 million).
Financial assets relating to listed investments
were disposed of during the year for £0.4
million.
The company pays pensions on behalf
of the two final salary pension schemes
and then reclaims these advances from
the schemes (as set out in note 5). During
the year repayments of £2.1 million (2023
– £2.1 million) were received from the
schemes and advances were paid on behalf
of the schemes of £2.1 million (2023 – £2.1
million). These advances will be repaid to the
company during the current financial year.
Dividends paid to shareholders were
£14.2 million in the year (2023 – £13.7 million)
which includes £6.5 million in relation to a
supplementary dividend in respect of the year
ended 31 March 2023.
The company purchased 100,000 (2023 –
47,900) shares to be held in treasury at a total
cost of £0.40 million (2023 – £0.15 million).
The net cash and cash equivalents movement
for the year was a decrease of £3.0 million
(2023 – decrease of £0.18 million).
At 31 March 2024, the total cash and
deposits position was £32.5 million
(2023 – £35.6 million).
Pensions
The pension valuation showed an increase in
the surplus, on an IAS 19 (Revised) basis, to
£10.9 million compared to £10.4 million in the
previous year.
The majority of the liabilities of the schemes
are covered by an insurance asset that fully
matches, subject to final adjustment of the
bulk annuity pricing, the remaining pension
liabilities of the schemes. However, there
remains the uninsured element relating to
the GMP equalisation liability. This liability
has decreased during the year as a result of
the change in valuation assumptions (further
detail is set out in note 5).
The pension surplus continues not to be
shown on the balance sheet due to the
IAS 19 (Revised) restriction of recognition of
assets where the company does not have
an unconditional right to receive returns of
contributions or refunds.
Balance sheet
Net assets at 31 March 2024 were
£134.0 million (2023 – £131.7million). Other
than the total comprehensive income for the
year of £16.8 million (2023 – £13.9 million),
the only movements relate to the dividend
payment of £14.2 million (2023 – £13.7
million), shares purchased in the year for
£0.40 million (2023 – £0.15 million) and
share-based payment charge of £0.1 million
(2023 – £0.1 million).
Non-current assets have increased to
£61.8 million (2023 – £60.7 million) as a
result of investment in property, plant and
equipment during the year being at a level
greater than the depreciation charge.
Current assets have decreased to
£112.3 million (2023 – £113.7 million) with the
inventory increase being offset by a reduction
in receivables and cash levels.
Total liabilities have decreased to £40.1 million
(2023 – £42.8 million), largely as a result of a
decrease in trade payables.
08
Castings P.L.C.
Annual Report for the year ended 31 March 2024
Castings P.L.C.
Principal Risks and Uncertainties
In common with all trading businesses, the
group is exposed to a variety of risks in the
conduct of its normal business operations.
The directors regularly assess the principal
risks facing the entity. Whilst it is difficult
to completely quantify every material risk
that the group faces, below is a summary
of those risks that the directors believe are
most significant to the group’s business
and could have a material impact on future
performance, causing it to differ materially
from expected or historic achieved results.
Information is also provided as to how the
risks are, where possible, being managed or
mitigated.
The group does not operate a formal internal
audit function; however, risk management is
overseen by senior management and group
risk registers are maintained and regularly
reviewed, alongside factors which may
result in changes to risk assessments or
require additional mitigation measures to be
implemented.
External consultants are used to assess
design and effectiveness of controls relating
to IT security to provide specialist support to
management in this area.
Key risks arising or increasing in impact are
reviewed at both group and subsidiary board
meetings.
The impact of each risk set out below has
been described as increased, stable or
decreased dependent upon whether the
business environment and group activity has
resulted in a change to the potential impact
of that risk.
Risk description
Impact
Mitigation and control
Markets and competition
The group’s revenues are dominated by the
commercial vehicle sector which is a cyclical
market exposed to macroeconomic trends.
Ongoing global conflicts, high levels of
inflation and elevated interest rates have all
been prevalent during the year, impacting
both the underlying demand for heavy goods
vehicles and the affordability of vehicles to
fleet operators.
High level of competition could lead to
deflation in prices. Global sourcing models
could also result in resourcing of work to low
cost economies.
Stable
The operational and commercial activity of
the business is driven by customer demand.
Demand has the potential to change rapidly
dependent upon the significant variable
factors in the macroeconomic environment
such as inflation, interest rate changes or
changing regulatory positions.
Erosion of market share could result in loss of
revenue and profit.
The group’s operations are set up in
such a way as to ensure that variation in
demand can be accommodated and rapidly
responded to.
Demand is closely reviewed by senior
management on a constant basis.
Whilst there can be no guarantee that
business will not be lost on price, we are
confident that we can remain competitive.
The group continues to mitigate this risk
through investment in productivity, with a
strong focus on cost and customer value.
Customer concentration and relationships
The group has relationships with key
customers in the commercial vehicle market
which form the majority of the customer base.
Stable
The loss of, or deterioration in, any major
customer relationship could have a material
impact on the group’s results.
We build strong relationships with our
customers to develop products to meet their
specific needs.
Technological change
Sustainability and climate change mean
that customers continue to invest in the
development of synthetic fuels, electric and
hydrogen powered vehicles to reduce the
emissions produced by the heavy-duty truck
sector.
The initial phase of this is focussed on
passenger cars and smaller, short-range
trucks which are not key markets for the
group. However, the continued development
of new technology does present a medium-
term risk to the group as c. 30% of group
revenue arises from the supply of cast iron
powertrain components.
It is important to note that such a change
also presents an opportunity for the group
to evolve its product offering, as has always
been the case over the years.
Stable
The group continues to work with key
customers producing the next generation of
internal combustion engine (‘ICE’) commercial
vehicles, whilst monitoring opportunities for
the future.
The strategic focus of the group is a matter
addressed through group board meetings.
Consideration is given to what opportunities
might be available within alternative light-
weight metals such as aluminium, value
added opportunities and also investigating
the potential within hydrogen fuel cells
(considered to be the most likely replacement
technology for heavy-duty trucks).
Customers continue to invest in Green
Iron solutions, the conditions for which the
group already satisfies, and demonstrate
a commitment to transition to a Green Iron
supply chain by 2030.
Electricity contracts have been fully
REGO backed since October 2022 and
from October 2023 our gas is purchased
alongside contractual carbon offsets. This
provides a platform to support customers
Green Iron aspirations.
09
Castings P.L.C.
Annual Report for the year ended 31 March 2024
Strategic Report
Risk description
Impact
Mitigation and control
Product quality and liability
The group’s businesses expose it to certain
product liability risks which, in the event of
failure, could give rise to material financial
liabilities.
Stable
Fines or penalties could result in a loss of
revenue, additional costs and reduced profits.
Whilst it is a policy of the group to endeavour
to limit its financial liability by contract in
all long-term agreements (‘LTAs’), it is not
always possible to secure such limitations.
The group’s customers do require the
maintenance of demanding quality systems
to safeguard against quality-related risks and
the group maintains appropriate external
quality accreditations. The group maintains
insurance for public liability-related claims but
does not insure against the risk of product
warranty or recall.
Foreign exchange
The group is exposed to foreign exchange
risk on both sales and purchases
denominated in currencies other than sterling,
being primarily the euro and US dollar.
Stable
The group is exposed to gains or losses that
could be material to the group’s financial
results and can increase or decrease how
competitive the group’s pricing is to overseas
markets.
The group’s foreign exchange risk is well-
mitigated through commercial arrangements
with key customers.
Foreign exchange rate risk is sometimes
partially mitigated by using forward foreign
exchange contracts. Such contracts are
short term in nature, matched to contractual
cash flows and non-speculative.
Equipment
The group operates a number of specialist
pieces of equipment, including foundry
furnaces, moulding lines and CNC milling
machines which, due to manufacturing lead
times, would be difficult to replace sufficiently
quickly to prevent major interruption and
possible loss of business in the event of
unforeseen failure.
Stable
A large incident could disrupt business at
the site affected and result in significant
rectification costs or material asset
impairments.
Whilst this risk cannot be entirely mitigated
without the uneconomic duplication of all
key equipment, the plant is maintained to a
high standard and inventories of strategic
equipment spares are maintained.
The foundry facilities at Brownhills and
Dronfield have similar equipment and work
can be transferred from one location to
another very quickly.
Additional flexibility and resilience will
be provided through investments in a
new foundry based in Dronfield and
the introduction of a gradual machine
replacement programme at CNC Speedwell.
Suppliers
The group holds long-standing relationships
with key suppliers and there is a risk that
a business which the group is critically
dependent upon could be subject to
significant disruption and that this could
materially impact the operations of the group.
There are specifically high risks of supply
disruption as a result of current geopolitical
instability.
Stable
The risk of a supplier’s business interruption
remains very high due to the current global
business environment.
Although the group takes care to ensure
alternative sources of supply remain available
for materials or services on which the group’s
businesses are critically dependent, this is
not always possible to guarantee without risk
of short-term business disruption, additional
costs and potential damage to relationships
with key customers.
The group continues to maintain productive
dialogue with key suppliers, working together
to adjust to changes to the business
environment.
10
Castings P.L.C.
Annual Report for the year ended 31 March 2024
Castings P.L.C.
Risk description
Impact
Mitigation and control
Commodity and energy pricing
The group is exposed to the risk of price
inflation on raw materials and energy
contracts.
The principal metal raw materials used by
the group’s businesses are steel scrap and
various alloys. The most important alloy
raw material inputs are premium graphite,
magnesium ferro-silicon, copper, nickel and
molybdenum.
The availability, and therefore price, of
steel scrap has the potential to be a risk
to the group as a result of steel producers
transitioning from blast furnaces to electric
arc furnaces.
Decreased
Changes to the pricing of the group’s
commodity and energy purchases could
materially impact the financial performance of
the group if no mitigating actions were taken.
Power and raw material markets have been
volatile because of the current conflict in
Ukraine. The impact upon pricing has reduced
during the year and whilst tensions remain in
the Middle East, prices have become more
stable than we have seen for the past two
years.
Wherever possible, prices and quantities
(except steel) are secured through long-
term agreements with suppliers. In general,
the risk of price inflation of these materials
resides with the group’s customers through
price adjustment clauses.
Historically, energy contracts have been
locked in for at least 12 months. With the
volatile power market, following the end of
our fixed price contract on 30 September
2022, the group entered into a flexible
power agreement and as markets stabilise
we continue to review the most appropriate
arrangement moving forwards.
Information technology and systems reliability
The group is dependent on its information
technology (‘IT’) systems to operate its
business efficiently, without failure or
interruption.
The group continues to invest in IT systems
to aid in the operational performance of the
group and its reporting capabilities.
There are increasing global threats faced by
these systems as a result of sophisticated
cyberattacks.
Stable
Significant failures to the IT systems of the
group as a result of external factors could
result in operational disruption and a negative
impact on customer delivery and reporting
capabilities.
Whilst data within key systems is regularly
backed up and systems subject to virus
protection, any failure of backup systems
or other major IT interruption could have a
disruptive effect on the group’s business.
IT projects are reviewed and approved at
board level and the group continues to invest
in IT security to improve our resilience and
response towards such threats.
The group engages with external specialists
to regularly assess the security of the IT
network and systems.
Regulatory and legislative compliance
The group must comply with a wide range
of legislative and regulatory requirements
including modern slavery, anti-bribery
and anti-competition legislation, taxation
legislation, employment law and import and
export controls.
Stable
Failure to comply with legislation could lead
to substantial financial penalties, business
disruption, diversion of management time,
personal and corporate liability and loss of
reputation.
The group maintains a comprehensive
range of policies, procedures and training
programmes in order to ensure that both
management and relevant employees are
informed of legislative changes and it is clear
how the group’s business is expected to be
carried out.
Whistleblowing procedures and an open-
door management style are in place to
enable concerns to be raised and addressed.
Specialist advice is made available to
management when required to ensure that
the group is up to date with changes in
regulation and legislation.
Principal Risks and Uncertainties
continued
11
Castings P.L.C.
Annual Report for the year ended 31 March 2024
Strategic Report
Risk description
Impact
Mitigation and control
Climate change
The group’s operations are energy intensive
by their nature and therefore result in
greenhouse gas emissions being produced,
which either require reducing or offsetting.
Whilst the group considers that its businesses
provide fundamental components and
services which will prove resilient in a
transition towards a net zero economy, it
also recognises policy targets have been set
which may result in changes to the wider
economy and societal attitudes towards
industry.
A fall in investor demand in the industrial
sector could negatively impact share values;
it is important to ensure that the groups
sustainability strategy is communicated
appropriately to ensure that stakeholders
are aware of the group’s progressive net
zero position for scope 1 and 2 emissions,
alongside the fact that the group is already
well invested with plant which can support
our customers’ green iron aspirations (such
as electric induction furnaces).
The risk of business disruption due to
extreme weather events may also increase if
policy targets are not met.
Stable
It is expected that green taxes on energy and
the compliance cost of meeting developing
reporting obligations for our stakeholders
will result in increased energy prices and
administrative expenses.
Opportunities may present themselves as a
result of the group’s early adoption of green
iron principles and strong sustainability
credentials.
The group continues to develop its ESG
strategy, reporting and practices and has
appointed a Head of Sustainability to support
this.
The ESG working group continues to monitor
ESG strategy, risks, opportunities and
developments.
The group is evolving its ESG reporting to
communicate the positive story we have
to tell, including our early adherence to
Green Iron standard which is based on the
fundamentals of electric furnaces, renewable
energy and the use of scrap steel.
The group is now powered by 100%
renewable power and carbon offset gas,
with a number of on-site renewables projects
either under way or under application.
The group operates in locations where the
physical risks of climate change are relatively
low but will continue to engage with and
understand the needs of its stakeholders in
this area.
Insurance policies are maintained in relation
to the group’s property, plant and equipment.
People risk
The group’s operations depend upon the
availability of both skilled and unskilled labour
to operate manual equipment and fulfil our
strategic goals.
The inability to attract and retain talent
could result in either a shortage of staff or a
reduction in operating margins.
Stable
The labour market has been extremely
competitive during the year.
The group looks to provide safe, stable and
long-term employment at competitive rates
of pay.
We invest in people development and utilise
technology and productivity gains to ensure
that our products remain competitively
priced.
12
Castings P.L.C.
Annual Report for the year ended 31 March 2024
Castings P.L.C.
Environmental, Social and Governance
Our strategy
Our approach to ESG and sustainability activities continues to focus on providing safe, long-term employment for the local economy whilst
generating sustainable value for stakeholders (set out on page 5) in a manner which is consistent with our governance obligations.
The group presents this ESG Report for the year to 31 March 2024 taking note of relevant industrial data points suggested in the London Stock
Exchange guidance on ESG reporting. These metrics are used both in the context of wider ESG reporting and to support our Task Force on
Climate-related Financial Disclosures (‘TCFD’) metric reporting.
At a glance
Completed initiatives
On-going initiatives
• Solar photovoltaic installed at CNC Speedwell.
• 100% REGO-backed electricity powering the groups plant.
• 100% carbon offset gas from 1 October 2023.
• Energy efficient plant upgrades, including compressors and
chillers.
• Appointment of Head of Sustainability and publication of first
Sustainability Report.
• Investment in energy efficient cooling plant in collaboration with
the BEIS Industrial Energy Transformation Fund.
• Technical appraisal of sand reclamation equipment to enable
foundry sand to be re-used.
• Reviewing investment in further onsite renewable capacity.
• Development of approach to measuring scope 3 emissions.
Environmental
As an energy-intensive industry, we understand that we must evolve in order to meet the needs of our stakeholders. The group continues to
improve its environmental credentials in a commercially viable manner, with numerous success stories to date. We are taking proactive steps to
build on this further, working in collaboration with customers, suppliers, industry bodies and research organisations as set out in our report under
the TCFD framework on pages 16 and 17. The data set out in this section corroborates the strong environmental credentials of the group.
Carbon emissions
We have calculated our carbon footprint according to the World Resources Institute (‘WRI’) and World Business Council for Sustainable
Development (‘WBCSD’) GHG Protocol, which is the internationally recognised standard for corporate carbon reporting. The group’s total CO2
emission data is based on Scope 1 and Scope 2. Scope 1 emissions are direct emissions resulting from fuel usage and operation of facilities.
Scope 2 emissions are indirect energy emissions resulting from purchased electricity and other power for own use.
The group collects monthly consumption information from each facility and converts to tonnes of CO2e (‘tCO2e’) produced using the DEFRA
published national carbon conversion factors.
Energy consumption and intensity
A key priority of the company is to manage energy efficiently, thus reducing our carbon footprint and creating value for our stakeholders. It is
pleasing to report, in the table below, the high level trend of a reducing MWh of energy consumption as a proportion of revenue generated.
2024
2023
2022
Scope 1
18,240
20,011
16,235
Scope 2
140,898
137,160
132,548
Total energy consumption (MWh)
159,138
157,171
148,783
Total energy intensity (MWh per £000 revenue)
0.709
0.785
1.001
Greenhouse Gas (‘GHG’) emissions (tCO2e)
GHG emissions are set out below under both location and market-based methods. The location-based method reflects the average emissions
intensity of the grids on which energy consumption occurs (using mostly grid-average emission factor data), namely the UK grid for the group.
The market-based method reflects emissions from electricity that companies have specifically chosen. It derives emission factors from
contractual instruments, which include any type of contract between two parties for the sale and purchase of energy bundled with attributes
about the energy generation. Market-based emissions are therefore shown net of electricity supplied to the group under OFGEM certified
renewable contracts and gas supplied on contracts with offset arrangements.
Location-based
2024
2023
2022
Scope 1
3,283
3,602
2,974
Scope 2
28,878
26,524
28,144
Total location-based emissions
32,162
30,126
31,118
Market-based
2024
2023
2022
Scope 1
1,687
3,602
2,974
Scope 2
—
—
—
Total market-based emissions
1,687
3,602
2,974
13
Castings P.L.C.
Annual Report for the year ended 31 March 2024
Strategic Report
GHG intensity (location-based)
2024
2023
2022
Revenue intensity (tCO2e per £000 revenue)
Foundry operations (gross revenue)
0.120
0.126
0.199
Machining operations (gross revenue)
0.052
0.067
0.088
Group total (net revenue)
0.143
0.151
0.209
Production intensity (tCO2e per production tonne)
Foundry operations
0.523
0.496
0.512
Group total
0.557
0.528
0.547
For the foundry businesses, the most appropriate metric to measure the intensity of GHG emissions is by production tonne; this has increased
to 0.523 (2023 – 0.496) tCO2e per production tonne. We actively seek to minimise energy use in the group, so it is disappointing to see an
increase in GHG intensity following reductions in emissions per tonne produced in each of the last three financial years. Consumption monitoring
and reduction projects are ongoing to build on the longer term improvements made.
The machining operation does not have a production weight, therefore, the relevant intensity metric used is emissions per thousand pounds of
machining revenue; emissions have decreased to 0.052 (2023 – 0.067) tCO2e per £000. High demand levels have supported efficiency in the
machine shop, resulting in a strong conversion of power consumption into revenue.
Whilst many foundry competitors still utilise fossil fuels to power furnaces, generating direct emissions, the group’s operations utilise furnaces
and CNC machines which are powered by purchased electricity. This allows the plant and equipment to be fuelled by power purchased from
commercial energy providers supplying power from OFGEM certified renewable sources.
Waste, water and recycling
The group has made significant investments in scrap metal, plastic and cardboard recycling in recent years. The table below sets out the group’s
waste classifications and water use:
2024
2023
2022
Recycled waste (tonnes)
76
32
48
Non-recycled waste (tonnes)
36,355
36,553
35,070
Hazardous waste (tonnes)
1,500
688
586
Water use (m3)
71,232
71,440
65,689
Intensity
Recycled waste (tonnes per thousand tonnes produced)
1.32
0.56
0.84
Non-recycled waste (tonnes per thousand tonnes produced)
629.48
628.13
615.93
Hazardous waste (tonnes per thousand tonnes produced)
25.99
12.06
10.30
Water use (m3 per thousand tonnes produced)
1.234
1.252
1.154
The group has compacted and sold waste bales of plastic and cardboard for several years and continues to seek ways of increasing the
recycling profile. Pleasingly the level of recycled waste has increased by 44 tonnes during the year.
The vast majority of the non-recycled waste relates to sand. The group is seeking viable technical solutions to enable sand re-use in the
production process and the commercial re-use of sand by-products.
Hazardous waste increased due to a change being made to the planned machine maintenance programme in the machining business.
Unfortunately this has resulted in higher volumes of coolant waste, which is in excess of those we can process through our current recycling
facilities. Investments in additional coolant evaporation and re-use equipment are being reviewed to handle the higher volumes of coolant being
removed from machinery.
The majority of the water consumed by the group is within the foundry production process, particularly within the sand mills. As a result, it is not
anticipated that the volume of water consumed will reduce significantly other than with variations in production volumes.
There have been no environmental fines in the past three years and NOx, SOx and VOC emissions are not material.
The group’s facilities are ISO 14001 accredited, and our practices and procedures are subject to regular environmental audits by external
consultants.
The group demands that all activities and services comply with applicable laws and regulations.
14
Castings P.L.C.
Annual Report for the year ended 31 March 2024
Castings P.L.C.
Social
The foundation of the group’s strength is its people. We strive to support our employees’ health and wellbeing whilst driving a performance
culture of business understanding and shared values. The group’s policy is to employ people who embody its core values of commitment and
excellence. These values apply to all employees regardless of seniority or position, including directors.
2024
2023
2022
Proportion of new employees joining on temporary or short-term contracts
10.2%
0.0%
0.0%
Number of apprentices recruited
10
6
10
Staff turnover*
15.8%
18.5%
21.1%
* Staff turnover is calculated by reference to the number of people who have left employment (having worked for at least a three month period)
as a proportion of the average number of employees for the year.
The group is a significant employer in each of the locations in which it operates and takes pride in operating its business based on permanent
contracts, with employees carrying full employee status and without the use of zero hours contracts. As a result, the group traditionally has high
staff retention levels and a dedicated, long-term, focussed workforce.
During the year, one part of the group started using an agency to support the hiring and on-boarding process of new employees, which had
been an area of high employee turnover. As a result, the proportion of employees joining on temporary contracts has increased.
Whilst staff turnover has decreased during the year, the group continues to look to improve employee wellbeing and return to pre-pandemic
retention levels. We continue to invest in group facilities and our people to this end.
In addition to the structured apprenticeship training, the group provides internal, external and continuous on-the-job training for all staff as
required. As a result of the nature of the training carried out, the group does not collate data concerning the number of hours of training
conducted each year.
The group seeks to communicate with its employees in a structured, open manner, including regular briefings and dissemination of relevant
information on the group and business unit. Employees are informed weekly of production levels and the relative production performance.
Similarly, they are kept informed of any factor affecting the group and the industry generally.
Their involvement in the group’s performance is encouraged by means of a production bonus and at the time of annual wages and salaries
review they are made aware of all economic factors affecting the previous year’s performance and the outlook for the ensuing year.
Equality, diversity and inclusion
Recognising the demands of our customers and our strategy, the group’s diversity and recruitment policy is to recruit the best available people
and to invest in their training and development to enable a high level of retention. We are committed to diversity and equality, judging applications
for employment neither by race, nationality, gender, age, disability, sexual orientation nor political bias. We have made a commitment to consider
applicants from a wide range of educational backgrounds and have an active apprenticeship programme.
The group gives full consideration to employment applications by disabled persons where they can adequately fulfil the requirements of the
position. If necessary, we endeavour to retrain any employee who becomes disabled during their period of employment with the group.
The gender of our staff at 31 March 2024 was as follows:
Male
Female
Non-executive directors
3
—
Executive directors
2
—
Senior managers
33
3
Other employees
1,083
100
1,121
103
Human rights
The group’s operations are all based in the United Kingdom. Each of the group’s businesses has a core of long-standing, local suppliers and
several key partners based in the European Union. The group has minimal activity with suppliers outside of these areas, therefore due to the
existing regulatory controls in our core areas of geographical activity, human rights is not considered to be a material issue.
Management have a high level of involvement in the day-to-day activities of the business and its suppliers and are trained to identify areas of
concern which may not align with the standards the group demands. The board receives regular updates on corporate responsibility issues
including the UK Modern Slavery Act. We have a Code of Conduct that sets out our policy on compliance with legislation, child labour, anti-
slavery and human trafficking and conditions of employment.
Health and safety
The board regards the promotion of health and safety measures as a mutual objective for management and employees at all levels. It is our
policy to do all that is practicable to prevent personal injury and damage to property and to protect everyone from foreseeable hazards, including
third parties in so far as they come into contact with the group’s activities.
Environmental, Social and Governance
continued
15
Castings P.L.C.
Annual Report for the year ended 31 March 2024
Strategic Report
The group has clearly defined health and safety policies and we operate a system of strict reporting. Regular audits of health and safety at the
group’s manufacturing operations are carried out using independent agencies who make recommendations for improvements to achieve best
practice wherever appropriate.
The group’s health and safety policy is regularly reviewed and modified as circumstances and experiences dictate. The group encourages the
maintenance of consistently high standards and each site is required to develop a safety management system. Health and safety training is a
continual process at each site and therefore is completed on a regular basis and covers all levels within the group.
Lost time incidents
2024
2023
2022
Accidents
203
219
185
RIDDORs
8
8
10
Near misses (foundries only)
172
66
40
Intensity (per million hours worked)
Accidents
81.9
89.9
77.0
RIDDORs
3.2
3.3
4.2
Near misses (foundries only)
107.2
39.3
23.3
We have seen a reduction in both the total number of accidents and the intensity of accidents and RIDDORs (an incident resulting in absence of
at least seven consecutive shifts) during the year, which is pleasing. As we continue to promote a health and safety focussed agenda across the
group, the volume of near misses properly reported has increased significantly. This has been a positive development, with the cultural change
enabling more to be done to prevent accidents occurring moving forwards. Management continues to strive to reduce these figures further and
investments continue to be made in areas where the accident risks are the greatest.
Governance
Strong and straightforward corporate governance underpins all our business activities. The group’s arrangements are set out in the Corporate
Governance section on pages 24 and 25. There have been no political contributions made in the past three years.
Board diversity
Gender identity
Number
of board
members
Percentage
of the board
Number
of senior
positions on
the board
(CEO, CFO,
SID and
Chair)
Number in
executive
management
Percentage
of executive
management
Men
5
100%
4
—
—
Women
—
—
—
—
—
Prefer not to say
—
—
—
—
—
Ethnic background
White British or other White (including minority-white groups)
5
100%
4
—
—
Mixed/Multiple Ethnic Groups
—
—
—
—
—
Asian/Asian British
—
—
—
—
—
Black/African/Caribbean/Black British
—
—
—
—
—
Other ethnic group including Arab
—
—
—
—
—
Not specified/prefer not to say
—
—
—
—
—
All five members of the board are white British males and therefore the targets under LR 9.8.6 (9, 10) of 40% of the board being female and at
least one of the four senior positions on the board being occupied by a female and having one board member of minority ethnic origin have not
been met. This is an area that remains under review by the nomination committee.
16
Castings P.L.C.
Annual Report for the year ended 31 March 2024
Castings P.L.C.
Responsible business
We are committed to conducting business with the utmost integrity and in accordance with the Bribery Act 2010 and have a clear anti-bribery
and corruption policy in place, which is available on the company website. We communicate our expectations to all employees and have a zero
tolerance policy in respect of improper or criminal behaviours; all directors and employees are encouraged to report any suspicions of bribery.
Non-financial and sustainability statement
We comply with the non-financial reporting requirements contained in sections 414CA and 414CB of the Companies Act 2006. Information
regarding our business model is set out on page 5; environmental matters on pages 12 to 14; employees, social matters and human rights on
pages 14 and 15; and anti-corruption and anti-bribery matters are set out above.
Task Force on Climate-related Financial Disclosures (‘TCFD’)
The company has prepared disclosures based on TCFD recommendations in accordance with Listing Rules 9.8.6R as set out below.
Governance
Board oversight and
management role
Climate risk is a principal risk included on the group risk register and executive management has formed a
working group, as set out in the process section on page 17, which has access to professional advice and
support, to continue to understand the group’s climate-related risks and opportunities and the associated
impacts upon the group, its stakeholders and markets.
Whilst no formal targets have been established as yet, the strategic focus of the group’s activities and capital
investment decisions include sustainability as a key consideration.
Strategy
Climate-related risks
and opportunities
Short term (0-2 years)
The group can provide casting, machining, assembly and ancillary services with a low level of transport (and
therefore GHG emissions emitted) between group sites and with manufacturing powered primarily by electricity
generated from renewable sources. Management believes this places the business in a strong position to support
its customers’ and stakeholders’ environmental aspirations, particularly when compared to coal-powered or
geographically disparate competitors.
Recycling, energy efficient plant solutions and waste management continue to be areas of focus with regard to
reducing the group’s carbon footprint and landfill waste. Through its participation in industry bodies the group
supports several research projects to find commercial uses for remaining waste materials, such as sand.
The group has introduced green power and gas contracts, which alongside our use of electric induction furnaces
and 100% scrap steel makes us a strong supplier to those customers seeking a green iron based strategy.
Medium term (2-5 years)
There is an opportunity for the group to utilise its considerable production experience, financial resource and
relationships as a supplier to the established commercial vehicle markets to enter new or additional product
categories as they develop at scale. In the nearer term, this means supplying parts to the most fuel efficient
combustion engines ever produced by OEMs for HGVs as well as expanding our supply of parts to offshore
power generation customers.
Further opportunities are expected to arise for supply into the smaller end of the truck sector which is naturally
more suited to the battery electric vehicle (‘BEV’) technology. This is not a market that the group has served to
any great extent previously.
Long term (5 years+)
As BEV and hydrogen fuel cell powertrain technologies evolve, there is a risk that the market for the group’s cast
iron internal combustion engine (‘ICE’) products could reduce, albeit the application of such technologies to the
group’s core heavy truck market is expected to be longer term. This would directly impact approximately
one-third of group revenue, but opportunities will exist for the group within the new product ranges.
Environmental, Social and Governance
continued
17
Castings P.L.C.
Annual Report for the year ended 31 March 2024
Strategic Report
Impact on the group’s
strategy and financial
planning
The group’s plant is depreciated over a maximum life of 15 years and is not considered at risk of impairment
because of a reduction in cast iron business under currently reasonably foreseeable circumstances.
It is expected that this transition away from ICEs will be a medium to long-term, gradual strategic issue and
therefore investment will be appropriately managed to avoid redundant undepreciated plant that may become
subject to impairment. Structural parts to heavy goods vehicles will potentially continue to be made from cast iron
due to the material’s favourable characteristics.
Strategy
Resilience of
the company’s
strategy, taking
into consideration
different climate-
related scenarios
The group’s production sites are based in Brownhills, West Midlands and Dronfield, Derbyshire. The physical risks
of climate change are not expected to materially impact the production capability of either UK site.
Approximately one-third of the group’s turnover arises from the sale of parts which are used by our customers to
produce ICEs for heavy trucks. This revenue would be at risk in the event of a sudden technological or regulatory
development which rendered the ICE obsolete.
This scenario is considered unlikely to develop quickly given the reliance of the human population on a well-
functioning transport and logistics infrastructure to transport essential items such as food. In addition, any
technology break-through would need significant infrastructure changes to support the charging or re-fuelling
of an alternative powertrain for heavy trucks. At present the group is working with OEMs on a variety of project
opportunities, whilst research into the technical direction of the market (in response to climate-related scenarios)
continues, including:
• Supplying parts which make current large diesel engines significantly more efficient.
• Providing additional on-site ancillary services to reduce unnecessary transportation of parts.
• Making our own product using renewable energy .
• Collaborating to supply parts and potential capacity for the manufacture of electric trucks.
Whilst we are working with our key customers to facilitate movement away from ICEs and are active commercially
in this area, our key customers continue to invest significantly in new, more efficient diesel engine production
facilities and therefore we continue to see the phase out of diesel engines in the heavy truck market as a long
term issue in our scenario planning.
At present, we continue to focus on the short to medium term opportunities the transition to a zero-emission
market can provide, whilst utilising our engineering expertise and customer relationships to develop our long term
strategy alongside our customer base.
This initial consideration of resilience has been set out by the group and consideration is being given to more
detailed scenario analysis.
Process for
identifying and
managing risks
The working group formed to review climate-related risks and opportunities identifies and manages climate-
related risks.
The working group, which meets once per quarter, includes the group finance director, group financial controller,
group health, safety and environment director, the group CEO where appropriate and other members of the
group’s senior management team when relevant issues are due for discussion.
The working group has been supported by external advisers both with regard to market developments and ESG
reporting during the year and following this the working group has established an appropriate internal response to
developments.
Any significant issues will continue to be raised to the audit and risk committee through the review of the group
risk register and associated updates.
Metrics and targets
Metrics have been reported within the relevant sections of the group ESG Report on pages 12 to 14.
Consideration is being given as to the targets that might be used by the group to manage climate-related risks
and opportunities and performance against those targets.
18
Castings P.L.C.
Annual Report for the year ended 31 March 2024
Castings P.L.C.
Viability Statement
In conducting the review of the group’s long-term prospects, the directors considered economic and market conditions in conjunction with the
strategy and the principal risks facing the group (as set out in the Strategic Report on pages 2 to 19). This assessment considered the impact of
the principal risks on the business model and on future performance, liquidity and solvency and was mindful of the limited forward visibility that
the group has in respect of its major market of commercial vehicles.
In preparing this statement of viability, the directors have considered the prospects of the group over the three year period immediately following
the financial year ended 31 March 2024. This longer-term assessment process supports the board’s statements on both viability, as set out
below, and going concern (on page 25).
A three year period was determined as the most appropriate for the purpose of concluding on longer-term viability, given the limited forward
visibility of the group.
The directors’ viability assessment included a review of three year profit and cash flow estimates, alongside the group’s current position, and
a review of the sensitivity analysis performed on the three year estimate whereby the principal risks, particularly those related to markets and
customers, were applied to the plan. The assessment was based on current demand schedules from customers and assumed that these levels,
along with average selling prices and costs, remain consistent. The group’s recent record of cash conversion was used to estimate the cash
generation in the period under review. .
A severe but plausible downside scenario was also prepared and assumed a 30% reduction in demand which would cover the loss of the
group’s most significant customer. Furthermore, such a reduction is also in line with the approximate revenue loss in the event that environmental
legislation changes or a technological breakthrough rendered the internal combustion engine obsolete.
In making this viability statement, the directors considered the mitigating actions that would be taken by the group in the event that the principal
risks of the company become realised. The directors also took into consideration the group’s strong financial position at 31 March 2024, with
cash and deposits of £32.5 million, no debt and a history of strong cash generation.
The directors have assessed the viability of the group and, based on the procedures outlined above in addition to activities undertaken by the
board in its normal course of business, confirm that they have a reasonable expectation that the group will be able to continue in operation and
meet its liabilities as they fall due over the period to 31 March 2027.
19
Castings P.L.C.
Annual Report for the year ended 31 March 2024
Strategic Report
S172(1) Statement
The following disclosures describe how the
directors have had regard to the matters set
out in section 172(1)(a) to (f), relating to the
directors’ duty to promote the success of the
company, and forms the directors’ statement
required under section 414CZA(1) of the
Companies Act 2006.
Stakeholder engagement
Our success depends on the relationships
we have with the people, communities
and organisations that have an interest in
our business and may be impacted by the
decisions we take. The key stakeholders are
set out in the business model on page 5 and
the manner of our engagement with them is
described below.
Customers
Dedicated sales, technical and production
teams engage with customers to foster a
collaborative working relationship for the long
term. Investment in the latest production
technologies ensures we provide the quality,
efficiency and on-time delivery they require.
Employees
An important part of the culture of the group
is our open-door style of management. All
senior personnel are visible throughout the
business on a daily basis engaging with the
workforce across all levels; it is important
to both the company and our employees
that they have that chance to share their
opinions. In addition, regular function-specific
committee meetings take place as well as
regular information sharing to the whole
workforce.
Shareholders
We engage with our shareholders through a
number of channels which include the Annual
Report, AGM, investor site visits, one-to-
one meetings and telephone conversations.
They are interested in the strategy and its
execution, generating strong returns and
maintaining financial discipline. We report and
discuss these areas on a regular basis.
Communities and environment
As a significant employer for each area
where we are based, we support local
employment and apprenticeship schemes.
We seek to engage and collaborate with
local educational institutes where possible
and increase the overall visibility of the group.
The local communities are keen to ensure
we are supporting and investing in local
jobs, operating safely and ethically as well
as reducing our environmental impact. We
provide direct employment to over 1,200
people, invest in our facilities to provide a
safe workplace and consider opportunities to
ensure a more sustainable strategy.
Suppliers
We seek to improve our business
relationships with our key suppliers to protect
the operations of the company. We engage
with suppliers to ensure they comply with our
code of conduct to maintain high standards
of supply.
Principal decisions taken
during the year
Foundry capacity investment
The board has approved a new foundry
production line at our William Lee site. The
plant is expected to be commissioned
by June 2025 at a cost of around £17
million, funded from internal resources. The
additional capacity (approximately 12,000
tonnes) will enable us to satisfy demand
for our current heavy truck parts, as well
as providing capacity to take advantage
of new and growing market areas such as
truck electrification, wind energy and further
opportunities in the US.
Supplementary dividend
The board declared a supplementary dividend
of 7.00 pence per share as set out in note
8 on page 52. During our engagement
with investors, the level of cash maintained
by the company was discussed and the
board decided to exercise their discretion
and return an additional £3.05 million to
shareholders. In reaching this decision the
board considered the company’s solvency at
the time, its investment plans and the impact
on the creditors of the company. The board
concluded that the payment of the dividend
had no material effect on the company’s
ongoing business and also that the company
had sufficient distributable reserves to pay the
dividend.
The Strategic Report was approved by the
board and signed on its behalf by
A. Vicary
Chief Executive Officer
12 June 2024
20
Castings P.L.C.
Annual Report for the year ended 31 March 2024
Castings P.L.C.
Castings P.L.C.
Board of Directors
Executive directors
Adam Vicary
Chief Executive Officer
Having obtained a degree in metallurgy and
a business masters, Adam has worked in
the foundry industry for all of his career and
joined the company in September 2010 as
joint managing director. He was appointed to
the main board in April 2012, becoming chief
executive on 31 March 2017.
Steve Mant
Finance Director
Steve is a fellow of the ICAEW and joined the
company in June 2010. He was appointed
company secretary and finance director
on 1 November 2010. Prior to joining the
company he had been working for BDO LLP
specialising in manufacturing, international
and listed companies.
Non-executive directors
Alec Jones
Chairman
Alec was appointed a director in April 2012,
becoming chairman on 1 January 2023, and
is an independent director. He was a partner
in PricewaterhouseCoopers for 27 years until
his retirement in 2010.
Andrew Eastgate
Senior Independent Non-executive
Director
Andrew was appointed a director on
1 September 2018 and is an independent
director. He is a solicitor and was a partner in
Pinsents. He was chairman of Epwin Group
plc until 21 May 2024 and was previously a
non-executive director of Headlam Group plc.
Andrew is chairman of the remuneration and
nomination committees and is also a member
of the audit and risk committee.
Mark Smith
Non-executive Director
Mark was appointed a director on
16 November 2022 and is an
independent director. He was a partner in
PricewaterhouseCoopers LLP for 24 years
until his retirement in 2021 and is currently
the chair of the audit, risk and assurance
committee of the West Midlands Combined
Authority and the chair of the risk, audit and
finance committee of the Royal Shakespeare
Company. Mark is chairman of the audit and
risk committee and is also a member of the
remuneration and nomination committees.
21
Castings P.L.C.
Annual Report for the year ended 31 March 2024
Strategic Report
Corporate Governance
Directors’ Report
The directors submit the Annual
Report and audited consolidated
financial statements of Castings
P.L.C. for the year ended
31 March 2024.
Strategic Report
The Strategic Report, which contains a review
of the group’s business, a description of the
principal risks and uncertainties facing the
group and commentary on the likely future
developments, is set out on pages 2 to 19.
Financial results and
dividend
The profit for the year after taxation was
£16,721,000 (2023 – £13,790,000),
full details of which are set out in the
consolidated statement of comprehensive
income on page 39.
An interim dividend of 4.13 pence per share
was paid in January 2024 in respect of the
year ended 31 March 2024.
The directors recommend a final dividend of
14.19 pence per share payable on
23 August 2024 to shareholders on the
register on 19 July 2024, making a total
ordinary distribution of 18.32 pence for the
year.
A supplementary dividend of 7.00 pence
per share has been declared which will be
payable on 24 July 2024 to shareholders on
the register on 21 June 2024.
Share capital
The company’s capital consists of
43,632,068 (2023 – 43,632,068) ordinary
shares of 10 pence each with voting rights.
There are no restrictions on voting rights.
There are no restrictions on the transfer of
shares in the company and in particular there
are no limitations on the holding of shares
and no requirements to obtain the approval of
the company, or of other shareholders, for a
transfer of shares.
Beneficial owners of shares who have been
nominated by the registered holder of those
shares to receive information rights under
Section 146 of the Companies Act 2006 are
required to direct all communications to the
registered holder of their shares rather than to
the company’s registrar, Link Asset Services,
or to the company directly.
Subject to legislation and to any resolution of the company in general meeting, all unissued
shares are at the disposal of the board who may allot, grant options over or otherwise dispose
of them to such persons, on such terms and at such times as it may think fit.
The company is authorised to purchase its own shares; 100,000 shares were purchased
during the year (2023 – 47,900) at a total cost of £396,000 (2023 – £152,000).
Directors
The directors of the company are listed on page 20 and their interests in the ordinary share
capital at the beginning and end of the year were:
Beneficial holdings
2024
Total
2023
Total
A. N. Jones
—
—
A. Vicary
35,000
35,000
S. J. Mant
13,500
12,350
A. K. Eastgate
1,000
1,000
M. L. Smith
—
—
B. J. Cooke retired as a director on 15 August 2023. There have been no changes in the
shareholdings of directors since the year end.
In accordance with Provision 18 of the UK Corporate Governance Code all directors are
subject to annual re-election. The board considers that the performance of those directors
proposed for re-election continues to be effective, that they remain independent in judgement
and that they demonstrate a strong commitment to their role.
The unexpired period of the contracts of service for A. Vicary and S. J. Mant is one year. A. N.
Jones, A. K. Eastgate and M. L. Smith do not have contracts of service.
The company has made qualifying third-party indemnity provisions for the benefit of its
directors which were in force during the year and exist at the date of this report.
There are no agreements between the company and its directors or employees providing for
compensation for loss of office or employment that occurs because of a takeover bid.
The number of directors is not subject to any maximum but shall not be less than two.
The company may by ordinary resolution elect any person to be a director and the board
has the power to appoint any person to be a director, but any director so appointed will be
subject to election at the next Annual General Meeting.
There is no minimum shareholding requirement for directors.
The business of the company is managed by the board, who may exercise all such powers of
the company as are not by legislation or by the company’s Articles required to be exercised in
general meeting. The board may make such arrangements as it thinks fit for the management
and transaction of the company’s affairs and may for that purpose appoint local boards,
managers and agents and delegate to them any of the powers of the board (other than the
power to borrow and make calls on shares) with power to sub-delegate.
Other than the directors’ service contracts, the directors have no interests in any contract of
the business.
22
Castings P.L.C.
Annual Report for the year ended 31 March 2024
Castings P.L.C.
Castings P.L.C.
Substantial shareholdings
As at 12 June 2024, the company had been notified, in accordance with DTR Rule 5, of the
following disclosable interests, including directors, in its voting rights:
Number
%
Ruffer LLP
6,695,335
15.4
Aberforth Partners’ Clients
6,107,078
14.1
Janus Henderson Group PLC
2,887,757
6.6
Threadneedle Asset Management Limited
2,191,674
5.0
B. J. Cooke
2,008,328
4.6
NR Holdings Limited
1,800,000
4.1
Further details of employee involvement
and the group’s policy on the employment
of disabled persons are given under the
Environmental, Social and Governance
section on pages 12 to 17 and the S172(1)
statement on page 19.
Health and safety
As required by legislation, the group’s
policy for securing the health, safety and
welfare at work of all employees has been
brought to their notice. In addition, safety
committees hold regular meetings. Further
details of health and safety are given under
the Environmental, Social and Governance
section on pages 12 to 17.
Financial instruments
Details of the use of financial instruments
by the group are contained in note 20 in
the notes to the consolidated financial
statements.
Research and development
Activities and likely future developments for
the business are described in the Strategic
Report on pages 2 to 19.
Articles of Association
Any amendments to the Articles of
Association have to be adopted by the
members by a special resolution in general
meeting. The current articles were adopted in
August 2011.
Post balance sheet events
There were no reportable subsequent events
following the balance sheet date.
Special business
There will be the following items of special
business at the Annual General Meeting.
Directors’ authority to allot shares
Approval will be sought to renew the authority
given to the directors to allot shares in the
company in accordance with section 551
of the Companies Act 2006. The present
authority was granted on 15 August 2023
and under the Companies Act must be
renewed at least every five years. The
renewed authority would therefore expire on
19 August 2029, but will be put to annual
shareholder approval.
Authority will also be sought from
shareholders to allow the directors to allot
equity securities for cash as if section 561
of the Act (which gives shareholders certain
pre-emption rights on the issue of shares)
did not apply. Such allotments being up to
a maximum nominal amount of £218,160,
being approximately 5% of the current issued
share capital. The renewed authority would
expire on 19 August 2025.
In any three year period no more than 7.5%
of the issued share capital will be issued on a
pre-emptive basis.
The proposed resolutions are set out as items
10 and 11 in the Notice of Meeting.
Authority to purchase own shares
At the Annual General Meeting in 2023, the
board was given authority to purchase and
cancel up to 4,358,844 of its own shares,
representing 9.99% of the company’s existing
shares, through market purchases on The
London Stock Exchange. The maximum price
to be paid on any exercise of the authority
was restricted to 105% of the average of the
middle market quotation for the shares for the
five dealing days immediately preceding the
day of a purchase. The minimum price which
may be paid for each share is 10 pence.
The current authority to make market
purchases expires at the forthcoming Annual
General Meeting. The directors are now
seeking the approval of shareholders for
the renewal of this authority upon the same
terms, namely to allow the company to
purchase and cancel up to 4,358,844 of its
own shares, representing 9.99% of its issued
share capital at 31 March 2024. The authority
is sought by way of a special resolution,
details of which are also included in the
Notice of Meeting as item 12.
This authority will only be exercised if the
directors, in the light of market conditions
prevailing at the time, expect it to result in
an increase in future earnings per share, and
if it is in the best interests of shareholders
generally.
Stakeholder engagement
The key stakeholders are set out in the
Business Model on page 5. The engagement
and decisions taken during the year are
set out in the Section 172(1) statement on
page 19.
Employee involvement
Employees are informed weekly of
production levels and the relative production
performance. Similarly, they are kept informed
of any factor affecting the group and the
industry generally.
Their involvement in the group’s performance
is encouraged by means of a production
bonus and at the time of annual wages and
salaries review, they are made aware of
all economic factors affecting the previous
year’s performance and the outlook for the
ensuing year.
Directors’ Report
continued
23
Castings P.L.C.
Annual Report for the year ended 31 March 2024
Strategic Report
Corporate Governance
Independent auditor
The auditor, Forvis Mazars LLP, have
indicated their willingness to continue
in office. A resolution proposing their
reappointment as auditor of the company and
authorising the directors to determine their
remuneration will be submitted at the Annual
General Meeting.
Each of the persons who are directors at the
date when this report was approved confirms
that so far as each of the directors is aware,
there is no relevant audit information of which
the group’s auditor is unaware, and each of
the directors has taken all steps that he ought
to have taken as a director to make himself
aware of any relevant audit information and
to establish that the auditor is aware of
that information.
Significant agreements
There are no significant agreements to which
the company is party that take effect, alter
or terminate upon a change of control of the
company following a takeover bid.
Corporate governance
Details of the group’s corporate governance
policies are dealt with on pages 24 and 25.
Greenhouse gas emissions
Details of the group’s greenhouse gas
emissions are set out on pages 12 and 13.
Cautionary statement
Under the Companies Act, a company’s
Strategic Report and Directors’ Report
are required, among other matters, to
contain a fair review by the directors of the
group’s business through a balanced and
comprehensive analysis of the development
and performance of the business of the group
and the position of the group at the year end,
consistent with the size and complexity of the
business.
The Directors’ Report set out above, including
the Chairman’s Statement, the Principal
Risks and Uncertainties and Environmental,
Social and Governance section incorporated
into it by reference (together, the Directors’
Report), has been prepared solely to provide
additional information to shareholders to
assess the company’s strategies and the
potential for those strategies to succeed. The
Directors’ Report should not be relied upon
by any other party or for any other purpose.
The Directors’ Report (as defined) contains
certain forward-looking statements. These
statements 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 and 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.
Approval of Directors’
Report and Responsibility
Statement
Each of the persons who is a director at the
date of approval of this report confirms that to
the best of his knowledge:
a. each of the group and parent company
financial statements, prepared in
accordance with International Financial
Reporting Standards in accordance with
the Companies Act 2006 and UK Financial
Reporting Standards respectively, gives a
true and fair view of the assets, liabilities,
financial position and the profit or loss of
the issuer and the undertakings included
in the consolidation taken as a whole; and
b. the Chairman’s Statement, Strategic
Report and Directors’ Report include
a fair review of the development and
performance of the business and
the position of the company and the
undertakings included in the consolidation
taken as a whole, together with a
description of the principal risks and
uncertainties they face.
The directors consider that the Annual
Report and financial statements, taken as a
whole, is fair, balanced and understandable
and provides the information necessary for
shareholders to assess the company’s
and group’s performance, business model
and strategy.
On behalf of the board
A. N. Jones
Chairman
12 June 2024
24
Castings P.L.C.
Annual Report for the year ended 31 March 2024
Castings P.L.C.
Castings P.L.C.
General
Castings P.L.C. recognises the importance
of high standards of corporate governance.
The board has considered the principles
and provisions of the 2018 UK Corporate
Governance Code and will continue to adhere
to them where it is in the interests of the
business, and of the shareholders, to do so.
The manner in which the board provides
leadership of the company within a
framework of prudent and effective controls is
set out in this section.
Board of directors
The board meets regularly to monitor the
current state of business and to determine
its future strategic direction.
During the financial year, the board comprised
two executive directors and four non-
executive directors, reducing to three on
15 August 2023. The non-executive directors
are independent of executive management
and none of the non-executive directors
participate in share option or other executive
remuneration schemes, nor do they qualify for
pension benefits.
Notwithstanding the length of service, the
board considers that the chairman,
A. N. Jones, remains independent and that
the skill and experience he brings and his
overall contribution to the board remains of
significant value to the group.
B. J. Cooke stood down as a non-executive
director on 15 August 2023.
The directors maintain their knowledge
through a combination of technical and
market bulletins and attendance at seminars.
The company secretary has responsibility for
bringing new regulatory developments to the
attention of the board.
Board committees
The principal committees established by the
directors are:
Audit and risk committee
Further details are contained within the Audit
and Risk Committee Report on page 26.
Remuneration committee
Further details are set out in the Directors’
Remuneration Report on page 27.
Nomination committee
The nomination committee is chaired by
A. K. Eastgate with M. L. Smith also a
member. The group chairman, whilst not
a formal member of the committee, is also
invited to attend meetings. The committee
met once during the year. The committee
takes an active role in considering, with
the wider board, the overall culture of the
company. It is also involved in ensuring the
company considers equality, inclusion and
diversity in senior management positions.
The terms of reference for the three
committees are available on the company’s
website www.castings.plc.uk.
Effectiveness
The board undertakes an annual assessment
of its own performance, its committees and
the directors. The executive directors are
appraised annually by the chairman and
the non-executive directors. The chairman
is appraised annually by the non-executive
directors. The chairman considers the
effectiveness of each non-executive director
annually.
The results of these appraisals are
considered by the remuneration committee
for the determination of their remuneration
recommendations.
Directors’ conflicts
of interest
A director has a statutory duty to avoid a
situation in which he has, or can have, an
interest that conflicts or possibly may conflict
with the interests of the company. A director
will not breach that duty if the relevant matter
has been authorised in accordance with the
Articles of Association by the other directors.
The board has conducted a review of actual
or possible conflicts of interest in respect
of each director. The board has an agreed
process for identifying current conflicts,
authorised conflicts that have been identified
and stipulated conditions in accordance with
the guiding principles and agreed a process
to identify and authorise future conflicts. In
practice, directors are asked to consider and
disclose actual or potential conflicts as and
when a matter arises. There have been no
conflicts identified during the year.
Attendance at board and board committee
meetings during the year is detailed in the
table shown below:
Board
Audit and risk
committee
Remuneration
committee
Director
Required to
attend
Attended
Required to
attend
Attended
Required to
attend
Attended
A. N. Jones
9
9
—
4
—
2
A. Vicary
9
9
—
4
—
—
S. J. Mant
9
9
—
4
—
—
A. K. Eastgate
9
9
4
4
2
2
M. L. Smith
9
9
4
4
2
2
B. J. Cooke (retired 15 August 2023)
4
4
—
2
—
2
Corporate Governance
25
Castings P.L.C.
Annual Report for the year ended 31 March 2024
Strategic Report
Corporate Governance
Relations with
shareholders
The company holds meetings from time
to time with institutional shareholders
to discuss the company’s strategy and
financial performance. The board regularly
receives copies of analysts’ and brokers’
briefings. The chairman is available to
meet major shareholders on request to
discuss governance and strategy. The
senior independent director and other
non-executive directors are also available to
meet shareholders if requested. The Annual
General Meeting is used to communicate with
private and institutional investors.
Internal control
The board is ultimately responsible for the
group’s system of internal controls, including
internal financial control, and for monitoring its
effectiveness. There is a continuous process
for identifying, evaluating and managing the
significant risks faced by the group which
is regularly reviewed and has been in place
throughout the year under review and up to
the date of approval of the Annual Report and
financial statements. However, such a system
is designed to manage rather than eliminate
the risk of failure to achieve business
objectives and can provide only reasonable
and not absolute assurance against material
misstatement or loss. The review covers
all controls including financial, operational,
compliance and risk management.
The directors confirm they have established
procedures necessary to implement the
internal control guidance for directors such
that they comply with the 2018 UK Corporate
Governance Code for the accounting year
ended on 31 March 2024.
Internal financial control
The directors are responsible for maintaining
the group’s systems of internal financial
control. These controls are designed to both
safeguard the group’s assets and ensure the
reliability of financial information used within
the business and for publication. As with
any such systems, controls can only provide
reasonable and not absolute assurance
against material misstatement or loss.
Internal financial control is operated within a
clearly defined organisational structure with
clear control responsibilities and authorities,
and a practice throughout the group of
regular management and board meetings to
review all aspects of the group’s businesses
including those aspects where there is a
potential risk to the group.
For each business there are regular weekly
and monthly reports, reviewed by boards
and management, which contain both written
reports and management accounts. The
accounts include income statements and
balance sheets for the year under review, year
to date and previous year and are compared
with expected results. A variety of operational
and financial ratios are also produced.
Continual monitoring of the systems of
internal financial control is conducted by all
management. The external auditor, who is
engaged to express an opinion on the group
financial statements, also considers the
systems of internal financial control to the
extent necessary to express that opinion. The
external auditor reports the results of their
work to management, including members of
the board and the audit and risk committee.
The board does not consider there is a need
for an internal audit function due to the size
and non-complexity of the group.
Going concern (audited)
The directors have assessed the future
funding requirements of the group and the
company and compared them to the level
of funding available. Details of the cash
position are set out in note 20 to the financial
statements. The group’s objectives, policies
and processes for managing its capital, its
financial risk management objectives, details
of its financial instruments and hedging
activities, and its exposure to credit risk and
liquidity risk are also set out in notes 18 and
20 to the financial statements.
The directors’ assessment of going
concern, included a review of the group’s
financial forecasts or a period of at least
12 months from the date of approval of the
financial statements. They modelled a base
case, which reflects the directors’ current
expectations of future trading in addition to
potential severe but plausible impacts on
revenue, profits and cash flows in a downside
scenario. The base case scenario is based on
current demand schedules from customers
and assumed that these levels, along with
average selling prices and costs remain
consistent. The group’s recent record of cash
conversion was used to estimate the cash
generation in the period under review. The
directors also considered severe but plausible
downside scenarios, further details of which
are set out in the viability statement on page
18 and the accounting policies in note 1.
The directors have a reasonable expectation
that the company and the group have
adequate resources to continue operations
for the foreseeable future and they continue
to adopt the going concern basis in preparing
the financial statements.
Summary
The board takes its responsibilities seriously
albeit there are a number of areas in which
it does not comply fully with the 2018 UK
Corporate Governance Code. It does not
feel that the size or complexity of the group
and the way in which it governs would
be enhanced or strengthened by further
changing the already existing high standards
of corporate governance practised.
For the year ended 31 March 2024 the
company complied with the 2018 UK
Corporate Governance Code other than the
following points:
• Of the three non-executive directors who
served throughout the year one,
A. N. Jones, has been a member of
the board for more than nine years.
Notwithstanding his length of service,
the board considers that A. N. Jones
remains independent and that the skill
and experience he brings and his overall
contribution to the board remain of
significant value to the group.
• The non-executive directors do not have
specified term contracts.
• The finance director also performs the
role of company secretary as there is no
one else within the business qualified to
fulfil the position. The role of company
secretary is not full time.
These are considered acceptable given the
size of the company and the way in which it
operates.
By order of the board
S. J. Mant
Company Secretary
12 June 2024
26
Castings P.L.C.
Annual Report for the year ended 31 March 2024
Castings P.L.C.
Castings P.L.C.
Audit and Risk Committee Report
Responsibilities
The main responsibilities of the audit and risk
committee are:
• to monitor the integrity of the financial
statements of the company and any
formal announcements relating to the
company’s financial performance,
reviewing significant financial reporting
judgements contained in them;
• to provide advice on whether the
company’s Annual Report is fair, balanced
and understandable;
• to review the company’s internal financial
controls and internal control and risk
management systems;
• to review the need for an internal audit
function;
• to make recommendations to the board,
for it to put to the shareholders for their
approval in general meeting, in relation
to the appointment, reappointment and
removal of the external auditor and to
approve the remuneration and terms of
engagement of the external auditor;
• to review and monitor the external auditor
independence and objectivity and the
effectiveness of the audit process, taking
into consideration relevant UK professional
and regulatory requirements;
• to develop and implement policy on the
engagement of the external auditor to
supply non-audit services; and
• to report to the board on how it has
discharged its responsibilities.
Committee composition
and meetings
The audit and risk committee is chaired by
M. L. Smith with A. K. Eastgate also being a
member of the committee. The chairman,
finance director and other directors may
also attend meetings as appropriate to the
business in hand but are not members of the
committee.
The board considers that M. L. Smith has the
most recent and relevant financial experience
as required by the code.
The committee meets at least four times
a year. Meetings are also attended by
representatives of the group’s external
auditor. At meetings attended by the external
auditor time is allowed for the committee
to discuss issues with the external auditor
without the executive directors being present.
The committee operates under formal
terms of reference and these are reviewed
annually. The committee considers that it has
discharged its responsibilities as set out in its
terms of reference to the extent appropriate
during the year. There were no changes to the
terms of reference in the year under review.
Financial reporting and
accounting judgements
During the year, the committee reviewed
the appropriateness of the group’s half-year
and full-year financial statements, taking into
account the reports of the group finance
director and external auditor.
The main areas of focus considered by the
committee during the year were as follows:
• revenue recognition processes have been
reviewed to ensure revenue has been
recognised appropriately and consistency
of policy applied across the group; and
• reviewed the viability statement and
agreed an appropriate assessment period
and the reasonableness of the profit and
loss and cash flow estimates, together
with an evaluation of the main risks
affecting the viability of the company over
that time frame.
Internal control
During the year, the committee reviewed
the effectiveness of the group’s system of
internal controls and risk management and
the disclosures of the results in this Annual
Report. The committee concluded the system
to be effective.
The committee again concurred with the
board’s view that there is no requirement for
an internal audit function due to the size and
non-complex nature of the group.
External auditor
The committee oversees the relationship with
the external auditor and monitors all services
provided by and fees payable to them, to
ensure that potential conflicts of interest
are considered and that an objective and
professional relationship is maintained.
In particular, the committee reviews and
monitors the independence and objectivity
of the external auditor and the effectiveness
of the audit process. At the outset of the
audit process, the committee receives from
the auditor a detailed audit plan, identifying
their assessment of the key risks and their
intended areas of focus. This is agreed
with the committee to ensure coverage is
appropriately focussed.
Feedback on the audit process is requested
from management and for the 2024 financial
year, management was satisfied that there
had been appropriate focus and challenge on
the primary areas of audit risk and assessed
the quality of the audit process to be
satisfactory. The committee concurred with
the view of management.
The committee also keeps under review
the nature, extent, objectivity and cost of
non-audit services provided by the external
auditor; there have been no such services
provided during the year.
Forvis Mazars LLP has been the group’s
external auditor since 2020. In June 2024
the committee reviewed the external audit
mandate and confirmed the continuing
appointment of Forvis Mazars LLP. This was
on the basis the committee was satisfied with
the quality of the audit and that the Forvis
Mazars LLP audit team remained objective
and independent. The committee has
recommended to the board that a resolution
be put to shareholders for the reappointment
of the auditor at the Annual General Meeting.
As part of its work, and in line with its terms
of reference, the committee also considers
the discharge of the board’s responsibilities in
the areas of corporate governance, financial
reporting and internal control, including the
internal management of risk, as identified in
the UK Corporate Governance Code.
M. L. Smith
Chairman of the Audit and Risk Committee
12 June 2024
27
Castings P.L.C.
Annual Report for the year ended 31 March 2024
Strategic Report
Corporate Governance
Directors’ Remuneration Report
Annual statement
On behalf of the board, I am pleased to present the Directors’ Remuneration Report for the year ended 31 March 2024.
The overall objective of the remuneration policy, which was approved at the 2023 AGM, is to produce an outcome which is sufficiently
competitive to retain, motivate and, where necessary, recruit executive directors and senior management whilst supporting the business
objectives of the group. The policy is required to be put to shareholders once every three years and was approved at the AGM held in 2023
with over 88% of votes cast being in favour. The remuneration structure is straightforward and transparent, striking what we believe to be an
appropriate balance between fixed and performance-related remuneration.
During the year, the executive directors received salary increases at a rate broadly in line with that awarded to group employees generally.
Share awards (in the form of nil cost options) were granted to the value of 25% of salary and the annual bonus was paid in accordance with the
directors’ remuneration policy, without the exercise of discretion. Full details of directors’ remuneration are set out below.
By order of the board
A. K. Eastgate
Chairman of the Remuneration Committee
12 June 2024
Remuneration committee
The remuneration committee is chaired by A. K. Eastgate with M. L. Smith also being a member. The group chairman, whilst not a formal
member of the committee, is also invited to attend meetings. The remuneration committee is responsible within the authority delegated by the
board for determining the remuneration policy and for determining the specific remuneration packages for each of the executive directors and
the chairman. The committee also monitors the structure of remuneration of senior management. None of the executive directors were present
at meetings of the committee during consideration of their own remuneration.
The remuneration committee’s terms of reference are available on the company’s website www.castings.plc.uk.
Remuneration policy
The underlying policy in setting the remuneration of the executive directors is that it shall be designed to attract, retain and motivate the directors
and be reasonable and fair in relation to their responsibilities.
28
Castings P.L.C.
Annual Report for the year ended 31 March 2024
Castings P.L.C.
Castings P.L.C.
Detailed policy
The table below sets out the directors’ remuneration policy that was approved at the company’s AGM in 2023 and will apply for three years from
the date of that approval.
Remuneration
element
Purpose and link to
strategy
Operation
Maximum potential value
Base salary
To provide competitive
fixed remuneration in
order to attract and retain
high calibre directors to
deliver growth for the
business.
Reviewed with effect from 1 April each year taking into
account market rates, performance of the individual and
the company and the rates of salary increase across the
group.
Whilst no absolute maximum is
prescribed, increases will take
account of other salary increases
across the group. However, in certain
circumstances, including changing
roles and responsibilities, market
levels and individual and group
performance, the committee will have
discretion to award larger increases.
Benefits
To provide broadly
market competitive
benefits as part of the
total remuneration
package.
Currently include the provision of car benefit, private
healthcare, life assurance and income protection. Benefits
are reviewed annually taking into account market practice.
The committee does have discretion to alter benefits.
Whilst the committee has not set an
absolute maximum on the level of
benefits, these are set at a level that
the committee considers appropriate
against the market.
Annual bonus
To reward contribution
to the performance of
the group, aligned to
shareholder interests.
Bonus is based on paying a proportion of salary subject to
the achievement of a certain level of profits before tax and
exceptional items (‘pbt’). 5% of salary would be payable
per £1 million of pbt between £10m and £18m, 7.5%
of salary per £1 million of pbt between £18m and £21m
and 10% of salary for every £1m of pbt above £21m. The
committee does have discretion to pay an annual bonus
(not to exceed 50% of base salary) if, in its opinion, the
bonus otherwise payable does not adequately recognise
the performance of the individual. It is anticipated that this
discretion would only be used in unusual circumstances.
The committee has discretion to make such changes as
it thinks fit to the pbt targets, particularly having regard to
any significant corporate events such as share issues.
The annual bonus will be subject to malus and clawback
provisions covering such matters as material misstatement
of financial results, material irregularity and misconduct.
The annual bonus cannot exceed
125% of base salary.
Pension
To provide competitive
retirement benefits
as part of the overall
remuneration package.
Executive directors receive 7% of base salary as
contributions to personal pension plans or a cash
equivalent.
7% of base salary.
Share plan
To provide a mechanism
to enable executive
directors to build a
shareholding in the
company with a view
to providing a further
incentive and alignment
with the interests of
shareholders.
Awards will be in the form of nil-cost options and will
normally vest three years after the date of grant, subject
to continued employment with the group. Awards are
not subject to performance measures as the committee
believes that the balance between certainty and a lower
value of award achieves the objective of providing a further
incentive to the executive directors and aligning them
more closely with the interests of shareholders, whilst
remaining straightforward and easily understood. Awards
will normally be subject to a two year holding period
after vesting and may be granted on the basis that the
participant shall be entitled to an additional benefit (in cash
or shares) in respect of dividends paid over the subsequent
holding period. Awards are subject to malus and clawback
provisions covering such matters as material misstatement
of financial results, material irregularity and misconduct.
Awards will normally be granted to
a value of 25% of the base salary
at the date of granting, though the
committee has the discretion to
increase this to 50% of base salary in
exceptional circumstances.
Directors’ Remuneration Report
continued
29
Castings P.L.C.
Annual Report for the year ended 31 March 2024
Strategic Report
Corporate Governance
Non-executive director remuneration
The fees paid to non-executive directors are set by reference to current levels in the market. Non-executive directors do not receive benefits
(except for B. J. Cooke) or participate in the company’s share option or bonus schemes, nor are they eligible to join a company pension scheme.
Statement of shareholding voting
The voting to approve last year’s annual report on the directors’ remuneration and the directors’ remuneration policy at the respective AGMs are
set out in the following table:
Votes for
(including
discretionary)
Number
%
Votes
against
Number
%
Total
number of
votes cast
Number
of votes
withheld
Annual report on remuneration – approved at AGM on 15 August 2023
31,227,906
5,256
31,233,162
1,569
99.98%
0.02%
Directors’ remuneration policy – approved at AGM on 15 August 2023
27,633,050
3,599,620
31,232,670
2,061
88.47%
11.53%
Implementation in 2024/25
The committee has considered market rates and increases awarded to all employees in determining the base salary increases for the executive
directors for 2024/25. The committee did not consult directly with the workforce or any external consultants. The chief executive officer and
finance director receive a base salary of £361,594 and £262,995 respectively for the year ending 31 March 2025. This represents an increase of
4.5%, which is slightly below the average rate of increase for employees across the group.
Scenario charts
The following charts set out the potential total remuneration payments for the year ended 31 March 2025 under our remuneration policy based
on the following assumptions:
• Minimum – base salary, no bonus payment and no share option award.
• Prior year – base salary, bonus based on profit as for year ended 31 March 2024 and 25% of base salary as share option award.
• Maximum – base salary, bonus of 125% of base salary and 25% of base salary as share option award.
Chief executive officer
Finance director
0
50
100 150 200 250 300 350 400 450 500 550 600 650 700 750 800 850 900
51%
40%
50%
10%
100%
Minimum
Remuneration £000
FY24 result
Maximum
13%
36%
0
50
100
150
200
250
300
350
400
450
500
550
600
650
Minimum
Remuneration £000
FY24 result
Maximum
51%
40%
50%
10%
100%
13%
36%
Salary
Bonus
Share option award
Recruitment policy
In the event of the recruitment of a new executive director, the remuneration package would reflect the policy set out above so far as is possible.
The overall maximum level of variable remuneration which may be granted (excluding ‘buyout’ awards as referred to below) is 175% of salary.
The committee may make payments or awards in respect of hiring an employee to ‘buyout’ remuneration arrangements forfeited on leaving
a previous employer. In doing so, the committee will take account of relevant factors, including any performance conditions attached to the
forfeited arrangements and the time over which they would have vested. The committee will generally seek to structure ‘buyout’ awards or
payments on a comparable basis to the remuneration arrangement forfeited. Any such payments or awards are excluded from the maximum
level of variable remuneration referred to above. Fees payable on the appointment of a chairman or non-executive director would be in line with
the fee policy in place at the time of appointment.
30
Castings P.L.C.
Annual Report for the year ended 31 March 2024
Castings P.L.C.
Castings P.L.C.
Directors’ shareholdings (audited)
The directors’ interests in the ordinary share capital of the company (including the interest of connected persons) are set out in the Directors’
Report on page 21.
Directors’ contracts
The executive directors entered into new service contracts on 4 June 2020. The contracts are terminable on twelve months’ notice, which is
considered by the committee to be appropriate, and do not contain any provision for predetermined compensation in the event of termination.
Any payments for loss of office would be determined at the time taking into account all the circumstances. Non-executive directors do not have
a contract of service.
Professional advice
The committee has received advice from Deloitte LLP at a cost of £750. Deloitte LLP has no connection with the company or any of its directors.
Annual Report on Directors’ Remuneration
Directors’ remuneration during the year (audited)
The directors’ remuneration for the year ended 31 March 2024 is set out in the table below.
A. N. Jones
A. Vicary
S. J. Mant
A. K. Eastgate
M. L. Smith1
B. J. Cooke2
2024
£000
2023
£000
2024
£000
2023
£000
2024
£000
2023
£000
2024
£000
2023
£000
2024
£000
2023
£000
2024
£000
2023
£000
Salary/fees
93
51
346
317
252
231
43
38
40
14
15
73
Benefits
—
—
14
14
15
14
—
—
—
—
5
8
Pension contributions
—
—
14
13
14
13
—
—
—
—
—
—
Total fixed remuneration
93
51
374
344
281
258
43
38
40
14
20
81
Performance-related bonus
—
—
242
70
176
70
—
—
—
—
—
—
Total variable remuneration
—
—
242
70
176
70
—
—
—
—
—
—
Total remuneration
93
51
616
414
457
328
43
38
40
14
20
81
1. M. L. Smith was appointed a director on 16 November 2022.
2. B. J. Cooke retired from the company on 15 August 2023
Share options
Share options granted under the Castings 2020 Restricted Share Plan are nil-cost options which vest three years after the grant date and are
subject to continued employment with the group. The options are also subject to a two year holding period during which the participant shall be
entitled to an additional benefit (in cash or shares) in respect of dividends paid in that period. The following nil-cost options were granted during
the year:
Grant date
Number of
shares
Market price
at grant date1
Fair value at
grant date
A. Vicary
12 July 2023
21,779
£3.972
£86,506
S. J. Mant
12 July 2023
15,841
£3.972
£62,918
1. The average closing share price of the five days preceding the grant date.
In the event that the share price on vesting is 50% higher than the market price at the date of grant, the value of the options granted to A. Vicary
and S. J. Mant would be higher by £39,682 and £28,862 respectively. The following nil-cost options are outstanding as at 31 March 2024:
As at
1 April 2023
Options
granted
Options
exercised
As at 31
March 2024
A. Vicary
63,630
21,779
—
85,409
S. J. Mant
46,279
15,841
—
62,120
Directors’ Remuneration Report
continued
31
Castings P.L.C.
Annual Report for the year ended 31 March 2024
Strategic Report
Corporate Governance
Relative importance of spend on pay
The following table shows actual expenditure of the group and change in spend between the current and previous financial years on
remuneration paid to all employees compared to distributions to shareholders.
2024
£000
2023
£000
Change
£000
Change
%
Remuneration of all employees
57,177
50,870
6,307
12.4%
Dividends declared to shareholders
7,960
7,557
403
5.3%
Chief executive officer remuneration
The total remuneration paid to the chief executive officer for the last ten years is as follows:
2024
£000
2023
£000
2022
£000
2021
£000
2020
£000
2019
£000
2017
£000
2017
£000
2016
£000
2015
£000
Performance-related bonus
242
70
53
–
30
57
54
61
100
82
Percentage of maximum1
56.0%
17.6%
14.2%
0.0%
n/a
n/a
n/a
n/a
n/a
n/a
Total remuneration
616
414
376
319
345
357
341
340
372
347
1. The performance-related bonus did not have a maximum level for years 2020 and earlier.
Percentage change in remuneration
2023 to 2024
The following table sets out the annual percentage change in remuneration from 2023 to 2024 for each of the directors compared to that of an
average employee. A. N. Jones was appointed chairman on 1 January 2023, with B. J. Cooke standing down, A. K. Eastgate was appointed
senior independent director on 1 January 2023 and M. L. Smith was appointed a director during the prior year, these changes are reflected in
the information below.
A. Vicary
S. J. Mant
A. N. Jones A. K. Eastgate
M. L. Smith
B. J. Cooke
Average
employee
Salary/fees
9.1%
9.1%
82.4%
13.1%
185.7%
-79.5%
8.6%
Taxable benefits
0.0%
7.1%
0.0%
n/a
n/a
-37.5%
n/a
Performance related bonus
245.7%
151.4%
n/a
n/a
n/a
n/a
1.2%
2022 to 2023
The following table sets out the annual percentage change in remuneration from 2022 to 2023 for each of the directors compared to that of an
average employee. A. N. Jones was appointed chairman on 1 January 2023, with B. J. Cooke standing down, which is reflected below.
A. Vicary
S. J. Mant
B. J. Cooke
A. N. Jones A. K. Eastgate
M. L. Smith
Average
employee
Salary/fees
6.4%
6.5%
-14.1%
30.8%
2.7%
n/a
13.7%
Taxable benefits
0.0%
0.00%
0.0%
n/a
n/a
n/a
n/a
Performance related bonus
32.1%
32.1%
n/a
n/a
n/a
n/a
-21.6%
The performance related bonus reduction for an average employee is a result of a proportion of the bonus being consolidated into guaranteed
pay.
2021 to 2022
The following table sets out the annual percentage change in remuneration from 2021 to 2022 for each of the directors compared to that of an
average employee.
A. Vicary
S. J. Mant
B. J. Cooke
A. N. Jones A. K. Eastgate
Average
employee
Salary/fees
1.4%
1.4%
0.0%
0.0%
0.0%
6.4%
Taxable benefits
0.0%
0.0%
0.0%
n/a
n/a
n/a
Performance related bonus
n/a
n/a
n/a
n/a
n/a
42.4%
32
Castings P.L.C.
Annual Report for the year ended 31 March 2024
Castings P.L.C.
Castings P.L.C.
2020 to 2021
The following table sets out the annual percentage change in remuneration from 2020 to 2021 for each of the directors compared to that of an
average employee.
A. Vicary
S. J. Mant
B. J. Cooke
A. N. Jones A. K. Eastgate
Average
employee
Salary/fees
1.4%
1.4%
0.0%
0.0%
0.0%
2.1%
Taxable benefits
0.0%
0.0%
0.0%
n/a
n/a
n/a
Performance related bonus
-100%
-100%
n/a
n/a
n/a
-30.6%
The performance related bonus reductions were due to the impact of the COVID-19 pandemic on the company during 2021.
Chief executive officer pay ratio
The table below shows the chief executive officer’s pay ratio at 25th, median and 75th percentile of our employees for the year to
31 March 2024. The ratios have been determined using Option A of The Companies (Miscellaneous Reporting) Regulations 2018.
25th percentile
pay ratio
Median pay
ratio
75th percentile
pay ratio
Year ended 31 March 2024
14.7
12.7
10.3
Year ended 31 March 2023
14.0
11.4
9.2
There has not been a significant change in the ratios from 2023 to 2024.
Total shareholder return performance graph
The following graph shows the company’s performance, measured by total shareholder return, compared with the performance of the FTSE All
Share – Industrial Engineering Index, also measured by total shareholder return. This index has been selected for this comparison because this is
considered to be the most relevant index for the company.
Castings P.L.C. TSR performance vs FTSE All Share
Industrials Engineering Index (rebased to 100)
Castings P.L.C.
FTSE All Share Industrial Engineering Index
70
90
110
150
130
170
190
Mar 19
Sep 19
Mar 20
Sep 20
Mar 21
Sep 21
Mar 22
Sep 22
Mar 23
Mar 24
Sep 23
Directors’ Remuneration Report
continued
33
Castings P.L.C.
Annual Report for the year ended 31 March 2024
Strategic Report
Corporate Governance
Statement of Directors’ Responsibilities
in Respect of the Financial Statements
The directors are responsible for preparing
the Annual Report and the financial
statements in accordance with applicable law
and regulation.
Company law requires the directors to
prepare financial statements for each financial
year. Under that law the directors have
prepared the group financial statements in
accordance with UK-adopted international
accounting standards and parent company
financial statements in accordance with
United Kingdom Generally Accepted
Accounting Practice (United Kingdom
Accounting Standards, comprising FRS
101 ‘Reduced Disclosure Framework’, and
applicable law). Under company law the
directors must not approve the financial
statements unless they are satisfied that
they give a true and fair view of the state
of affairs of the group and parent company
and of the profit or loss of the group and
parent company for that period. In preparing
the financial statements, the directors are
required to:
• select suitable accounting policies and
then apply them consistently;
• state whether UK-adopted international
accounting standards have been followed
for the group financial statements and
United Kingdom Accounting Standards,
comprising FRS 101, have been
followed for the parent company financial
statements, subject to any material
departures disclosed and explained in the
financial statements;
• make judgements and accounting
estimates that are reasonable and
prudent; and
• prepare the financial statements on
the going concern basis unless it is
inappropriate to presume that the group
and parent company will continue in
business.
The directors are also responsible for
safeguarding the assets of the group and
parent company and hence for taking
reasonable steps for the prevention and
detection of fraud and other irregularities.
The directors are responsible for keeping
adequate accounting records that are
sufficient to show and explain the group and
parent company’s transactions and disclose
with reasonable accuracy at any time the
financial position of the group and parent
company and enable them to ensure that
the financial statements and the Directors’
Remuneration Report comply with the
Companies Act 2006.
The directors are responsible for the
maintenance and integrity of the parent
company’s website. Legislation in the United
Kingdom governing the preparation and
dissemination of financial statements may
differ from legislation in other jurisdictions.
Directors’ confirmations
The directors consider that the Annual Report
and accounts, taken as a whole, is fair,
balanced and understandable and provides
the information necessary for shareholders
to assess the group and parent company’s
position and performance, business model
and strategy.
Each of the directors, whose names and
functions are listed in Board of Directors on
page 20 confirm that, to the best of their
knowledge:
• the parent company financial statements,
which have been prepared in accordance
with United Kingdom Generally Accepted
Accounting Practice (United Kingdom
Accounting Standards, comprising FRS
101 ‘Reduced Disclosure Framework’,
and applicable law), give a true and fair
view of the assets, liabilities, financial
position and profit of the company;
• the group financial statements, which
have been prepared in accordance with
UK-adopted international accounting
standards, give a true and fair view of the
assets, liabilities, financial position and
profit of the group; and
• the Business and Financial Review
includes a fair review of the development
and performance of the business and the
position of the group and parent company,
together with a description of the principal
risks and uncertainties that it faces.
In the case of each director in office at the
date the Directors’ Report is approved:
• so far as the director is aware, there is
no relevant audit information of which the
group and parent company’s auditor is
unaware; and
• they have taken all the steps that they
ought to have taken as a director in order
to make themselves aware of any relevant
audit information and to establish that the
group and parent company’s auditor is
aware of that information.
Website publication
The directors are responsible for ensuring the
Annual Report and the financial statements
are made available on a website. Financial
statements are published on the company’s
website in accordance with legislation in the
United Kingdom governing the preparation
and dissemination of financial statements,
which may vary from legislation in other
jurisdictions. The maintenance and integrity
of the company’s website is the responsibility
of the directors. The directors’ responsibility
also extends to the ongoing integrity of the
financial statements contained therein.
34
Castings P.L.C.
Annual Report for the year ended 31 March 2024
Castings P.L.C.
Castings P.L.C.
Opinion
We have audited the financial statements of Castings P.L.C. (the
‘parent company’) and its subsidiaries (the ‘group’) for the year
ended 31 March 2024 which comprise Consolidated Statement of
Comprehensive Income, Consolidated Balance Sheet, Consolidated
Cash Flow Statement, Consolidated Statement of Changes in Equity,
Parent Company Balance Sheet, Parent Company Statement of
Changes in Equity and notes to the consolidated and parent company
financial statements, including material accounting policy information.
The financial reporting framework that has been applied in their
preparation is applicable law and UK-adopted international accounting
standards. The parent company financial statements have been
prepared in accordance with United Kingdom Generally Accepted
Accounting Practice (United Kingdom Accounting Standards,
compromising FRS 101 “Reduced Disclosure Framework”) as applied
in accordance with the provisions of the Companies Act 2006.
In our opinion, the financial statements:
•
give a true and fair view of the state of the group’s and of the
parent company’s affairs as at 31 March 2024 and of the group’s
profit for the year then ended;
•
have been properly prepared in accordance with UK-adopted
international accounting standards.
•
as regards the parent company financial statements, have
properly prepared in accordance with United Kingdom Generally
Accepted Accounting Practice (United Kingdom Accounting
Standards, compromising FRS 101 “Reduced Disclosure
Framework; and
•
have been prepared in accordance with the requirements of the
Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on
Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under
those standards are further described in the “Auditor’s responsibilities
for the audit of the financial statements” section of our report. We are
independent of the group and the parent company in accordance
with the ethical requirements that are relevant to our audit of the
financial statements in the UK, including the FRC’s Ethical Standard as
applied to public interest entities and we have fulfilled our other ethical
responsibilities in accordance with these requirements. We believe that
the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the
directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate.
Our audit procedures to evaluate the directors’ assessment of the
group’s and the parent company’s ability to continue to adopt the
going concern basis of accounting included, but were not limited to:
•
Undertaking an initial assessment at the planning stage of the
audit to identify events or conditions that may cast significant
doubt on the group’s and the parent company’s ability to continue
as a going concern;
•
Obtaining an understanding of the relevant controls relating to the
directors’ going concern assessment;
•
Making enquiries of the directors to understand the period
of assessment considered by them, the assumptions they
considered and the implication of those assumptions when
assessing the group’s and the parent company’s future financial
performance;
•
Challenging the appropriateness of the directors’ key assumptions
in their cash flow forecasts, described in note 1, by reviewing
supporting and contradictory evidence in relation to these key
assumptions and assessing the directors’ consideration of severe
but plausible scenarios. This included assessing the viability of
mitigating actions within the directors’ control;
•
Testing the accuracy and functionality of the model used to
prepare the directors’ forecasts;
•
Assessing the historical accuracy of forecasts prepared by the
directors;
•
Assessing and challenging key assumptions and mitigating
actions put in place in response to the issues most relevant to this
assessment which include rising energy costs, inflation, customer
demand and the supply of materials and labour;
•
Considering the consistency of the directors’ forecasts with other
areas of the financial statements and our audit; and
•
Evaluating the appropriateness of the directors’ disclosures in the
financial statements on going concern
Based on the work we have performed, we have not identified any
material uncertainties relating to events or conditions that, individually
or collectively, may cast significant doubt on the group’s and the
parent company’s ability to continue as a going concern for a period
of at least twelve months from when the financial statements are
authorised for issue.
Our responsibilities and the responsibilities of the directors with
respect to going concern are described in the relevant sections of this
report.
In relation to Castings P.L.C.’s reporting on how it has applied the UK
Corporate Governance Code, we have nothing material to add or
draw attention to in relation to the directors’ statement in the financial
statements about whether the director’s considered it appropriate to
adopt the going concern basis of accounting.
Key audit matters
Key audit matters are those matters that, in our professional
judgement, were of most significance in our audit of the financial
statements of the current period and include the most significant
assessed risks of material misstatement (whether or not due to fraud)
we identified, including those which had the greatest effect on: the
overall audit strategy; the allocation of resources in the audit; and
directing the efforts of the engagement team. These matters were
addressed in the context of our audit of the financial statements as a
whole, and in forming our opinion thereon, and we do not provide a
separate opinion on these matters.
We summarise below the key audit matters in forming our opinion
above, together with an overview of the principal audit procedures
performed to address each matter and our key observations arising
from those procedures.
These matters, together with our findings, were communicated to
those charged with governance through our Audit Completion Report.
Independent Auditor’s Report
to the Members of Castings P.L.C.
35
Castings P.L.C.
Annual Report for the year ended 31 March 2024
Strategic Report
Corporate Governance
Key Audit Matter
How our scope addressed this matter
Revenue Recognition
The group’s and the parent company’s accounting policy for revenue
recognition is set out in the accounting policy notes on pages 44
and 63 respectively.
Revenue is material for the group and the parent company and
represents the largest figure in the Consolidated Statement of
Comprehensive Income. An error in this balance could significantly
affect a user’s interpretation of the financial statements.
As a result, we identified revenue recognition for the cut-off assertion
(where revenue may be manipulated close to the year end to record
revenue in the incorrect financial period) as a key audit matter.
Our audit procedures included, but were not limited to, the following:
•
Reviewing key controls relating to revenue recognition and
performing a walkthrough to evaluate their design and
implementation;
•
Reviewing managements cut off assessment and substantively
testing any accrued or deferred income recognised at the year
end;
•
Performing substantive tests on the full reconciliation management
prepare from the order system to the financial reporting system to
ensure the revenue recognised is complete;
•
Selecting a sample of transactions close to the year-end and
post year end to verify that they had been posted to the correct
financial period in line with the agreed INCO terms.
Key observations
Based on the procedures performed, we did not identify any material
misstatements in relation to revenue recognition.
Our application of materiality and an overview of the scope of our audit
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality. These, together
with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures on
the individual financial statement line items and disclosures and in evaluating the effect of misstatements, both individually and on the financial
statements as a whole. Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Group materiality
Overall materiality
£1,795k
How we determined it
0.8% of Revenue
Rationale for benchmark applied
We consider revenue to be the most appropriate benchmark for selecting materiality for the following
reasons:
- Revenue is a significant KPI for the business with the financial statements demonstrating the
significant focus on revenue.
- Revenue has increased from prior year with a consistent volume as energy costs incurred are being
passed to Customers via amendments in contractual terms thus price increases. The result of the
price increases is being seen in revenue.
The profit before tax balance in prior years has been volatile and therefore not an appropriate
reflection of the group’s performance therefore Revenue has been used as the benchmark in previous
years.
Revenue is considered appropriate for 2024 to ensure the benchmark used is consistent with
prior years however we have reduced the percentage to 0.8% to ensure the overall value remains
appropriate for the listed environment.
Performance materiality
Performance materiality is set to reduce to an appropriately low level the probability that the
aggregate of uncorrected and undetected misstatements in the financial statements exceeds
materiality for the financial statements as a whole.
We set performance materiality at £1,256k which represents 70% of overall materiality.
Reporting threshold
We agreed with the directors that we would report to them misstatements identified during our audit
above £53k as well as misstatements below that amount that, in our view, warranted reporting for
qualitative reasons.
36
Castings P.L.C.
Annual Report for the year ended 31 March 2024
Castings P.L.C.
Castings P.L.C.
Parent company materiality
Overall materiality
£1,317k
How we determined it
0.8% of Revenue
Rationale for benchmark applied
We consider revenue to be the most appropriate benchmark for selecting materiality for the following
reasons:
- Revenue is a significant KPI for the business with the financial statements demonstrating the
significant focus on revenue.
- Revenue has increased from prior year with a consistent volume as energy costs incurred are being
passed to Customers via amendments in contractual terms thus price increases. The result of the
price increases is being seen in revenue.
The profit before tax balance in prior years has been volatile and therefore not an appropriate
reflection of the company’s performance therefore Revenue has been used as the benchmark in
previous years.
Revenue is considered appropriate for 2024 to ensure the benchmark used is consistent with
prior years however we have reduced the percentage to 0.8% to ensure the overall value remains
appropriate for the listed environment.
Performance materiality
Performance materiality is set to reduce to an appropriately low level the probability that the
aggregate of uncorrected and undetected misstatements in the financial statements exceeds
materiality for the financial statements as a whole.
We set performance materiality at £922k, which represents 70% of overall materiality.
Reporting threshold
We agreed with the directors that we would report to them misstatements identified during our audit
above £39k, as well as misstatements below that amount that, in our view, warranted reporting for
qualitative reasons.
As part of designing our audit, we assessed the risk of material misstatement in the financial statements, whether due to fraud or error, and then
designed and performed audit procedures responsive to those risks. In particular, we looked at where the directors made subjective judgements,
such as assumptions on significant accounting estimates.
We tailored the scope of our audit to ensure that we performed sufficient work to be able to give an opinion on the financial statements as a
whole. We used the outputs of our risk assessment, our understanding of the group and the parent company, their environment, controls, and
critical business processes, to consider qualitative factors to ensure that we obtained sufficient coverage across all financial statement line items.
Our group audit scope included an audit of the group and the parent company financial statements. Based on our risk assessment, all
components of the group, including the parent company, were subject to full scope audit performed by the group audit team.
At the parent company level, the group audit team also tested the consolidation process and carried out analytical procedures to confirm our
conclusion that there were no significant risks of material misstatement of the aggregated financial information.
Other information
The other information comprises the information included in the annual report other than the financial statements and our auditor’s report
thereon. The directors are responsible for the other information. Our opinion on the financial statements does not cover the other information
and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the
financial statements or our knowledge obtained in the course of audit or otherwise appears to be materially misstated. If we identify such
material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in
the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact.
We have nothing to report in this regard.
Independent Auditor’s Report
to the Members of Castings P.L.C.
continued
37
Castings P.L.C.
Annual Report for the year ended 31 March 2024
Strategic Report
Corporate Governance
Opinions on other matters prescribed by the
Companies Act 2006
In our opinion, the part of the directors’ remuneration report to be
audited has been properly prepared in accordance with the Companies
Act 2006.
In our opinion, based on the work undertaken in the course of the
audit:
•
the information given in the strategic report and the directors’
report for the financial year for which the financial statements are
prepared is consistent with the financial statements and those
reports have been prepared in accordance with applicable legal
requirements;
•
the information about internal control and risk management
systems in relation to financial reporting processes and about
share capital structures, given in compliance with rules 7.2.5
and 7.2.6 in the Disclosure Guidance and Transparency Rules
sourcebook made by the Financial Conduct Authority (the FCA
Rules), is consistent with the financial statements and has been
prepared in accordance with applicable legal requirements; and
•
information about the parent company’s corporate governance
code and practices and about its administrative, management
and supervisory bodies and their committees complies with rules
7.2.2, 7.2.3 and 7.2.7 of the FCA Rules.
Matters on which we are required to report by
exception
In light of the knowledge and understanding of the group and the
parent company and their environment obtained in the course of the
audit, we have not identified material misstatements in the:
•
strategic report or the directors’ report; or
•
information about internal control and risk management systems
in relation to financial reporting processes and about share capital
structures, given in compliance with rules 7.2.5 and 7.2.6 of the
FCA Rules.
We have nothing to report in respect of the following matters in
relation to which the Companies Act 2006 requires us to report to you
if, in our opinion:
•
adequate accounting records have not been kept by the parent
company, or returns adequate for our audit have not been
received from branches not visited by us; or
•
the parent company financial statements and the part of the
directors’ remuneration report to be audited are not in agreement
with the accounting records and returns; or
•
certain disclosures of directors’ remuneration specified by law are
not made; or
•
we have not received all the information and explanations we
require for our audit; or
•
a corporate governance statement has not been prepared by the
parent company.
Corporate governance statement
The Listing Rules require us to review the directors’ statement in
relation to going concern, longer-term viability and that part of the
Corporate Governance Statement relating to Castings P.L.C.’s
compliance with the provisions of the UK Corporate Governance
Statement specified for our review.
Based on the work undertaken as part of our audit, we have
concluded that each of the following elements of the Corporate
Governance Statement is materially consistent with the financial
statements or our knowledge obtained during the audit:
•
Directors’ statement with regards the appropriateness of
adopting the going concern basis of accounting and any material
uncertainties identified, set out on page 25;
•
Directors’ explanation as to its assessment of the entity’s
prospects, the period this assessment covers and why they
period is appropriate, set out on page 18;
•
Directors’ statement on fair, balanced and understandable, set
out on page 23;
•
Board’s confirmation that it has carried out a robust assessment
of the emerging and principal risks, set out on page 8;
•
The section of the annual report that describes the review of
effectiveness of risk management and internal control systems,
set out on page 25; and
•
The section describing the work of the audit committee, set out
on page 26.
Responsibilities of Directors
As explained more fully in the directors’ responsibilities statement set
out on page 33, the directors are responsible for the preparation of
the financial statements and for being satisfied that they give a true
and fair view, and for such internal control as the directors determine
is necessary to enable the preparation of financial statements that are
free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for
assessing the group’s and the parent company’s ability to continue as
a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the
directors either intend to liquidate the group or the parent company or
to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the
financial statements
Our objectives are to obtain reasonable assurance about whether the
financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditor’s report
that includes our opinion. Reasonable assurance is a high level
of assurance but is not a guarantee that an audit conducted in
accordance with ISAs (UK) will always detect a material misstatement
when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users
taken on the basis of these financial statements.
The extent to which our procedures are capable of detecting
irregularities, including fraud is detailed below.
38
Castings P.L.C.
Annual Report for the year ended 31 March 2024
Castings P.L.C.
Castings P.L.C.
Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements in
respect of irregularities, including fraud.
Based on our understanding of the group and the parent company
and their industry, we considered that non-compliance with the
following laws and regulations might have a material effect on the
financial statements: employment regulation, health and safety
regulation.
To help us identify instances of non-compliance with these laws and
regulations, and in identifying and assessing the risks of material
misstatement in respect to non-compliance, our procedures included,
but were not limited to:
•
Gaining an understanding of the legal and regulatory framework
applicable to the group and the parent company, the industry
in which they operate, and the structure of the group, and
considering the risk of acts by the group and the parent company
which were contrary to the applicable laws and regulations,
including fraud;
•
Inquiring of the directors, management and, where appropriate,
those charged with governance, as to whether the group and the
parent company is in compliance with laws and regulations, and
discussing their policies and procedures regarding compliance
with laws and regulations;
•
Reviewing minutes of directors’ meetings in the year; and
•
Discussing amongst the engagement team the laws and
regulations listed above, and remaining alert to any indications of
non-compliance.
We also considered those laws and regulations that have a direct
effect on the preparation of the financial statements, such as: tax
legislation, pension legislation, the Companies Act 2006.
In addition, we evaluated the directors’ and management’s incentives
and opportunities for fraudulent manipulation of the financial
statements, including the risk of management override of controls, and
determined that the principal risks related to posting manual journal
entries to manipulate financial performance, management bias through
judgements and assumptions in significant accounting estimates,
revenue recognition (which we pinpointed to the cut off assertion) and
significant one-off or unusual transactions.
Our procedures in relation to fraud included but were not limited to:
•
Making enquiries of the directors and management on whether
they had knowledge of any actual, suspected or alleged fraud;
•
Gaining an understanding of the internal controls established to
mitigate risks related to fraud;
•
Discussing amongst the engagement team the risks of fraud;
•
Addressing the risks of fraud through management override of
controls by performing journal entry testing and audit work over
key estimates & judgements;
•
Reviewing Directors and Key Managements bonus scheme and
the performance conditions attached to the bonus;
The primary responsibility for the prevention and detection of
irregularities, including fraud, rests with both those charged with
governance and management. As with any audit, there remained a
risk of non-detection of irregularities, as these may involve collusion,
forgery, intentional omissions, misrepresentations or the override of
internal controls.
The risks of material misstatement that had the greatest effect on our
audit are discussed in the “Key audit matters” section of this report.
A further description of our responsibilities is available on the Financial
Reporting Council’s website at www.frc.org.uk/auditorsresponsibilities.
This description forms part of our auditor’s report.
Other matters which we are required to address
Following the recommendation of the audit committee, we were
appointed by the Audit and Risk Committee on 8 January 2020 to
audit the financial statements for the year ending 31 March 2020
and subsequent financial periods. The period of total uninterrupted
engagement is 5 years, covering the years ending 31 March 2020 to
31 March 2024.
The non-audit services prohibited by the FRC’s Ethical Standard were
not provided to the group or the parent company and we remain
independent of the group and the parent company in conducting our
audit.
Our audit opinion is consistent with our additional report to the audit
committee.
Use of the audit report
This report is made solely to the company’s members as a body in
accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the
company’s members those matters we are required to state to them
in an auditor’s 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 and the company’s members as a
body for our audit work, for this report, or for the opinions we have
formed.
As required by the Financial Conduct Authority Disclosure Guidance
and Transparency Rules, these financial statements will form part
of the electronic reporting format prepared annual financial report
filed on the National Storage Mechanism of the Financial Conduct
Authority. This auditor’s report provides no assurance over whether the
annual financial report has been prepared using the correct electronic
reporting format.
Louis Burns (Senior Statutory Auditor)
for and on behalf of Forvis Mazars LLP
Chartered Accountants and Statutory Auditor
Two Chamberlain Square
Birmingham
B3 3AX
12 June 2024
Independent Auditor’s Report
to the Members of Castings P.L.C.
continued
39
Castings P.L.C.
Annual Report for the year ended 31 March 2024
Strategic Report
Financial Statements
Consolidated Statement of Comprehensive Income
for the year ended 31 March 2024
Notes
2024
£000
2023
£000
Revenue
2
224,414
200,990
Cost of sales
3
(181,124)
(162,077)
Gross profit
43,290
38,913
Distribution costs
3
(4,694)
(5,440)
Administrative expenses
3
(18,837)
(17,104)
Profit from operations
19,759
16,369
Finance income
6
1,527
344
Profit before income tax
21,286
16,713
Income tax expense
7
(4,565)
(2,923)
Profit for the year attributable to equity holders of the parent company
16,721
13,790
Profit for the year attributable to equity holders of the parent company
16,721
13,790
Other comprehensive income for the year:
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
5
112
117
112
117
Items that may be reclassified subsequently to profit and loss:
Change in fair value of financial assets
—
(40)
Tax effect of items that may be reclassified
—
10
—
(30)
Other comprehensive income for the year (net of tax)
112
87
Total comprehensive income for the year attributable to the equity holders
of the parent company
16,833
13,877
Earnings per share attributable to the equity holders of the parent company
9
Basic
38.45p
31.66p
Diluted
38.32p
31.58p
Notes to the consolidated financial statements are on pages 43 to 59.
40
Castings P.L.C.
Annual Report for the year ended 31 March 2024
Castings P.L.C.
Castings P.L.C.
Consolidated Balance Sheet
as at 31 March 2024
Notes
2024
£000
2023
£000
ASSETS
Non-current assets
Property, plant and equipment
10
61,799
60,353
Financial assets
11
—
356
61,799
60,709
Current assets
Inventories
12
33,136
26,095
Trade and other receivables
13
46,593
51,080
Current tax asset
—
980
Cash and cash equivalents
32,527
35,566
112,256
113,721
Total assets
174,055
174,430
LIABILITIES
Current liabilities
Trade and other payables
14
33,329
37,051
Current tax liabilities
706
—
34,035
37,051
Non-current liabilities
Deferred tax liabilities
15
6,030
5,719
Total liabilities
40,065
42,770
Net assets
133,990
131,660
Equity attributable to equity holders of the parent company
Share capital
16
4,363
4,363
Share premium account
874
874
Treasury shares
(627)
(231)
Other reserve
13
13
Retained earnings
129,367
126,641
Total equity
133,990
131,660
The consolidated financial statements on pages 39 to 59 were approved and authorised for issue by the board of directors on 12 June 2024,
and were signed on its behalf by:
A. N. Jones
Chairman
S. J. Mant
Finance Director
Notes to the consolidated financial statements are on pages 43 to 59.
Company registration number – 91580.
41
Castings P.L.C.
Annual Report for the year ended 31 March 2024
Strategic Report
Financial Statements
Consolidated Cash Flow Statement
for the year ended 31 March 2024
Notes
2024
£000
2023
£000
Cash flows from operating activities
Profit before income tax
21,286
16,713
Adjustments for:
Depreciation
10
8,851
8,646
Loss on disposal of property, plant and equipment
3
25
—
Finance income
6
(1,527)
(344)
Equity-settled share-based payment expense
17
102
119
Pension administrative costs
5
112
117
Operating cash flow before changes in working capital
28,849
25,251
Increase in inventories
(7,041)
(206)
Decrease/(increase) in receivables
4,486
(11,200)
(Decrease)/increase in payables
(4,651)
8,574
Cash generated from operating activities
21,643
22,419
Tax paid
(2,568)
(2,904)
Interest received
6
1,474
327
Net cash generated from operating activities
20,549
19,842
Cash flows from investing activities
Dividends received from listed investments
6
12
17
Purchase of property, plant and equipment
(9,584)
(6,198)
Proceeds from disposal of property, plant and equipment
191
—
Proceeds from sale of financial assets
397
—
Repayments from pension schemes
5
2,120
2,114
Advances on behalf of the pension schemes
5
(2,119)
(2,120)
Net cash used in investing activities
(8,983)
(6,187)
Cash flows from financing activities
Dividends paid to shareholders
8
(14,209)
(13,682)
Purchase of own shares
(396)
(152)
Net cash used in financing activities
(14,605)
(13,834)
Decrease in cash and cash equivalents
(3,039)
(179)
Cash and cash equivalents at beginning of year
35,566
35,745
Cash and cash equivalents at end of year
20
32,527
35,566
Cash and cash equivalents:
Short-term deposits
13,230
19,993
Cash available on demand
19,297
15,573
32,527
35,566
Notes to the consolidated financial statements are on pages 43 to 59.
42
Castings P.L.C.
Annual Report for the year ended 31 March 2024
Castings P.L.C.
Castings P.L.C.
Consolidated Statement of Changes in Equity
for the year ended 31 March 2024
Equity attributable to equity holders of the parent
Share
capitala)
£000
Share
premiumb)
£000
Treasury
sharesc)
£000
Other
reserved)
£000
Retained
earningse)
£000
Total
equity
£000
At 1 April 2023
4,363
874
(231)
13
126,641
131,660
Profit for the year
—
—
—
—
16,721
16,721
Other comprehensive income/(losses):
Movement in unrecognised surplus on defined benefit
pension schemes net of actuarial gains and losses
—
—
—
—
112
112
Tax effect of items taken directly to reserves
—
—
—
—
—
—
Total comprehensive income for the year
—
—
—
—
16,833
16,833
Shares acquired in the year
—
—
(396)
—
—
(396)
Equity-settled share-based payments (see note 17)
—
—
—
—
102
102
Dividends (see note 8)
—
—
—
—
(14,209)
(14,209)
At 31 March 2024
4,363
874
(627)
13
129,367
133,990
Equity attributable to equity holders of the parent
Share
capitala)
£000
Share
premiumb)
£000
Treasury
sharesc)
£000
Other
reserved)
£000
Retained
earningse)
£000
Total
equity
£000
At 1 April 2022
4,363
874
(79)
13
126,327
131,498
Profit for the year
—
—
—
—
13,790
13,790
Other comprehensive income/(losses):
Movement in unrecognised surplus on defined benefit
pension schemes net of actuarial gains and losses
—
—
—
—
117
117
Change in fair value of financial assets
—
—
—
—
(40)
(40)
Tax effect of items taken directly to reserves
—
—
—
—
10
10
Total comprehensive income for the year
—
—
—
—
13,877
13,877
Shares acquired in the year
—
—
(152)
—
—
(152)
Equity-settled share-based payments (see note 17)
—
—
—
—
119
119
Dividends (see note 8)
—
—
—
—
(13,682)
(13,682)
At 31 March 2023
4,363
874
(231)
13
126,641
131,660
a) Share capital (note 16) – The nominal value of allotted and fully paid up ordinary share capital in issue.
b) Share premium – Amount subscribed for share capital in excess of nominal value.
c) Treasury shares – Value of shares acquired by the company.
d) Other reserve – Amounts transferred from share capital on redemption of issued shares.
e) Retained earnings – Cumulative net gains and losses recognised in the statement of comprehensive income.
43
Castings P.L.C.
Annual Report for the year ended 31 March 2024
Strategic Report
Financial Statements
Notes to the Consolidated Financial Statements
1 Accounting policies
General information
Castings Public Limited Company (the ‘company’, ‘Castings P.L.C.’) is incorporated and domiciled in the United Kingdom and registered in
England as a public company limited by shares. The company’s registered office is at Lichfield Road, Brownhills, West Midlands, WS8 6JZ,
United Kingdom. The company’s ordinary shares are traded on the London Stock Exchange’s Regulated Market (Premium Listing). There has
been no change in this information since the Annual Report for the year ended 31 March 2023.
Basis of preparation
The group financial statements have been prepared in accordance with UK-adopted international accounting standard in conformity with the
requirements of the Companies Act 2006.
The IFRSs applied in the group financial statements are subject to ongoing amendment by the IASB and therefore subject to possible change
in the future. Further standards and interpretations may be issued that will be applicable for financial years beginning on or after 1 April 2024 or
later accounting periods but may be adopted early.
The preparation of financial statements in accordance with IFRS requires the use of certain accounting estimates. It also requires management
to exercise its judgement in the process of applying the group’s accounting policies.
The primary statements within the financial information contained in this document have been presented in accordance with IAS 1 Presentation
of Financial Statements.
The financial statements are prepared on a going concern basis and under the historical cost convention, except where adjusted for revaluations
of certain assets, and in accordance with applicable Accounting Standards and those parts of the Companies Act 2006 applicable to companies
reporting under IFRS. A summary of the principal group IFRS accounting policies is set out below. The presentation currency used is sterling and
the amounts have been presented in round thousands (‘£000’).
New standards effective and adopted by the group in the year
There have been no new standards, or amendments to standards, applied in the year that had a material effect on the group.
Going concern
In determining the basis of preparation for the consolidated financial statements, the directors have considered the group’s business activities,
together with factors likely to affect its future development, performance and position. The group has modelled a base case, which reflects
the directors’ current expectations of future trading in addition to potential severe but plausible impacts on revenue, profits and cash flows in a
downside scenario. The base case scenario is based on current demand schedules from customers and assumed that these levels, along with
average selling prices and costs remain consistent. The group’s recent record of cash conversion was used to estimate the cash generation in
the period under review.
The severe but plausible downside scenario assumed a 30% reduction in demand which would cover the loss of the group’s most significant
customer. Furthermore, such a reduction is also in line with the approximate revenue loss in the event that environmental legislation changes or a
technological breakthrough rendered the internal combustion engine obsolete.
The directors are confident that the group will have sufficient funds to continue to meet their liabilities as they fall due for at least twelve months
from the date of approval of the financial statements and therefore have prepared the financial statements on a going concern basis. Further
details are set out in the viability statement on page 18 and the corporate governance statement on page 25.
Basis of consolidation
The consolidated statement of comprehensive income and balance sheet include the financial statements of the parent company and its
subsidiaries made up to the end of the financial year. These subsidiaries include William Lee Limited and CNC Speedwell Limited, both of which
are 100% owned, controlled by the company and are based in the UK. Control is achieved where the company has the power to govern the
financial and operating policies of an investee entity so as to obtain benefits from its activities. Intercompany transactions and balances between
group companies are eliminated in full.
Business combinations and goodwill
Shares issued as consideration for the acquisition of companies have a fair value attributed to them, which is normally their market value at the
date of acquisition. Net assets acquired are consolidated at a fair value to the group at the date of acquisition. All changes to these assets and
liabilities, and the resulting gains and losses that arise after the group has gained control of the subsidiary, are credited and charged to the post-
acquisition income statement.
44
Castings P.L.C.
Annual Report for the year ended 31 March 2024
Castings P.L.C.
Castings P.L.C.
1 Accounting policies continued
Revenue recognition
Revenue is measured at the fair value of consideration received or receivable and represents amounts receivable for goods and services
provided in the normal course of business, net of VAT and other sales-related taxes. Revenue from the sale of goods relates to the sale of
castings. Revenue from the sale of services relates to machining and minor assembly work performed on a subcontract basis for external
customers. Revenue is recognised once the performance obligation has been met. This is deemed to be when the goods and services have
been collected by, or delivered to, the customer in accordance with the agreed delivery terms. Payment terms are based on usual market
practices and commercial terms agreed with the customer.
Post-retirement benefits
Two of the group’s pension plans are of a defined benefit type. Under IAS 19 Employee Benefits the employer’s portion of the current service
costs and curtailment gains are charged to operating profit for these plans, with the net interest also being charged/credited to operating
profit subject to the asset ceiling. Actuarial gains and losses are recognised in other comprehensive income and the balance sheet reflects the
schemes’ surplus or deficit at the balance sheet date. A full valuation is carried out triennially using the projected unit credit method. Where the
group cannot benefit from a scheme surplus in the form of refunds from the plans or reductions in future contributions, any asset resulting from
the above policy is restricted accordingly.
Payments to the defined contribution scheme are charged to the consolidated statement of comprehensive income as they become payable.
Property, plant and equipment
Property, plant and equipment assets are held at cost less accumulated depreciation. Depreciation is provided on property, plant and equipment,
other than freehold land and assets in the course of construction, on a straight-line basis. The periods of write-off used are as follows:
i. Freehold buildings over 50 years.
ii. Plant and equipment over a period of 3 to 15 years.
The group annually reviews the assessment of residual values and useful lives in accordance with IAS 16.
Impairment of property, plant and equipment
At each balance sheet date, the group reviews the carrying amounts of its tangible assets to determine whether there is any indication that
those assets have suffered an impairment loss. If any such indication exists or an asset is not in use and therefore requires an annual test, the
recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where the asset does not generate
cash inflows that are largely independent from other assets, the group estimates the recoverable amount of the cash generating unit to which
the asset belongs.
Recoverable amount is the higher of fair value less costs to dispose and value-in-use. In assessing value-in-use, the estimated future nominal
cash flows are discounted to their present value using a nominal discount rate that reflects current market assessments of the time value of
money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset
(cash generating unit) is reduced to its recoverable amount. An impairment loss is recognised as an expense immediately in the consolidated
income statement.
Inventories
The group’s inventories are valued at the lower of cost on a first-in, first-out basis and net realisable value. Cost includes a proportion of
production overheads based on normal levels of activity. Provision is made for obsolete and slow-moving items based on a review of parts with
no demand during the year.
Cash and cash equivalents
Cash and cash equivalents includes cash in hand, deposits at call with banks and other short-term highly liquid investments with original
maturities of three months or less from inception.
Foreign currencies
Assets and liabilities in foreign currencies are translated at the spot rates of exchange ruling at the balance sheet date. Transactions in foreign
currencies are recorded at the rate ruling at the date of the transaction; all differences are dealt with through the consolidated statement of
comprehensive income.
Notes to the Consolidated Financial Statements
continued
45
Castings P.L.C.
Annual Report for the year ended 31 March 2024
Strategic Report
Financial Statements
1 Accounting policies continued
Financial instruments
a) Financial assets
The group classifies its financial assets into one of the categories discussed below, depending on the purpose for which the asset was acquired.
The group’s accounting policy for each category is as follows:
Fair value through profit and loss
Fair value through profit and loss financial assets comprise the group’s strategic investments in entities not qualifying as subsidiaries. They are
carried at fair value with changes in fair value recognised in the income statement. The cumulative fair value gains and losses are held within
retained earnings and are not treated as distributable. This treatment is considered more appropriate than in the prior year when the investments
were treated as fair value through other comprehensive income. The impact of this change is not material to the current or prior year financial
statements. Fair value is determined with reference to published quoted prices in an active market. The dividend income from listed investments
is presented within finance income.
Amortised cost
These assets are held in order to collect contractual cash flows, on specific dates, which are solely payments of the principal and interest on
the principal amount outstanding. They arise principally through the provision of goods and services to customers (e.g. trade receivables) and
deposits held at banks and building societies, but may also incorporate other types of contractual monetary asset. They are initially recognised
at fair value plus transaction costs that are directly attributable to the acquisition or issue and subsequently carried at amortised cost using the
effective interest rate method, less provision for impairment.
Impairment provisions for trade receivables are recognised based on the simplified approach within IFRS 9 using the lifetime expected credit
losses. During this process the probability of the non-payment of the trade receivables is assessed. Where specific receivables are known to
be ‘bad’ or it becomes apparent that payment is ‘doubtful’ then a credit loss allowance of 100% is applied. Such provisions are recorded in
a separate allowance account with the loss being recognised within administrative expenses in the consolidated statement of comprehensive
income. On confirmation that the deposit or receivable will not be collectable, the gross carrying value of the asset is written off against the
associated provision.
b) Financial liabilities
The group classifies its financial liabilities into liabilities measured at fair value on recognition and subsequently at amortised cost. Although the
group uses derivative financial instruments in economic hedges of currency risk, it does not hedge account for these transactions, and the
amounts are not material. These derivative financial instruments are accounted for at fair value through the consolidated statement of income
where material to the financial statements.
Unless otherwise indicated, the carrying amounts of the group’s financial liabilities are a reasonable approximation of their fair values.
Financial liabilities measured at amortised cost
Financial liabilities include trade payables and other short-term monetary liabilities, which are initially recognised at fair value and subsequently
carried at amortised cost using the effective interest method.
Fair value is calculated by discounting estimated future cash flows using a market rate of interest.
c) Share capital
The group’s ordinary shares are classified as equity instruments. Share capital includes the nominal value of the shares and any share premium
attaching to the shares.
Current and deferred tax
Deferred tax is provided using the liability method. Deferred income tax assets are recognised to the extent that it is probable that future taxable
profit will be available against which the temporary differences can be utilised.
Deferred tax is measured at the actual tax rates that are expected to apply in the periods in which the temporary differences are expected to
reverse, based on tax rates and laws that have been enacted or substantively enacted by the balance sheet date.
Current tax is provided for on the taxable profits of each company in the group, using current tax rates and legislation that has been enacted or
substantively enacted by the balance sheet date.
Share-based payments
The cost of equity-settled transactions with employees of the company is measured by reference to the fair value at the date at which they
are granted using the Black-Scholes model, taking into the account the two year holding period at the end of the vesting period. The cost is
recognised as an expense over the vesting period, which ends on the date on which the relevant employees become fully entitled to the award.
46
Castings P.L.C.
Annual Report for the year ended 31 March 2024
Castings P.L.C.
Castings P.L.C.
1 Accounting policies continued
Share-based payments continued
The amount recognised as an expense is adjusted to reflect the actual number of awards for which the related service conditions are met, such that
the amount ultimately recognised as an expense is based on the number of awards that meet the related service conditions at the vesting date.
Dividends
Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends
are only recognised when approved by the shareholders at the Annual General Meeting.
Finance income and expense
Finance income and expense is recognised in the consolidated statement of comprehensive income as it accrues.
Standards, interpretations and amendments to published standards that are not yet effective
There are no significant IFRSs or IFRIC interpretations that are not yet effective that would be expected to have a material impact on the group.
Material accounting estimates and judgements
The group makes certain estimates and judgements regarding the future. Estimates and judgements are continually evaluated based on
historical experience and other factors, including expectation of future events that are believed to be reasonable under the circumstances. In the
future, actual experience may differ from these estimates and judgements. The estimates and judgements that have a significant risk of causing
a material adjustment to the carrying amounts of assets and liabilities within the next financial year are set out below:
Estimates
Pension assumptions
The costs, assets and liabilities of the defined benefit pension schemes operated by the group are determined using methods relying on actuarial
estimates and assumptions. Whilst this is a source of estimation uncertainty for the group, the scheme surplus is not recognised on the balance
sheet (as set out below). Details of the key assumptions are set out in note 5.
Judgements
Useful economic lives of property, plant and equipment
The assessment of useful economic lives and residual values of property, plant and equipment.
Pension surplus
In line with previous years, the group continues to take the decision not to recognise the asset is relation to the surplus on the defined benefit
pension scheme, as set out in note 5.
2 Operating segments
For internal decision-making purposes, the group is organised into three operating companies which are considered to be the operating
segments of the group: Castings P.L.C. and William Lee Limited are aggregated into Foundry operations, due to the similar nature of the
businesses, 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 in the year to 31 March 2024:
Foundry
operations
£000
Machining
operations
£000
Elimination
£000
Total
£000
Revenue from external customers
222,542
1,872
—
224,414
Inter-segmental revenue
28,433
35,774
(64,207)
—
Segmental result
16,184
3,719
(32)
19,871
Unallocated costs:
Defined benefit pension cost
(112)
Finance income
1,527
Profit before income tax
21,286
Total assets
156,605
30,822
(13,372)
174,055
Non-current asset additions
5,179
5,334
—
10,513
Depreciation
5,069
3,782
—
8,851
Total liabilities
(40,424)
(7,719)
8,078
(40,065)
All non-current assets are based in the United Kingdom.
Notes to the Consolidated Financial Statements
continued
47
Castings P.L.C.
Annual Report for the year ended 31 March 2024
Strategic Report
Financial Statements
The following shows the revenues, results and total assets by reportable segment in the year to 31 March 2023:
Foundry
operations
£000
Machining
operations
£000
Elimination
£000
Total
£000
Revenue from external customers
198,972
2,018
—
200,990
Inter-segmental revenue
24,739
25,640
(50,379)
—
Segmental result
16,332
169
(15)
16,486
Unallocated costs:
Defined benefit pension cost
(117)
Finance income
344
Profit before income tax
16,713
Total assets
162,671
26,687
(14,928)
174,430
Non-current asset additions
4,826
1,372
—
6,198
Depreciation
5,235
3,411
—
8,646
Total liabilities
(45,668)
(6,759)
9,657
(42,770)
All non-current assets are based in the United Kingdom.
2024
£000
2023
£000
The geographical analysis of revenues by destination for the year is as follows:
United Kingdom
34,296
34,519
Sweden
63,814
55,107
Germany
36,926
32,292
Netherlands
35,400
31,763
Rest of Europe
35,889
31,810
North and South America
16,927
14,322
Other
1,162
1,177
224,414
200,990
All revenue arises in the United Kingdom from the group’s continuing activities.
Information about major customers
Included in revenues arising from Foundry operations are revenues of approximately £60,147,000, £36,918,000 and £24,339,000 from three
ultimate customer groups (2023 – £49,835,000, £29,374,000 and £22,229,000 respectively).
3 Net operating costs
2024
£000
2023
£000
Raw materials and consumables
50,358
53,092
Staff costs (note 4)
63,256
56,517
Depreciation of property, plant and equipment
8,851
8,646
Light, heat and power
39,284
25,937
Sub-contract processing
20,282
18,096
Carriage
4,694
5,440
Repairs and maintenance
8,943
7,735
Rates and insurance
2,313
1,764
Loss on disposal of property, plant and equipment
25
—
Other costs
6,649
7,394
Total cost of sales, distribution costs and administrative expenses
204,655
184,621
48
Castings P.L.C.
Annual Report for the year ended 31 March 2024
Castings P.L.C.
Castings P.L.C.
3 Net operating costs continued
During the year the group obtained the following services from the company’s auditor:
2024
£000
2023
£000
Fees payable to the company’s auditor for the audit of the parent company and group financial statements
82
76
Fees payable to the company’s auditor for other services – the audit of the company’s subsidiaries
57
54
4 Employee information
2024
2023
Average monthly number of employees during the year was:
Production
1,120
1,074
Management and administration
121
128
1,241
1,202
2024
£000
2023
£000
Staff costs (including directors) comprise:
Wages and salaries
55,412
49,277
Social security costs
5,967
5,530
Other pension costs – defined contribution plans
1,765
1,593
Other pension costs – defined benefit plans (note 5)
112
117
63,256
56,517
The directors represent the key management personnel. Details of their compensation are given in the Directors’ Remuneration Report on
page 30.
5 Pensions
The group operates two pension schemes providing benefits based on final pensionable pay, which are closed to new entrants and were closed
to future accruals on 6 April 2009. The assets are independent of the finances of the group and are administered by Trustees. The Trustee board
is appointed by both the company and the members of the schemes and acts in the interest of the schemes and all relevant stakeholders,
including the members and the company. The Trustees are responsible for the investment of the assets of the schemes.
The latest actuarial valuation was performed with an effective date of 6 April 2023 using the defined accrued benefit method. It assumed that
the rate of return on investments was 3.3% per annum for pre-retirement and 3.6% for post-retirement and price inflation was 3.4% under RPI
and 2.9% under CPI. The demographic assumptions were based on S3PA (YoB) tables with an age rating of -1 year being applied to the tables
for shop floor and staff schemes. The future mortality improvements were based on CMI 2020 projections with a 1.75% per annum long-term
improvement rate. The next actuarial valuation due will be with an effective date of 6 April 2026.
In order to help optimise the return on assets held by the pension schemes, the pension payments and administration costs incurred by the
schemes are paid by the company. The net amount due from the schemes (being pension payments made plus administrative costs less
repayments received from the schemes) are subject to repayment to the company and recorded as amounts receivable from pension schemes
in the group and company financial statements (notes 13 and 9 respectively). The amounts are recorded as payables by the schemes and
shown as a reduction to asset values in the pension disclosures set out below.
The pension schemes are related parties of the company and during the year £2,119,000 (2022 – £2,120,000) was paid by the company on
behalf of the schemes in respect of pension payments and administration costs. There are no funding arrangements in place that would impact
on future contributions and no contributions are expected to be made in the next financial year. The pension schemes made repayments to
the company during the year of £2,120,000 (2022 – £2,114,000). At 31 March 2024 the outstanding balance due from the schemes to the
company was £2,119,000 (2023 – £2,120,000) as set out in note 13. In addition, the group made contributions to individual members’ Group
Personal Pension Plans during the year.
Notes to the Consolidated Financial Statements
continued
49
Castings P.L.C.
Annual Report for the year ended 31 March 2024
Strategic Report
Financial Statements
Related risks
Through its defined benefit pension plans, the group was exposed to a number of risks that are inherent in such plans and arrangements. The
main risks are summarised below and there are no unusual, entity-specific or plan-specific risks and no significant concentration risks:
•
asset value volatility, with the associated impact on the assets held in connection with the funding of pension obligations and the related
cash flows;
•
changes in bond yields, with any reduction resulting in an increase in the present value of pension obligations, mitigated by an increase in
the value of some of the plan assets;
•
inflation, as pension obligations are linked to inflation; and
•
life expectancy, as pension benefits are generally provided for the life of beneficiaries and their dependants.
Composition of the schemes
The group operates defined benefit schemes (in addition to a defined contribution scheme) in the UK. Full actuarial valuations of the defined
benefit schemes were carried out at 6 April 2023 and updated to 31 March 2024 using the projected unit method by a qualified independent
actuary. The major assumptions used by the actuary were (in nominal terms):
2024
2023
Rate of increase of pensions in payment
2.7%
2.6%
Discount rate
4.9%
4.9%
Inflation assumption (RPI)
3.1%
3.2%
Inflation assumption (CPI)
2.8%
2.8%
2024
£000
2023
£000
Change in benefit obligation
Benefit obligation at beginning of year
37,924
50,947
Past service cost
—
—
Interest cost on defined benefit obligation
1,808
1,383
Actuarial losses/(gains) arising from changes in financial assumptions
235
(13,645)
Actuarial gains arising from changes in demographic assumptions
(594)
—
Other experience losses/(gains)
(34)
2,343
Benefits paid
(2,075)
(3,104)
Benefit obligation at end of year
37,264
37,924
Change in plan assets
Fair value of plan assets at beginning of year
48,337
60,879
Interest income on plan assets
2,315
1,660
Return on plan assets less than discount rate
(338)
(10,981)
Administrative expenses
(112)
(117)
Benefits paid
(2,075)
(3,104)
Fair value of plan assets at end of year
48,127
48,337
Surplus
10,863
10,413
Unrecognised pension surplus (asset ceiling)
(10,863)
(10,413)
Net amount recognised in the balance sheet
—
—
50
Castings P.L.C.
Annual Report for the year ended 31 March 2024
Castings P.L.C.
Castings P.L.C.
5 Pensions continued
The pension surplus has not been recognised as the group does not have an unconditional right to receive returns of contributions or refunds
under the scheme rules.
Year to
31 March
2024
£000
Year to
31 March
2023
£000
Components of pension cost
Current service cost
—
—
Past service cost
—
—
Interest cost on defined benefit obligation
1,808
1,383
Interest income on plan assets
(2,315)
(1,660)
Interest expense on effect of asset ceiling on unrecognised surplus
507
277
Administrative expenses
112
117
Total pension cost recognised within administrative expenses (note 4)
112
117
Loss/(gain) arising from changes in financial assumptions
235
(13,645)
Gain arising from changes in demographic assumptions
(594)
—
Experience (gain)/loss
(34)
2,343
Return on plan assets less than discount rate
338
10,981
Changes in asset ceiling on unrecognised surplus
(57)
204
Pension gain shown in statement of comprehensive income
(112)
(117)
Total defined benefit cost recognised in the year
—
—
Defined benefit obligation by participant category
31 March
2024
£000
31 March
2023
£000
Participant category
Active participants
—
—
Deferred participants
17,447
16,842
Pensioners
19,817
21,082
37,264
37,924
Scheme assets
Investments of the defined benefit schemes are diversified, such that failure of any single investment would not have a material impact on the
overall level of assets. On 24 March 2020, the Trustees of the schemes completed a bulk annuity insurance buy-in with Aviva Life & Pensions
UK Limited (‘Aviva’) thus providing certainty and security for all members of the schemes. The buy-in secures an insurance asset from Aviva
that fully matches, subject to final price adjustment of the bulk annuity pricing, the remaining pension liabilities of the schemes (excluding those
relating to GMP equalisation). The buy-in covers the investment, longevity, interest rate and inflation risks in respect of the schemes and therefore
substantially reduces the pension risk to the company. The asset allocations at the year end were as follows:
Plan
assets at
31 March
2024
£000
Plan
assets at
31 March
2023
£000
Assets category
Cash and cash equivalents
13,919
13,457
Asset held by insurance company
36,327
37,000
50,246
50,457
Amounts repayable to the group
(2,119)
(2,120)
48,127
48,337
Notes to the Consolidated Financial Statements
continued
51
Castings P.L.C.
Annual Report for the year ended 31 March 2024
Strategic Report
Financial Statements
In determining the appropriate discount rate, the company considers the interest rates of corporate bonds with at least an ‘AA’ rating.
The projected pension cost for the year ending 31 March 2025 is £116,000.
Weighted average life expectancy for mortality tables* used to determine benefit obligations at:
2024
2023
Male
Staff/
Shopfloor
Female
Staff/
Shopfloor
Male
Staff/
Shopfloor
Female
Staff/
Shopfloor
Scheme member age 65
(current life expectancy)
22.4/22.4
25.0/25.0
23.2/22.3
25.8/24.9
Scheme member age 45
(life expectancy at age 65)
24.1/24.1
26.7/26.7
24.8/24.0
27.5/26.6
* Mortality tables 102% for Males and 99% for Females of S3PA CMI 2020 projections with a 1.5% long-term rate of improvement have been
used for both schemes.
Sensitivities
The calculations of the defined benefit obligations are sensitive to the assumptions set out on pages 48 to 51. The following table sets out
the estimated impact of a change in the assumptions on the defined benefit obligation at 31 March 2024, whilst holding all other assumptions
constant. The sensitivity analysis may not be representative of the actual change in defined benefit obligation as it is unlikely that the change in
assumptions would occur in isolation of another as some of the assumptions may be correlated.
31 March
2024
£000
Defined benefit obligation as a result of:
Reduction in the discount rate of 0.25%
38,304
Increase in inflation of 0.25%
37,911
One year increase in life expectancy
38,421
Maturity profile of defined benefit obligation
31 March
2024
£000
31 March
2023
£000
Expected benefit payments during:
Year 1
2,034
1,991
Year 2
2,035
2,035
Year 3
2,154
2,154
Year 4
2,314
2,314
Year 5
2,531
2,399
Years 6–10
13,781
13,414
The maturity profile shown above is not the full maturity profile but that of the next ten years, based on an analysis of the present value of the
defined benefit obligation.
The weighted average duration of the defined benefit obligation of the schemes is 13 years.
52
Castings P.L.C.
Annual Report for the year ended 31 March 2024
Castings P.L.C.
Castings P.L.C.
6 Finance income
2024
£000
2023
£000
Interest on short-term deposits
1,474
327
Income from listed investments
12
17
Profit on sale of listed investments
41
—
1,527
344
7 Income tax expense
2024
£000
2023
£000
Corporation tax based on a rate of 25% (2023 – 19%)
UK corporation tax
Current tax on profits for the year
4,425
2,500
Adjustments to tax charge in respect of prior years
(171)
(87)
4,254
2,413
Deferred tax
Current year origination and reversal of temporary differences
1,011
935
Adjustment to deferred tax charge in respect of prior years
(700)
(425)
311
510
Taxation on profit
4,565
2,923
Profit before income tax
21,286
16,713
Tax on profit at the standard rate of corporation tax
in the UK of 25% (2023 – 19%)
5,322
3,175
Effect of:
Expenses not deductible for tax purposes
86
238
Adjustment to tax charge in respect of prior years
(171)
(87)
Adjustment to deferred tax charge in respect of prior years
(700)
(425)
Pension adjustments
28
22
Total tax charge for the year
4,565
2,923
Effective rate of tax (%)
21.4
17.5
The UK tax rate was increased from 19% to 25% from 1 April 2023 as per the Finance Act 2021 and consequently, the deferred tax balances
have been measured using these revised rates.
8 Dividends
2024
£000
2023
£000
Final paid of 13.51p per share for the year ended 31 March 2023 (2022 – 12.57p)
5,881
5,475
Interim paid of 4.13p per share (2023 – 3.84p)
1,794
1,673
Supplementary dividend of 15.00p per share for the year ended 31 March 2023 (2022 – 15.00p)
6,534
6,534
14,209
13,682
The directors are proposing a final dividend of 14.19 pence (2023 – 13.51 pence) per share totalling £6,166,700 (2023 – £5,884,695). In
addition, the directors have declared a supplementary dividend of 7.00 pence per share, totalling £3,042,065. These dividends have not been
accrued at the balance sheet date.
Notes to the Consolidated Financial Statements
continued
53
Castings P.L.C.
Annual Report for the year ended 31 March 2024
Strategic Report
Financial Statements
9 Earnings per share and diluted earnings per share
The calculation of the basic and diluted earnings per share is based on the following data:
2024
2023
Profit after taxation (£000)
16,721
13,790
Weighted average number of shares – basic calculation
43,488,441
43,561,593
Earnings per share – basic calculation (pence per share)
38.45p
31.66p
Number of dilutive share options in issue
147,529
109,909
Weighted average number of shares – diluted calculation
43,635,970
43,671,502
Earnings per share – diluted calculation (pence per share)
38.32p
31.58p
10 Property, plant and equipment
Freehold
land and
buildings
£000
Plant and
equipment
£000
Total
£000
Cost
At 1 April 2023
40,957
160,396
201,353
Additions during the year
544
9,969
10,513
Disposals
—
(4,334)
(4,334)
At 31 March 2024
41,501
166,031
207,532
Accumulated depreciation
At 1 April 2023
13,720
127,280
141,000
Charge for year
969
7,882
8,851
Disposals
—
(4,118)
(4,118)
At 31 March 2024
14,689
131,044
145,733
Net book values
At 31 March 2024
26,812
34,987
61,799
At 31 March 2023
27,237
33,116
60,353
Cost
At 1 April 2022
40,110
155,596
195,706
Additions during the year
437
5,761
6,198
Disposals
—
(961)
(961)
Other
410
—
410
At 31 March 2023
40,957
160,396
201,353
Accumulated depreciation
At 1 April 2022
12,295
120,610
132,905
Charge for year
1,015
7,631
8,646
Disposals
—
(961)
(961)
Other
410
—
410
At 31 March 2023
13,720
127,280
141,000
Net book values
At 31 March 2023
27,237
33,116
60,353
At 31 March 2022
27,815
34,986
62,801
The net book value of land and buildings includes £2,169,000 (2023 – £2,169,000) for land which is not depreciated.
Included within plant and equipment are assets in the course of construction with a net book value of £890,000 (2023 – £385,000) which are
not depreciated.
54
Castings P.L.C.
Annual Report for the year ended 31 March 2024
Castings P.L.C.
Castings P.L.C.
11 Financial assets
2024
£000
2023
£000
Financial assets at FVTPL
—
356
2024
£000
2023
£000
At 1 April 2023
356
396
Net losses recognised in other comprehensive income
—
(40)
Disposals
(356)
—
At 31 March 2024
—
356
Financial assets at fair value through profit and loss (FVTPL) were UK quoted equity securities and are denominated in sterling. The fair value of
the securities was based on published quoted prices in an active market. In the previous year, these financial assets were measured at fair value
through other comprehensive income. The financial assets were disposed of during the year, the profit on sale of £41,000 being recognised
within finance income.
The cumulative fair value gains and losses which are undistributable and held within retained earnings totalled £nil (2023 – £199,000).
12 Inventories
2024
£000
2023
£000
Raw materials
6,059
8,464
Work in progress
12,913
9,598
Finished goods
14,164
8,033
33,136
26,095
Inventories are net of impairment provisions of £811,000 (2023 – £855,000). The cost of inventories recognised as an expense is £50,358,000
(2023 – £51,835,000).
13 Trade and other receivables
2024
£000
2023
£000
Due within one year:
Trade receivables
33,757
40,810
Other receivables
3,010
3,587
Receivable from pension schemes (see note 5)
2,119
2,120
Prepayments and accrued income
7,707
4,563
46,593
51,080
14 Trade and other payables
2024
£000
2023
£000
Current trade and other payables:
Trade payables
22,683
24,680
Social security
2,398
2,535
Other payables
1,265
959
Accruals and deferred income
6,983
8,877
33,329
37,051
Included within accruals is a warranty provision that is not material to the financial statements.
Notes to the Consolidated Financial Statements
continued
55
Castings P.L.C.
Annual Report for the year ended 31 March 2024
Strategic Report
Financial Statements
15 Deferred tax
Deferred tax is calculated in full on temporary differences under the liability method using the large company tax rate applicable in future years of
25% (2023 – 25%). The movement on the deferred tax account is shown below:
Deferred tax – net
2024
£000
2023
£000
At 1 April 2023
5,719
5,219
Credited to other comprehensive income
—
(10)
Charged to profit
311
510
At 31 March 2024
6,030
5,719
The movement in deferred tax assets and liabilities during the year is shown below:
Deferred tax – liabilities
Accelerated
tax
depreciation
£000
Other
£000
Total
£000
At 1 April 2023
5,752
(33)
5,719
Charged/(credited) to profit
378
(67)
311
Credited to other comprehensive income
—
—
—
At 31 March 2024
6,130
(100)
6,030
Of the deferred tax liabilities, £1,265,000 (2022 – £836,000) is expected to be recovered within 12 months with £4,765,000 (2023 – £4,883,000)
expected to be recovered after more than 12 months.
The movement in the deferred tax assets and liabilities during the prior year is shown below:
Accelerated
tax
depreciation
£000
Other
£000
Total
£000
At 1 April 2022
5,230
(11)
5,219
Charged/(credited) to profit
522
(12)
510
Credited to other comprehensive income
—
(10)
(10)
At 31 March 2023
5,752
(33)
5,719
The deferred tax credited to other comprehensive income during the year is as follows:
2024
£000
2023
£000
Tax on change in fair value of financial assets
—
(10)
Tax on items taken directly to other comprehensive income
—
(10)
16 Share capital
2024
£000
2023
£000
Authorised 50,000,000 10p ordinary shares
5,000
5,000
Allotted and fully paid 43,632,068 10p ordinary shares
4,363
4,363
The group considers its capital to comprise its ordinary share capital, share premium and accumulated retained earnings. In managing its capital,
the group’s primary objective is to ensure its continued ability to provide a consistent return for its equity shareholders through a combination
of capital growth and distributions. Each share entitles the holder to receive the amount of dividends per share declared by the company and a
vote at any meetings of the company.
In order to achieve this objective, the group monitors its gearing to balance risks and returns at an acceptable level and also to maintain a
sufficient funding base to enable the group to meet its working capital and strategic investment needs. In making decisions to adjust its capital
structure to achieve these aims, either through altering its dividend policy or new share issues, the group considers not only its short-term
position but also its long-term operational and strategic objectives.
56
Castings P.L.C.
Annual Report for the year ended 31 March 2024
Castings P.L.C.
Castings P.L.C.
17 Share-based payments
The company operates the Castings 2020 Restricted Share Plan under which nil-cost options have been granted to executive directors. The
options vest three years after the grant date and are subject to continued employment with the group. The options are also subject to a two year
holding period during which the participant shall be entitled to additional benefit (in cash or shares) in respect of dividends paid in that period.
2024
2023
At 1 April 2023
109,909
67,441
Granted during the year
37,620
42,468
Exercised or expired during the year
—
—
At 31 March 2024
147,529
109,909
Average fair value of share awards granted during the year at date of grant (pence)
368.8
322.8
Fair value of awards granted during the year (£)
138,758
137,086
The options were all granted on 12 July 2023 at a fair value, under the Black-Scholes model, of £3.6884 per option. The inputs used in the
valuation model, used to determine the charge to the income statement are as follows:
2024
2023
Weighted average share price (pence)
394.0
324.0
Weighted average exercise price (pence)
Nil
Nil
Expected dividend yield (%)
4.4
5.0
Weighted average remaining contractual life of shares outstanding (years)
3
3
Average fair value of share awards granted during the year at date of grant (pence)
368.8
322.8
Fair value of awards granted during the year (£)
138,758
137,086
The group recognised a total charge to the consolidated income statement of £102,000 (2023 – £119,000) in respect of equity-settled share-
based payment transactions.
18 Commitments and contingencies
2024
£000
2023
£000
Capital commitments contracted for by the group but not provided for in the financial statements
16,151
1,799
Capital commitments primarily relate to the investment in the new foundry line as discussed on page 6.
As set out on page 9, the group does not insure against the potential cost of product warranty or recall. Accordingly, there is always the
possibility of claims against the group for quality related issues on parts supplied to customers. As at 31 March 2024, the directors do not
consider any significant liability will arise in respect of any such claims (2023 – £nil).
19 Related party transactions
The group has a related party relationship with its directors; details of salaries and other benefits paid to directors are disclosed in the Directors’
Remuneration Report on pages 27 to 32. Transactions with the group’s pension schemes and balances owed to the company by the schemes
are disclosed in note 5.
Controlling party
The company’s shares are listed on the London Stock Exchange’s Regulated Market (Premium Listing) and are widely held. There is no one
controlling party or group of related parties who have control of the group.
20 Financial instrument risk exposure and management
In common with all other businesses, the group is exposed to risks that arise from its use of financial instruments. This note describes the
group’s objectives, policies and processes for managing those risks and the methods used to measure them. Further quantitative information in
respect of these risks is presented throughout these financial statements.
There have been no substantive changes in the group’s exposure to financial instrument risks, its objectives, policies and processes for
managing those risks or the methods used to measure them from previous years unless otherwise stated in this note.
Principal financial instruments
The principal financial instruments used by the group, from which financial instrument risk arises, are trade receivables, other receivables, cash at
bank, other interest-bearing deposits and trade and other payables.
Notes to the Consolidated Financial Statements
continued
57
Castings P.L.C.
Annual Report for the year ended 31 March 2024
Strategic Report
Financial Statements
General objectives, policies and processes
The board has overall responsibility for the determination of the group’s risk management objectives and policies and, whilst retaining ultimate
responsibility for them, it has delegated the authority for designing and operating processes that ensure the effective implementation of the
objectives and policies to the group’s finance function. The board receives reports through which it reviews the effectiveness of the processes
put in place and the appropriateness of the objectives and policies it sets.
The overall objective of the board is to set policies that seek to reduce risk as far as possible without unduly affecting the group’s
competitiveness and flexibility. Further details regarding these policies are set out below:
Categories of financial assets and financial liabilities
Financial assets
2024
£000
2023
£000
Financial assets measured at amortised cost
Trade receivables
33,757
40,810
Other receivables
5,129
5,707
Cash and cash equivalents
32,527
35,566
Total current financial assets
71,413
82,083
Non-current financial assets
Financial assets at fair value through other comprehensive income
—
356
Total non-current financial assets
—
356
Total financial assets
71,413
82,439
The maximum exposure to credit risks is detailed in the above table, being the total financial assets excluding those at fair value through other
comprehensive income.
Financial liabilities measured
at amortised cost
2024
£000
2023
£000
Current financial liabilities
Trade payables
22,683
24,680
Other payables
1,265
959
Accruals
6,983
8,877
Total current financial liabilities
30,931
34,516
Credit risk
Credit risk arises principally from the group’s trade receivables. It is the risk that the counterparty fails to discharge its obligation in respect of the
instrument. As at 31 March 2024, trade receivables of £33,157,000 (2023 – £39,513,000) were not past due.
Apart from the largest customers set out in note 2, the group does not have any significant credit risk exposure to any single counterparty or any
group of counterparties having similar characteristics, being related entities. Concentration of credit risk to the direct customers included in note
2 did not exceed 30% of trade receivables at any time during the year. Concentration of credit risk to any other counterparty did not exceed 6%
of trade receivables at any time during the year.
The credit risk on liquid funds is limited because the counterparties are banks with high credit ratings assigned by international credit-rating
agencies.
Trade receivables
Credit risk is managed locally by the management of each subsidiary. Prior to accepting new customers, credit checks are obtained from a
reputable external source (e.g. Creditsafe) and trade references are taken up.
Based on this information, credit limits and payment terms are established, although for some large customers and contracts, credit risk is
not considered to be high risk, and credit limits can sometimes be exceeded. These exceeded accounts are closely monitored and if there
is a concern over recoverability accounts are put on stop and no further goods will be sold before receiving payment. Proforma invoicing is
sometimes used for new customers, or customers with a poor payment history, until creditworthiness can be proven or re-established.
58
Castings P.L.C.
Annual Report for the year ended 31 March 2024
Castings P.L.C.
Castings P.L.C.
20 Financial instrument risk exposure and management continued
Management teams at each subsidiary receive regular ageing reports, and these are used to chase relevant customers for outstanding balances.
Impairment provisions are made against trade receivables when there is no reasonable expectation of recovery based upon objective evidence.
Impairment provisions are also recognised based on the simplified approach within IFRS 9 using the lifetime expected credit losses. To measure
the expected credit losses, trade receivables have been grouped based on shared credit risk and the days past due. The expected loss rates
are based on the payment profiles and historical credit losses experience over a three year period. The historical loss rates are adjusted to reflect
current and forward looking information on macroeconomic factors affecting the ability of the customers to settle the receivables.
No major renegotiation of terms has taken place during the year.
The credit quality of financial assets that are neither past due nor impaired can be assessed by reference to external credit ratings (if available) or
to historical information about default rates. The credit quality of trade receivables that are neither past due nor impaired are all assessed to be
virtually fully recoverable (2023 – virtually fully recoverable).
At 31 March 2024 trade receivables of £488,000 (2023 – £1,297,000) were past due but not impaired. They relate to customers with no default
history. The ageing of these receivables is as follows:
2024
£000
2023
£000
30–60 days
213
242
60–90 days
105
624
90+ days
170
431
488
1,297
The group records impairment losses on its trade receivables (including an impairment provision for trade receivables not past due) separately
from gross receivables. The movements on this allowance account during the year are summarised below:
2024
£000
2023
£000
Opening balance
584
447
(Decrease)/increase in provisions
(87)
137
Written off against provisions
(9)
—
Closing balance
488
584
Impairment credits on trade receivables of £96,000 (2023 – losses of £137,000) were recognised in administrative expenses.
Liquidity risk
Liquidity risk arises from the group’s management of working capital. It is the risk that the group will encounter difficulty in meeting its financial
obligations as they fall due. The group’s policy is to ensure that it will always have sufficient cash to allow it to meet its liabilities when they
become due.
To achieve this aim, it seeks to maintain sufficient cash balances on instant access deposits. The cash position is continuously monitored to
ensure that there is sufficient cash and that the optimum interest rate is obtained.
Based on projected cash flows, the group expected to have sufficient liquid resources to meet its obligations under all reasonably
expected circumstances.
Market risk
Market risk arises from the group’s use of interest-bearing and foreign currency financial instruments. It is the risk that the fair value or future
cash flows of a financial instrument will fluctuate because of changes in interest rates (interest rate risk), foreign exchange rates (currency risk) or
other market factors (other price risk).
Where the group has generated a significant amount of surplus cash it will invest in term deposits if liquidity risk is not unduly compromised.
Whilst a review of credit ratings is performed for each counterparty, there will always remain an element of risk over deposits. The directors
believe that the exposure to market price risk from these activities is acceptable in the group’s circumstances.
Interest rate and currency risk
The group does not have any financial liabilities subject to interest rate risk at the balance sheet date (2023 – £nil).
Foreign exchange risk arises when individual group operations enter into transactions denominated in a currency other than their functional
currency. It is the group’s policy to convert all non-functional currency to sterling at the first opportunity after allowing for similar functional
currency outlays. It does not consider the use of hedging facilities would significantly minimise this risk. At the balance sheet date the group did
not have any forward contracts in place to sell foreign currency (2023 – £nil).
Notes to the Consolidated Financial Statements
continued
59
Castings P.L.C.
Annual Report for the year ended 31 March 2024
Strategic Report
Financial Statements
At the balance sheet date foreign exchange facilities of £1.3 million (2023 – £1.9 million) were unused and available to the group to enable it to
enter into forward exchange contracts.
The currency and interest profile of the group’s financial assets and financial liabilities are as follows:
Floating rate
assets
2024
£000
Fixed rate
assets
2024
£000
Interest-free
assets
2024
£000
Total
2024
£000
Sterling
15,390
13,230
32,431
61,051
US$
726
—
2,899
3,625
Euro
3,181
—
3,556
6,737
19,297
13,230
38,886
71,413
Floating rate
assets
2023
£000
Fixed rate
assets
2023
£000
Interest-free
assets
2023
£000
Total
2023
£000
Sterling
—
34,497
38,817
73,314
US$
404
—
2,934
3,338
Euro
665
—
5,122
5,787
1,069
34,497
46,873
82,439
Interest-free
liabilities
2024
£000
Interest-free
liabilities
2023
£000
Sterling
29,303
33,620
US$
105
77
Euro
1,523
819
30,931
34,516
Fixed rate assets attracted interest rates of between 1.5% and 5.2% (2022 – 1.0% and 4.2%) on sterling deposits.
Floating rate assets consisted of overnight cash at bank at nominal interest rates.
Cash and cash equivalents
Cash and cash equivalents comprise cash in hand, deposits on call with banks and short-term deposits that have fixed interest rates and
original maturities of three months or less on inception.
The effect of a +25/(25) increase/(decrease) in basis points with all other variables held constant would have the effect of increasing/(decreasing)
profit before tax by £81,000/(£81,000) (2023 – £83,000/(£83,000)).
The group believes that movements on exchange rates of +/–5% could be possible, the effect of which is that profit before tax would (decrease)/
increase by (£169,000)/£187,000 (2023 – (£244,000)/£270,000).
Fair value
Unless otherwise indicated, the carrying amounts of the group’s financial instruments are a reasonable approximation of their fair values.
60
Castings P.L.C.
Annual Report for the year ended 31 March 2024
Castings P.L.C.
Castings P.L.C.
Five Year Financial History – unaudited
For the years ended 31 March
2024
£000
2023
£000
2022
£000
2021
£000
2020
£000
Trading results
Revenue
224,414
200,990
148,583
114,702
138,667
Profit before tax
21,286
16,713
12,074
4,987
12,700
Profit after tax
16,721
13,790
8,552
4,149
10,066
Dividends paid
14,209
13,682
6,698
6,532
13,037
Balance sheet summary
Equity
Share capital
4,363
4,363
4,363
4,363
4,363
Reserves
129,627
127,297
127,135
125,101
127,295
Total equity
133,990
131,660
131,498
129,464
131,658
Assets
Property, plant and equipment
61,799
60,353
62,801
67,112
70,693
Financial assets
—
356
396
308
358
61,799
60,709
63,197
67,420
71,051
Current assets
112,256
113,721
101,997
90,169
84,629
Total liabilities
(40,065)
(42,770)
(33,696)
(28,125)
(24,022)
Net assets
133,990
131,660
131,498
129,464
131,658
Dividends and earnings
Pence per share declared (excluding special)
18.32
17.35
16.23
15.26
14.88
Number of times covered (dividend paid, excluding special)
2.2
1.9
1.3
0.6
1.6
Earnings per share – basic
38.45p
31.66p
19.60p
9.51p
23.07p
Earnings per share – diluted
38.32p
31.58p
19.57p
9.50p
23.07p
61
Castings P.L.C.
Annual Report for the year ended 31 March 2024
Strategic Report
Financial Statements
Parent Company Balance Sheet
as at 31 March 2024
Notes
2024
£000
2023
£000
ASSETS
Non-current assets
Property, plant and equipment
5
21,982
21,428
Investments
6
4,995
4,995
Financial assets
7
—
356
26,977
26,779
Current assets
Inventories
8
23,129
17,205
Trade and other receivables
9
35,734
38,157
Current tax asset
—
129
Cash and cash equivalents
19,666
29,239
78,529
84,730
Total assets
105,506
111,509
LIABILITIES
Current liabilities
Trade and other payables
10
22,327
25,725
Current tax liabilities
1,158
—
23,485
25,725
Non-current liabilities
Deferred tax liabilities
12
1,181
1,326
Total liabilities
24,666
27,051
Net assets
80,840
84,458
Equity attributable to the equity holders of the company
Share capital
13
4,363
4,363
Share premium account
874
874
Treasury shares
(627)
(231)
Other reserve
13
13
Retained earnings
76,217
79,439
Total shareholders’ funds
80,840
84,458
The company’s profit for the financial year was £10,885,000 (2023 – £13,121,000).
The parent company financial statements on pages 61 to 68 were approved and authorised for issue by the board of directors on 12 June 2024,
and were signed on its behalf by:
A. N. Jones
Chairman
S. J. Mant
Finance Director
Notes to the parent company financial statements are on pages 63 to 68.
Registered number – 91580.
62
Castings P.L.C.
Annual Report for the year ended 31 March 2024
Castings P.L.C.
Castings P.L.C.
Parent Company Statement of Changes in Equity
for the year ended 31 March 2024
Equity attributable to equity holders of the parent
Share
capitala)
£000
Share
premiumb)
£000
Treasury
sharesc)
£000
Other
reserved)
£000
Retained
earningse)
£000
Total
equity
£000
At 1 April 2023
4,363
874
(231)
13
79,439
84,458
Profit for the year and total comprehensive income for the
year
—
—
—
—
10,885
10,885
Shares acquired in the year
—
—
(396)
—
—
(396)
Equity-settled share-based payments
—
—
—
—
102
102
Dividends (see note 4)
—
—
—
—
(14,209)
(14,209)
At 31 March 2024
4,363
874
(627)
13
76,217
80,840
Equity attributable to equity holders of the parent
Share
capitala)
£000
Share
premiumb)
£000
Treasury
sharesc)
£000
Other
reserved)
£000
Retained
earningse)
£000
Total
equity
£000
At 1 April 2022
4,363
874
(79)
13
79,911
85,082
Profit for the year
—
—
—
—
13,121
13,121
Other comprehensive income/(losses):
Change in fair value of financial assets
—
—
—
—
(40)
(40)
Tax effect of items taken directly to reserves
—
—
—
—
10
10
Total comprehensive income for the year
—
—
—
—
13,091
13,091
Shares acquired in the year
—
—
(152)
—
—
(152)
Equity-settled share-based payments
—
—
—
—
119
119
Dividends (see note 4)
—
—
—
—
(13,682)
(13,682)
At 31 March 2023
4,363
874
(231)
13
79,439
84,458
a) Share capital – The nominal value of allotted and fully paid up ordinary share capital in issue.
b) Share premium – Amount subscribed for share capital in excess of nominal value.
c) Treasury shares – Value of shares acquired by the company.
d) Other reserve – Amounts transferred from share capital on redemption of issued shares.
e) Retained earnings – Cumulative net gains and losses recognised in the statement of comprehensive income.
63
Castings P.L.C.
Annual Report for the year ended 31 March 2024
Strategic Report
Financial Statements
Notes to the Parent Company Financial Statements
The Directors’ Report is on pages 21 to 23 of the Annual Report and Financial Statements
1 Accounting policies
General information
Castings Public Limited Company (the ‘company’, ‘Castings P.L.C.’) is incorporated and domiciled in the United Kingdom and registered in
England as a public company limited by shares. The company’s registered office is at Lichfield Road, Brownhills, West Midlands, WS8 6JZ,
United Kingdom. The company’s ordinary shares are traded on the London Stock Exchange’s Regulated Market (Premium Listing). There has
been no change in this information since the Annual Report for the year ended 31 March 2023.
Basis of preparation
The financial statements have been prepared in accordance with United Kingdom Accounting Standards (United Kingdom Generally Accepted
Accounting Practice) including Financial Reporting Standard 101 Reduced Disclosure Framework (‘FRS 101’). The principal accounting policies
adopted in the preparation of the financial statements are set out below. The policies have been consistently applied to all years presented,
unless otherwise stated.
The financial statements have been prepared on a going concern basis and under the historical cost convention, except for the revaluation of
certain financial instruments, and in accordance with the Companies Act 2006. As permitted by FRS 101, the company has taken advantage of
certain disclosure exemptions available under that standard and, therefore, these financial statements do not include:
•
certain comparative information otherwise required;
•
certain disclosures regarding the company’s capital;
•
a statement of cash flows;
•
the effect of future accounting standards not yet adopted;
•
the disclosure of the remuneration of key management personnel; and
•
disclosure of related party transactions with other wholly owned members of the group headed by the company.
In addition, and in accordance with FRS 101, further disclosure exemptions have been adopted because equivalent disclosures are included
in the group financial statements. Therefore, these financial statements do not include certain disclosures in respect of business combinations,
financial instruments (other than certain disclosures required as a result of recording instruments at fair value) and impairment of assets.
Going concern
In determining the basis of preparation for the consolidated financial statements, the directors have considered the group’s business activities,
together with factors likely to affect its future development, performance and position. The company has modelled a base case, which reflects
the directors’ current expectations of future trading in addition to potential severe but plausible impacts on revenue, profits and cash flows in a
downside scenario. The base case scenario is based on current demand schedules from customers and assumed that these levels, along with
average selling prices and costs remain consistent. The company’s recent record of cash conversion was used to estimate the cash generation
in the period under review. A severe but plausible downside scenario has also been prepared, further details are set out in the group accounting
policies in note 1. The directors are confident that the company will have sufficient funds to continue to meet its liabilities as they fall due for at
least twelve months from the date of the approval of these financial statements.
Revenue recognition
Revenue is measured at the fair value of consideration received or receivable and represents amounts receivable for goods and services
provided in the normal course of business, net of discounts, VAT and other sales-related taxes. Revenue from the sale of goods relates to the
sale of castings. Revenue from the sale of services relates to machining and minor assembly work performed on a subcontract basis for external
customers. Revenue is recognised once the performance obligation has been met. This is deemed to be when the goods and services have
been collected by, or delivered to, the customer in accordance with the agreed delivery terms.
Post-retirement benefits
Two of the company’s pension plans are of a defined benefit type. Under IAS 19 Employee Benefits the employer’s portion of the current service
costs and curtailment gains are charged to operating profit for these plans, with the net interest also being charged/credited to operating
profit subject to the asset ceiling. Actuarial gains and losses are recognised in other comprehensive income and the balance sheet reflects the
schemes’ surplus or deficit at the balance sheet date. A full valuation is carried out triennially using the projected unit credit method. Where the
company cannot benefit from a scheme surplus in the form of refunds from the plans or reductions in future contributions, any asset resulting
from the above policy is restricted accordingly. Payments to the defined contribution scheme are charged to the consolidated statement of
comprehensive income as they become payable.
Inventories
The company’s inventories are valued at the lower of cost on a first-in, first-out basis and net realisable value. Cost includes a proportion of
production overheads based on normal levels of activity. Provision is made for obsolete and slow-moving items based on a review of parts with
no demand during the year.
64
Castings P.L.C.
Annual Report for the year ended 31 March 2024
Castings P.L.C.
Castings P.L.C.
1 Accounting policies continued
Property, plant and equipment
Property, plant and equipment assets are held at cost less accumulated depreciation. Depreciation is provided on property, plant and equipment,
other than freehold land and assets in the course of construction, on a straight-line basis. The periods of write-off used are as follows:
i. Freehold buildings over 50 years.
ii. Plant and equipment over a period of 3 to 15 years.
The company annually reviews the assessment of residual values and useful lives in accordance with IAS 16.
Cash and cash equivalents
Cash and cash equivalents includes cash in hand, deposits at call with banks and other short-term highly liquid investments with original
maturities of three months or less from inception.
Foreign currencies
Assets and liabilities in foreign currencies are translated at the spot rates of exchange ruling at the balance sheet date. Transactions in
foreign currencies are recorded at the rate ruling at the date of the transaction; all differences are dealt with through the statement of
comprehensive income.
Financial instruments
a) Financial assets
The company classifies its financial assets into one of the categories discussed below, depending on the purpose for which the asset was
acquired. The company’s accounting policy for each category is as follows:
Fair value through profit and loss
Fair value through profit and loss financial assets comprise the group’s strategic investments in entities not qualifying as subsidiaries. They are
carried at fair value with changes in fair value recognised in the income statement. The cumulative fair value gains and losses are held within
retained earnings and are not treated as distributable. This treatment is considered more appropriate than in the prior year when the investments
were treated as fair value through other comprehensive income. The impact of this change is not material to the current or prior year financial
statements. Fair value is determined with reference to published quoted prices in an active market. The dividend income from listed investments
is presented within finance income.
Amortised cost
These assets are held in order to collect contractual cash flows, on specific dates, which are solely payments of the principal and interest on
the principal amount outstanding. They arise principally through the provision of goods and services to customers (e.g. trade receivables) and
deposits held at banks and building societies, but may also incorporate other types of contractual monetary asset. They are initially recognised
at fair value plus transaction costs that are directly attributable to the acquisition or issue and subsequently carried at amortised cost using the
effective interest rate method, less provision for impairment.
Impairment provisions for trade receivables are recognised based on the simplified approach within IFRS 9 using the lifetime expected credit
losses. During this process the probability of the non-payment of the trade receivables is assessed. Where specific receivables are known to
be ‘bad’ or it becomes apparent that payment is ‘doubtful’ then a credit loss allowance of 100% is applied. Such provisions are recorded in
a separate allowance account with the loss being recognised within administrative expenses in the consolidated statement of comprehensive
income. On confirmation that the deposit or receivable will not be collectable, the gross carrying value of the asset is written off against the
associated provision.
b) Financial liabilities
The company classifies its financial liabilities into liabilities measured at amortised cost. Although the company uses derivative financial
instruments in economic hedges of currency risk, it does not hedge account for these transactions and the amounts are not material.
Financial liabilities measured at amortised cost
Financial liabilities include trade payables and other short-term monetary liabilities, which are initially recognised at fair value and subsequently
carried at amortised cost using the effective interest method.
Fair value is calculated by discounting estimated future cash flows using a market rate of interest.
c) Share capital
The company’s ordinary shares are classified as equity instruments. Share capital includes the nominal value of the shares and any share
premium attaching to the shares.
Notes to the Parent Company Financial Statements
continued
The Directors’ Report is on pages 21 to 23 of the Annual Report and Financial Statements
65
Castings P.L.C.
Annual Report for the year ended 31 March 2024
Strategic Report
Financial Statements
Current and deferred tax
Deferred tax is provided using the liability method. Deferred income tax assets are recognised to the extent that it is probable that future taxable
profit will be available against which the temporary differences can be utilised.
Deferred tax is measured at the actual tax rates that are expected to apply in the periods in which the temporary differences are expected to
reverse, based on tax rates and laws that have been enacted or substantively enacted by the balance sheet date.
Current tax is provided for on the taxable profits of each company in the group, using current tax rates and legislation that has been enacted or
substantively enacted by the balance sheet date.
Dividends
Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends
are recognised when approved by the shareholders at an Annual General Meeting.
Share-based payments
The cost of equity-settled transactions with employees of the company is measured by reference to the fair value at the date at which they
are granted using the Black-Scholes model, taking into the account the two year holding period at the end of the vesting period. The cost is
recognised as an expense over the vesting period, which ends on the date on which the relevant employees become fully entitled to the award.
The amount recognised as an expense is adjusted to reflect the actual number of awards for which the related service conditions are met, such
that the amount ultimately recognised as an expense is based on the number of awards that meet the related service conditions at the vesting
date.
Investments
Investments in subsidiaries are held at cost and reviewed for impairment annually.
Material accounting estimates and judgements
The company makes certain estimates and judgements regarding the future. Estimates and judgements are continually evaluated based on
historical experience and other factors, including expectation of future events that are believed to be reasonable under the circumstances. In
the future, actual experience may differ from these estimates and judgements. The estimates and assumptions that have a significant risk of
causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are set out on page 46 of the group
financial statements.
2 Company profit and loss account
Castings P.L.C. has taken advantage of Section 408 of the Companies Act 2006 and has not included its own profit and loss account in these
financial statements. The company’s profit for the financial year was £10,885,000 (2023 – £13,121,000).
The profit and loss account includes £82,000 (2023 – £76,000) for audit fees.
The cost of inventories recognised as an expense during the year was £24,790,000 (2023 – £18,410,000).
3 Employee information
2024
2023
Average monthly number of employees during the year was:
Production
371
367
Management and administration
27
26
398
393
2024
£000
2023
£000
Staff costs (including directors) comprise:
Wages and salaries
21,460
18,550
Social security costs
2,354
2,180
Other pension costs
743
662
24,557
21,392
The directors represent the key management personnel. Details of their compensation are given in the Directors’ Remuneration Report on
page 30.
66
Castings P.L.C.
Annual Report for the year ended 31 March 2024
Castings P.L.C.
Castings P.L.C.
4 Dividends
2024
£000
2023
£000
Final paid of 13.51p per share for the year ended 31 March 2023 (2022 – 12.57p)
5,881
5,475
Interim paid of 4.13p per share (2023 – 3.84p)
1,794
1,673
Supplementary dividend of 15.00p per share for the year ended 31 March 2023 (2022 - 15.00p)
6,534
6,534
14,209
13,682
The directors are proposing a final dividend of 14.19 pence (2023 – 13.51 pence) per share totalling £6,166,700 (2023 – £5,884,695). In
addition, the directors have declared a supplementary dividend of 7.00 pence per share, totalling £3,042,065. These dividends have not been
accrued at the balance sheet date.
5 Property, plant and equipment
Freehold and
leasehold
land and
buildings
£000
Plant and
equipment
£000
Total
£000
Cost
At 1 April 2023
21,742
36,622
58,364
Additions during year
544
1,831
2,375
Disposals
—
(1,950)
(1,950)
At 31 March 2024
22,286
36,503
58,789
Accumulated depreciation
At 1 April 2023
5,628
31,308
36,936
Charge for year
406
1,415
1,821
Disposals
—
(1,950)
(1,950)
At 31 March 2024
6,034
30,773
36,807
Net book values
At 31 March 2024
16,252
5,730
21,982
At 31 March 2023
16,114
5,314
21,428
The net book value of land and buildings includes £1,768,000 (2023 – £1,768,000) for land which is not depreciated. Included within plant and
other equipment are assets in the course of construction with a net book value of £nil (2023 – £nil) which are not depreciated.
6 Investments
2024
£000
2023
£000
Subsidiary companies
At cost
4,995
4,995
4,995
4,995
2024
£000
2023
£000
At 1 April 2023
4,995
4,995
Impairment losses
—
—
At 31 March 2024
4,995
4,995
The company owns 100% of the issued share capital of William Lee Limited, CNC Speedwell Limited, W. H. Booth & Co. Limited and Castings
Property Limited, companies which operate in the United Kingdom. William Lee Limited supplies spheroidal graphite iron castings and CNC
Speedwell Limited is a machinist operation. W. H. Booth & Co. Limited and Castings Property Limited do not trade and are dormant. The
registered office of William Lee Limited is Callywhite Lane, Dronfield, Sheffield, S18 2XU. The registered office for all other subsidiaries is Lichfield
Road, Brownhills, West Midlands, WS8 6JZ.
Notes to the Parent Company Financial Statements
continued
The Directors’ Report is on pages 21 to 23 of the Annual Report and Financial Statements
67
Castings P.L.C.
Annual Report for the year ended 31 March 2024
Strategic Report
Financial Statements
7 Financial assets
2024
£000
2023
£000
Financial assets at FVTPL
—
356
2024
£000
2023
£000
At 1 April 2023
356
396
Net (losses)/gains recognised in other comprehensive income
—
(40)
Disposals
(356)
—
At 31 March 2024
—
356
Financial assets at fair value through profit and loss (FVTPL) were UK quoted equity securities and are denominated in sterling. The fair value of
the securities was based on published quoted prices in an active market. In the previous year, these financial assets were measured at fair value
through other comprehensive income. The financial assets were disposed of during the year, the profit on sale of £41,000 being recognised
within finance income.
The cumulative fair value gains and losses which are undistributable and held within retained earnings totalled £nil (2023 – £199,000).
8 Inventories
2024
£000
2023
£000
Raw materials
2,858
4,410
Work in progress
8,968
5,492
Finished goods
11,303
7,303
23,129
17,205
Inventories are net of impairment provisions of £393,000 (2022 – £378,000).
9 Trade and other receivables
2024
£000
2023
£000
Due within one year:
Trade receivables
28,073
31,033
Other receivables
1,818
2,083
Receivable from pension schemes (see note 5 of group financial statements)
2,119
2,120
Prepayments and accrued income
3,724
2,921
35,734
38,157
Trade receivables are net of impairment provisions of £277,000 (2022 – £353,000).
10 Trade and other payables
2024
£000
2023
£000
Current trade and other payables
Trade payables
12,062
13,143
Amounts owed to subsidiary companies
5,698
7,773
Social security
1,076
934
Other payables
601
392
Accruals and deferred income
2,890
3,483
22,327
25,725
Amounts owed to subsidiary companies are interest free and have no fixed repayment terms.
11 Share-based payments
The disclosures in respect of share-based payments are set out in note 17 of the group financial statements.
68
Castings P.L.C.
Annual Report for the year ended 31 March 2024
Castings P.L.C.
Castings P.L.C.
68
12 Deferred tax liabilities
Deferred tax is calculated in full on temporary differences under the liability method using the large company tax rate applicable in future years of
25% (2022 – 25%). The movement on the deferred tax account is shown below:
Deferred tax liabilities
2024
£000
2023
£000
At 1 April 2023
1,326
1,131
Credited to other comprehensive income
—
(10)
(Credited)/charged to profit
(145)
205
At 31 March 2024
1,181
1,326
The movement in deferred tax liabilities during the year is shown below:
Deferred tax liabilities
Accelerated
tax
depreciation
£000
Other
£000
Total
£000
At 1 April 2023
1,276
50
1,326
Credited to profit
(86)
(59)
(145)
Credited to other comprehensive income
—
—
—
At 31 March 2024
1,190
(9)
1,181
The movement in the deferred tax liabilities during the prior year is shown below:
Accelerated
tax
depreciation
£000
Other
£000
Total
£000
At 1 April 2022
1,071
60
1,131
Charged to profit
205
—
205
Credited to other comprehensive income
—
(10)
(10)
At 31 March 2023
1,276
50
1,326
The deferred tax charged/(credited) to other comprehensive income during the year is as follows:
2024
£000
2023
£000
Tax on change in fair value of financial assets
—
(10)
Tax on items taken directly to other comprehensive income
—
(10)
13 Share capital
2024
£000
2023
£000
Allotted and fully paid 43,632,068 (2022 – 43,632,068) 10p ordinary shares
4,363
4,363
14 Pensions
Castings P.L.C. has no contractual agreement or stated policy for charging its subsidiary entities for the net defined benefit cost on an IAS 19
Employee Benefits measurement basis. Legally, Castings P.L.C. is the sponsoring employer for the plan, so it recognises the full defined benefit
cost or asset (where recoverable) in its financial statements. The last valuation was performed with the effective date of 6 April 2020. Further
details of the schemes are contained in note 5 to the group financial statements.
15 Capital commitments and contingencies
2024
£000
2023
£000
Contracted for but not provided in the financial statements
745
–
The company does not insure against the potential cost of product warranty or recall. Accordingly, there is always the possibility of claims
against the company for quality-related issues on parts supplied to customers. As at 31 March 2024, the directors do not consider any
significant liability will arise in respect of any such claims (2023 – £nil).
Notes to the Parent Company Financial Statements
continued
The Directors’ Report is on pages 21 to 23 of the Annual Report and Financial Statements
69
Castings P.L.C.
Annual Report for the year ended 31 March 2024
Strategic Report
Company Information
Notice of Meeting
Notice is hereby given that the one hundred and seventeenth Annual General Meeting of Castings P.L.C. (the ‘company’) will be held at Castings
P.L.C., Lichfield Road, Brownhills, WS8 6JZ on 20 August 2024 at 3.30 pm for the purposes set out below.
As ordinary business
1 To receive and adopt the Directors’ Report and audited financial statements for the year ended 31 March 2024.
2 To declare a final dividend.
3 To re-elect A. N. Jones as a director.
4 To re-elect A. Vicary as a director.
5 To re-elect S. J. Mant as a director.
6 To re-elect A. K. Eastgate as a director.
7 To re-elect M. L. Smith as a director.
8 To approve the Directors’ Remuneration Report for the year ended 31 March 2024.
9 To reappoint Forvis Mazars LLP as auditors of the company at a fee to be agreed with the directors.
As special business
To consider and, if thought fit, pass the following resolutions, of which resolution 10 will be proposed as an ordinary resolution and resolutions 11
and 12 will be proposed as special resolutions.
The share capital consists of 43,632,068 ordinary shares with voting rights.
As ordinary resolutions
10 THAT:
(a) the directors be and are hereby generally and unconditionally authorised in accordance with the Companies Act 2006 to exercise all
the powers of the company to allot relevant securities provided that the aggregate nominal value of such securities shall not exceed
£636,793, which represents approximately 14.6% of the current issued share capital of the company;
(b) the foregoing authority shall expire on 19 August 2029 save that the company may before such expiry make an offer or enter into an
agreement which would or might require relevant securities to be allotted after the expiry of such period and the directors may allot
relevant securities in pursuance of any such offer or agreement as if the authority conferred had not expired;
(c) the foregoing authority shall be in substitution for the authorities given to the directors under the Companies Act 2006 on
15 August 2023, which authorities are accordingly hereby revoked; and
(d) this authority will be put to annual shareholder approval.
As special resolutions
11 THAT the directors be and are hereby empowered pursuant to the Companies Act 2006 to allot equity securities (within the meaning of that
Act) for cash pursuant to the general authority conferred by the ordinary resolution numbered 10 set out in the notice convening this meeting
as if the said Act did not apply to any such allotment provided that this power shall be limited:
(a) to allotments in connection with an offer of equity securities to the ordinary shareholders of the Company where the securities respectively
attributable to the interests of such holders are proportionate (as nearly as may be and subject to such exclusions or other arrangement
as the directors may consider appropriate, necessary or expedient to deal with any fractional entitlements or with any legal or practical
difficulties in respect of overseas holders or otherwise) to the respective numbers of ordinary shares then held by such shareholders; and
(b) to the allotment (otherwise than pursuant to subparagraph (a) of this resolution) of equity securities having, in the case of relevant
shares, an aggregate nominal amount, or, in the case of other equity securities, giving the right to subscribe for or convert into relevant
shares having an aggregate nominal amount not exceeding £218,160, which represents approximately 5% of the current issued share
capital of the company,
and shall expire at the conclusion of the next Annual General Meeting following the date of this resolution save that the company shall be
entitled before such expiry to make an offer or agreement which would or might require equity securities to be allotted after such expiry and
the directors shall be entitled to allot equity securities in pursuance of such offer or agreement as if the power conferred hereby had not
expired. In any three year period no more than 7.5% of the issued share capital will be issued on a pre-emptive basis.
70
Castings P.L.C.
Annual Report for the year ended 31 March 2024
Castings P.L.C.
Castings P.L.C.
12 THAT the company be and is hereby generally and unconditionally authorised for the purposes of the Companies Act 2006 to make one or
more market purchases of any of its ordinary shares of 10p each (the ‘ordinary shares’), provided that:
(a) the maximum number of ordinary shares hereby authorised to be purchased is 4,358,844, representing 9.99% of the issued share
capital at 31 March 2024;
(b) the minimum price which may be paid for each ordinary share is 10p, exclusive of the expenses of purchase;
(c) the maximum price (exclusive of expenses) which may be paid for each ordinary share is an amount equal to 105% of the average of the
middle market quotations for the ordinary shares as derived from the Daily Official List of the London Stock Exchange Limited for the five
business days immediately preceding the day of purchase;
(d) unless previously revoked or varied, the authority hereby conferred shall expire at the conclusion of the next Annual General Meeting of
the company following the date of this resolution, unless such authority is renewed on or prior to such date;
(e) the company may, before the expiry of this authority, conclude a contract to purchase ordinary shares under this authority which will or
may be executed wholly or partly after such expiry and may make a purchase of ordinary shares pursuant to any such contract, as if
such authority had not expired.
The record date for payment of the final dividend is 19 July 2024. Assuming the final dividend is approved by the members, the dividend will be
paid on 23 August 2024.
Information about the meeting can be found on the company’s website (www.castings.plc.uk). The right to vote at the meeting is determined by
reference to the register of members as it stands on 16 August 2024.
By order of the board
S. J. Mant
Company Secretary
Registered Office:
Lichfield Road, Brownhills,
West Midlands, WS8 6JZ
12 June 2024
Note 1 - Proxy voting:
Any member of the company entitled to attend and vote at this meeting may appoint one or more proxies, who need not also be a member, to
attend and vote, on a poll, in their stead. The instrument appointing a proxy, including authority under which it is signed (or a notarially certified
copy of such authority), must be deposited at the offices of the company’s registrars: Link Group, PXS 1, Central Square, 29 Wellington Street,
Leeds, LS1 4DL, not less than 48 hours before the time appointed for the meeting.
CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service may do so for the Meeting
(and any adjournment of the Meeting) by using the procedures described in the CREST Manual (available from www.euroclear.com). CREST
Personal Members or other CREST sponsored members, and those CREST members who have appointed a service provider(s), should refer to
their CREST sponsor or voting service provider(s), who will be able to take the appropriate action on their behalf.
In order for a proxy appointment or instruction made by means of CREST to be valid, the appropriate CREST message (a ‘CREST Proxy
Instruction’) must be properly authenticated in accordance with Euroclear UK & International Limited’s specifications and must contain the
information required for such instructions, as described in the CREST Manual. The message must be transmitted so as to be received by the
issuer’s agent (ID RA10) by 3.30 pm on 16 August 2024. For this purpose, the time of receipt will be taken to mean the time (as determined by
the timestamp applied to the message by the CREST application host) from which the issuer’s agent is able to retrieve the message by enquiry
to CREST in the manner prescribed by CREST. After this time, any change of instructions to proxies appointed through CREST should be
communicated to the appointee through other means.
CREST members and, where applicable, their CREST sponsors or voting service providers should note that Euroclear UK & International Limited
does not make available special procedures in CREST for any particular message. Normal system timings and limitations will, therefore, apply in
relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member concerned to take (or, if the CREST member is a
CREST personal member, or sponsored member, or has appointed a voting service provider(s), to procure that their CREST sponsor or voting
service provider(s) take(s)) such action as shall be necessary to ensure that a message is transmitted by means of the CREST system by any
particular time. In this connection, CREST members and, where applicable, their CREST sponsors or voting system providers are referred, in
particular, to those sections of the CREST Manual concerning practical limitations of the CREST system and timings. The Company may treat as
invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a) of the Uncertificated Securities Regulations 2001.
Notice of Meeting
continued
71
Castings P.L.C.
Annual Report for the year ended 31 March 2024
Strategic Report
Company Information
Note 2 - Beneficial owners:
In accordance with Section 325 of the Companies Act 2006, the right to appoint proxies does not apply to persons nominated to receive
information rights under Section 146 of the Act.
Persons nominated to receive information rights under Section 146 of the Act who have been sent a copy of this notice of meeting are hereby
informed, in accordance with Section 149 (2) of the Act, that they may have a right under an agreement with the registered member by whom
they were nominated to be appointed, or to have someone else appointed, as a proxy for this meeting. If they have no such right, or do not wish
to exercise it, they may have a right under such an agreement to give instructions to the member as to the exercise of voting rights.
Nominated persons should contact the registered member by whom they were nominated in respect of these arrangements.
In accordance with Regulation 41 of the Uncertified Securities Regulations 2001, only those members entered on the company’s register
of members at the close of business on the day which is two working days before the day of the meeting or, if the meeting is adjourned,
shareholders entered on the company’s register of members at the close of business on the day two days before the date of any adjournment
shall be entitled to attend and vote at the meeting.
72
Castings P.L.C.
Annual Report for the year ended 31 March 2024
Castings P.L.C.
Castings P.L.C.
Directors, Officers and Advisers
Directors
A. N. Jones, BA (Hons), FCA Non-executive Chairman
A. Vicary, BEng, MSc, FICME Chief Executive Officer
S. J. Mant, BCom (Hons) FCA Finance Director
A. K. Eastgate, BA (Hons) Senior Independent Non-executive
M. L. Smith, BA Econ (Hons), FCA Non-executive
Secretary and
Registered Office
S. J. Mant, FCA
Lichfield Road,
Brownhills,
West Midlands, WS8 6JZ
Tel: 01543 374341
Fax: 01543 377483
Web: www.castings.plc.uk
Registrars
Link Group
10th Floor,
Central Square,
29 Wellington Street,
Leeds, LS1 4DL
Tel: 0371 664 0300 (Calls are charged at the standard
geographic rate and will vary by provider. Calls outside
the UK will be charged at the applicable international rate.
Lines are open 9.00 am to 5.30 pm Mon – Fri)
Email: shareholderenquiries@linkgroup.co.uk
Auditors
Forvis Mazars LLP (formerly Mazars LLP)
Two Chamberlain Square,
Birmingham, B3 3AX
Solicitors
Enoch Evans LLP
St Paul’s Chambers,
6/9 Hatherton Road,
Walsall,
West Midlands, WS1 1XS
Pinsent Masons LLP
55 Colmore Row,
Birmingham, B3 2FG
Bankers
HSBC Bank plc
49 Market Street,
Lichfield,
Staffordshire, WS13 6LB
Stockbrokers
Canaccord Genuity Limited
88 Wood Street
London
EC2V 7QR
Zeus Capital Limited
125 Old Broad Street
London
EC4N 1AR
Registered No.
91580
73
Castings P.L.C.
Annual Report for the year ended 31 March 2024
Strategic Report
Company Information
Shareholder Information
Capital gains tax
The official price of Castings P.L.C. ordinary shares on 31 March 1982, adjusted for bonus issues, was 4.92 pence.
Warning to shareholders
The following guidance has been issued by the Financial Conduct Authority:
Over the last year many companies have become aware that their shareholders have received unsolicited phone calls or correspondence
concerning investment matters. These are typically from overseas-based ‘brokers’ who target UK shareholders offering to sell them what often
turn out to be worthless or high risk shares in US or UK investments. They can be very persistent and extremely persuasive and a 2006 survey
by the then Financial Services Authority (FSA) has reported that the average amount lost by investors is around £20,000. It is not just the novice
investor that has been duped in this way; many of the victims had been successfully investing for several years. Shareholders are advised to be
very wary of any unsolicited advice, offers to buy shares at a discount or offers of free reports into the company.
If you receive any unsolicited investment advice:
• Make sure you get the correct name of the person and organisation.
• Check that they are properly authorised by the FCA before getting involved. You can check at http://www.fca.org.uk/register/
• The FCA also maintains on its website a list of unauthorised overseas firms who are targeting, or have targeted, UK investors and any
approach from such organisations should be reported to the FCA so that this list can be kept up to date and any other appropriate action
can be considered. If you deal with an unauthorised firm, you would not be eligible to receive payment under the Financial Services
Compensation Scheme.
• If the calls persist, hang up.
More detailed information on this or similar activity can be found on the FCA website www.fca.org.uk/consumers/scams
Website
Castings P.L.C.’s website www.castings.plc.uk gives additional information on the group. Notwithstanding the references we make in this Annual
Report to Castings P.L.C.’s website, none of the information made available on the website constitutes part of this Annual Report or shall be
deemed to be incorporated by reference herein.
74
Castings P.L.C.
Annual Report for the year ended 31 March 2024
Castings P.L.C.
Castings P.L.C.
75
Castings P.L.C.
Annual Report for the year ended 31 March 2024
Strategic Report
Company Information
The production of this report supports the work of the Woodland Trust,
the UK’s leading woodland conservation charity. Each tree planted will
grow into a vital carbon store, helping to reduce environmental impact as
well as creating natural havens for wildlife and people.
Castings P.L.C.
Lichfield Road
Brownhills
West Midlands
WS8 6JZ