TIDMCRPR
RNS Number : 3786W
Cropper(James) PLC
14 November 2017
James Cropper plc
(the "Company")
The advanced materials and paper products group, is pleased to
announce its
Half year results to 30 September 2017
Half year Half year Full year
to 30 September to 1 October to 1 April
2017 2016 2017
GBPm GBPm GBPm
Revenue 47.4 45.4 92.4
Adjusted operating profit (excluding
IAS19 impact) 3.0 2.6 6.9
Operating profit 2.7 2.3 6.2
Adjusted profit before tax (excluding
IAS19 impact) 2.8 2.4 6.6
Impact of IAS19 (0.5) (0.4) (0.9)
Profit before tax 2.3 2.0 5.6
Earnings per share - basic 23.1p 17.4p 50.5p
Earnings per share - diluted 22.9p 17.2p 50.0p
Dividend per share declared 2.5p 2.5p 11.8p
Net borrowings (4.7) (6.6) (7.3)
Equity shareholders' funds 23.4 16.0 21.9
Gearing % - before IAS 19 deficit 12% 19% 20%
Gearing % - after IAS 19 deficit 20% 41% 34%
Capital expenditure 1.3 2.1 5.3
Highlights
-- Adjusted PBT (prior to IAS 19 impact) at GBP2.8m, up 17% on prior year comparative
-- PBT at GBP2.3m, up 14% on prior year comparative
-- EPS (diluted) up 33% to 22.9p from 17.2p on prior year comparative
-- Revenue in TFP up 20% on prior year comparative. Total revenue up by 4.5%
-- TFP is benefitting from increased activity in the sales of products for fuel cells
-- Paper launches CupCycling(TM) and focused on strategy to develop mix
-- Paper endures high pulp prices and has remained resilient in the first half
-- 3DP launches Colourform(TM) and has commenced commercial orders
Mark Cropper, Chairman, commented:
"TFP has delivered its best ever sales performance for a half
year and is set to continue growth in the second half. Although
Paper is facing severe headwinds from the price of pulp this year,
it has so far remained resilient and I am confident that future
growth prospects continue to strengthen. 3DP is still at an early
stage but its potential is being proven with commercial contracts
and increasing interest in the sustainable and aesthetically
superior alternative it offers over plastic packaging.
Within the Group we continue to invest significantly in people,
markets, innovation and equipment. This will ensure that over the
long term the Group has the potential to sustain growth across all
its businesses. In the nearer term, the full year is expected to
deliver in line with the Board's expectations."
Enquiries:
Isabelle Maddock, Group Robert Finlay, Richard Johnson,
Finance Director Henry Willcocks
James Cropper PLC (AIM:CRPR.L) Stockdale Securities Limited
Telephone: +44 (0) 1539 Telephone: +44 (0) 20 7601 6100
722002
www.cropper.com www.stockdalesecurities.com
Half year Half year Full year
to 30 September to 1 October to 1
2017 2016 April
2017
Summary of results GBP'000 GBP'000 GBP'000
Revenue 47,446 45,397 92,363
Adjusted operating profit (excluding
IAS19 impact) 2,973 2,567 6,869
Operating profit 2,688 2,304 6,188
Adjusted profit before tax (excluding
IAS19 impact) 2,837 2,432 6,566
Impact of IAS19 (536) (407) (926)
Profit before tax 2,301 2,025 5,640
--------------------------------------- ----------------- -------------- ----------
Half year Half year Full year
to 30 September to 1 October to 1 April
2017 2016 2017
GBP'000 GBP'000 GBP'000
Revenue
James Cropper Paper 35,283 35,279 71,024
James Cropper 3D Products 43 - 7
Technical Fibre Products 12,120 10,118 21,332
---------------------------------------- ----------------- -------------- ------------
47,446 45,397 92,363
Adjusted operating profit (excluding
IAS19 impact) 2,973 2,567 6,869
Net interest (excluding IAS19 impact) (136) (142) (283)
---------------------------------------- ----------------- -------------- ------------
Adjusted profit before tax (excluding
IAS19 impact) 2,837 2,425 6,586
Exceptional costs - 7 (20)
---------------------------------------- ----------------- -------------- ------------
Adjusted profit before tax (excluding
IAS19 impact) 2,837 2,432 6,566
IAS19 pension adjustments
Net current service charge against
operating profits (285) (270) (661)
Finance costs charged against interest (251) (137) (265)
---------------------------------------- ----------------- -------------- ------------
(536) (407) (926)
---------------------------------------- ----------------- -------------- ------------
Profit before tax 2,301 2,025 5,640
---------------------------------------- ----------------- -------------- ------------
Balance sheet summary Half year Half year Full year
to 30 September to 1 October to 1
2017 2016 April 2017
GBP'000 GBP'000 GBP'000
Non-pension assets - excluding
cash 63,331 56,021 63,374
Non-pension liabilities - excluding
borrowings (20,519) (15,286) (18,503)
------------------------------------- ----------------- -------------- ------------
42,812 40,735 44,871
Net IAS19 pension deficit (after
deferred tax) (14,728) (18,072) (15,620)
------------------------------------- ----------------- -------------- ------------
28,084 22,663 29,251
Net borrowings (4,685) (6,621) (7,364)
------------------------------------- ----------------- -------------- ------------
Equity shareholders' funds 23,399 16,042 21,887
Gearing % - before IAS19 deficit 12% 19% 20%
Gearing % - after IAS19 deficit 20% 41% 34%
Capital expenditure 1,252 2,123 5,315
Dear Shareholders
I am pleased to report that James Cropper PLC recorded a 17%
increase in adjusted profit before tax (excluding the impact of IAS
19) of GBP2.8m for the first half of the current financial year.
This compares to GBP2.4m in the prior year. After the impact of
IAS19, profit before tax is GBP2.3m, up from GBP2m in the prior
comparative period. Meanwhile, Group revenues have increased by
4.5%.
The Group continues to experience increased pulp prices as first
noted at the AGM in July. Since then prices have continued to rise,
with corresponding impacts on margins in the Paper division.
Nevertheless, Paper has so far been able to sustain profit levels
compared to the prior year. Meanwhile, TFP profits have grown in
the period. Finally, 3DP has commenced full-scale production on
receipt of its first commercial contracts.
James Cropper Paper ("Paper")
Paper revenues have been maintained compared to the comparable
period last year, with the UK experiencing a small planned downturn
in sales and the US picking up contracts in digital and packaging,
which are delivering growth.
The paper division has recently launched CupCycling(TM), a
closed loop system which recycles post-consumer coffee cups into
luxury bags. Our launch partner for this new capability was
Selfridges and the offer is generating significant interest from
industry and customers.
As noted above, during the first half and into the second half,
pulp prices have placed downward pressure on our margins.
Accordingly, profit growth for this business for the full year will
be challenging.
Technical Fibre Products ("TFP")
TFP grew revenue by 20% over the comparable period last year.
Double digit growth was achieved in aerospace, defence and fuel
cell markets.
With regards to the latter, TFP supplies carbon fibre based
substrates, which are used as the basis for manufacturing GDL (Gas
Diffusion Layer) parts for fuel cells. TFP supplies substrate for
various fuel cell technologies predominantly in Europe and the USA.
After many years of development, this market is beginning to
deliver commercial products.
TFP has over 30 years of experience in designing and
manufacturing bespoke advanced non-woven materials for a variety of
end uses and market sectors and continues to see significant growth
potential through partnerships with corporations and institutions.
The group has outstanding technical and marketing expertise and
expects continued growth in the second half and beyond.
James Cropper 3D Products ("3DP")
3DP has launched Colourform(TM), a product range offering
renewable, recyclable moulded fibre packaging in almost limitless
colours, shapes and surface finishes. Colourform(TM) provides a
sustainable alternative to plastic packaging and is beginning to
catch the imagination of global and domestic brands.
The production lines are fulfilling a number of commercial
contracts which will aid this year's start up performance. The
Division has a larger number of projects in the development
pipeline. Capacity with existing production equipment is
satisfactory to meet initial demand however the Group fully expects
to invest further in due course as the attention and demand for the
differentiated product offer grows. The Board remains confident
that 3DP provides another significant growth platform for the
Group.
Pension
The Group operates three pension schemes with close to 60% of
employees holding a defined contribution personal payment plan. The
Group operates two funded pension schemes providing defined
benefits, for a decreasing number of its employees. The IAS19
valuations, for the defined benefit schemes as at 30 September
2017, revealed a combined deficit of GBP18.0m, compared with
GBP18.8m as at 1 April 2017. After deferred taxation the net
deficit stands at GBP14.7m.
Earnings per share and Dividend
Diluted earnings per share increased to 22.9 pence, compared to
17.2 pence in the prior year comparative period.
The Board have declared an interim dividend of 2.5p per share
(2016: 2.5p). The final dividend for the year to 31 March 2018 will
be subject to shareholder approval at the AGM on 25 July 2018.
Outlook
TFP has delivered its best ever sales performance for a half
year and is set to continue growth in the second half. Although
Paper is facing severe headwinds from the price of pulp this year,
it has so far remained resilient and I am confident that future
growth prospects continue to strengthen. 3DP is still at an early
stage but its potential is being proven with commercial contracts
and increasing interest in the sustainable and aesthetically
superior alternative it offers over plastic packaging.
Within the Group we continue to invest significantly in people,
markets, innovation and equipment. This will ensure that over the
long term the Group has the potential to sustain growth across all
its businesses. In the nearer term, the full year is expected to
deliver in line with the Board's expectations.
Mark Cropper
Chairman
JAMES CROPPER PLC
UN-AUDITED STATEMENT OF COMPREHENSIVE INCOME
26 week period 26 week period 52 week period
to 30 September to 1 October to 1 April
2017 2016 2017
---------------------------------------- ---------------- -------------- --------------
GBP'000 GBP'000 GBP'000
Continuing operations
Revenue 47,446 45,397 92,363
---------------------------------------- ---------------- -------------- --------------
Operating profit 2,688 2,304 6,188
Finance costs
Interest payable and similar charges (391) (279) (548)
Interest receivable and similar
income 4 - -
Profit before taxation 2,301 2,025 5,640
Taxation (112) (405) (910)
---------------------------------------- ---------------- -------------- --------------
Profit for the period 2,189 1,620 4,730
Earnings per share - basic 23.1p 17.4p 50.5p
Earnings per share - diluted 22.9p 17.2p 50.0p
Dividend declared in the period
- pence per share 2.5p 2.5p 11.8p
OTHER COMPREHENSIVE INCOME
Profit for the period 2,189 1,620 4,730
---------------------------------------- ---------------- -------------- --------------
Items that are or may be reclassified
to profit or loss
Foreign currency translation 55 189 224
Loss on interest rate hedge - - (9)
Items that will never be reclassified
to profit or loss
Retirement benefit liabilities -
actuarial gain/(loss) 689 (14,715) (11,386)
Deferred tax on actuarial (gain)/loss
on retirement benefit liabilities (124) 2,796 1,847
Income tax on other comprehensive
income - - -
---------------------------------------- ---------------- -------------- --------------
Other comprehensive income/(expense)
for the year 620 (11,730) (9,324)
---------------------------------------- ---------------- -------------- --------------
Total comprehensive income for the
period attributable to equity holders
of the Company 2,809 (10,110) (4,594)
---------------------------------------- ---------------- -------------- --------------
JAMES CROPPER PLC
UN-AUDITED STATEMENT OF FINANCIAL POSITION
30 September 1 October 1 April
2017 2016 2017
GBP'000 GBP'000 GBP'000
------------------------------- ------------- --------------- ----------------
Assets
Intangible assets 509 126 569
Property, plant and equipment 26,369 24,932 26,572
Deferred tax assets 2,303 2,901 2,270
------------------------------- ------------- --------------- ----------------
Total non- current assets 29,181 27,959 29,411
------------------------------- ------------- --------------- ----------------
Inventories 14,471 14,354 14,097
Trade and other receivables 21,982 16,609 23,066
Cash and cash equivalents 5,911 3,426 1,921
Total current assets 42,364 34,389 39,084
------------------------------- ------------- --------------- ----------------
Total assets 71,545 62,348 68,495
------------------------------- ------------- --------------- ----------------
Liabilities
Trade and other payables 19,660 13,563 18,493
Other financial liabilities 10 - 9
Loans and borrowings 1,001 792 1,570
Current tax liabilities (81) 385 1
------------------------------- ------------- --------------- ----------------
Total current liabilities 20,590 14,740 20,073
------------------------------- ------------- --------------- ----------------
Long-term borrowings 9,595 9,255 7,715
Retirement benefit liabilities 17,961 22,311 18,820
Total non-current liabilities 27,556 31,566 26,535
------------------------------- ------------- --------------- ----------------
Total liabilities 48,146 46,306 46,608
------------------------------- ------------- --------------- ----------------
Equity
------------------------------- ------------- --------------- ----------------
Share capital 2,370 2,364 2,367
Share premium 1,472 1,465 1,472
Translation reserve 657 567 602
Reserve for own shares (970) (651) (853)
Retained earnings 19,870 12,297 18,299
------------------------------- ------------- --------------- ----------------
Total shareholders' equity 23,399 16,042 21,887
------------------------------- ------------- --------------- ----------------
Total equity and liabilities 71,545 62,348 68,495
------------------------------- ------------- --------------- ----------------
JAMES CROPPER PLC
UN-AUDITED STATEMENT OF CASH FLOWS
26 week period 26 week period 52 week period
to 30 September to 1 October to 1 April
2017 2016 2017
--------------------------------------------- ---------------- -------------------------- ---------------------
GBP'000 GBP'000 GBP'000
Cash flows from operating activities
Net profit 2,189 1,620 4,730
Adjustments for:
Tax 112 405 910
Depreciation and amortisation 1,363 1,099 2,297
Net IAS 19 pension adjustments within
Statement of comprehensive income 536 407 926
Past service pension deficit payments (706) (681) (1,362)
Foreign exchange differences 38 112 84
Loss on disposal of property, plant
and equipment - 15 14
Profit on disposal of investments - (178) -
Net bank interest expense 136 142 282
Share based payments 186 142 283
Changes in working capital:
(Increase) / decrease in inventories (408) (150) 105
Decrease / (increase) in trade and other
receivables 408 2,971 (4,113)
Increase / (decrease) in trade and other
payables 1,363 (1,526) 3,932
Interest received 5 1 2
Interest paid (140) (148) (293)
Tax paid (356) (657) (1,081)
--------------------------------------------- ---------------- -------------------------- ---------------------
Net cash generated from operating activities 4,726 3,574 6,716
Cash flows from investing activities
Purchase of intangible assets (19) - (486)
Purchases of property, plant and equipment (1,253) (2,123) (4,828)
Profit on disposal of investments - 178 -
Proceeds from sale of property, plant
and equipment - 2 4
Net cash used in investing activities (1,272) (1,943) (5,310)
Cash flows from financing activities
Proceeds from issue of ordinary shares 3 444 454
Proceeds from issue of new loans 2,456 2,451 2,450
Repayment of borrowings (903) (3,179) (4,115)
Purchase of LTIP investments (117) (479) (510)
Dividends paid to shareholders (864) (648) (881)
--------------------------------------------- ---------------- -------------------------- ---------------------
Net cash generated / (used) in financing
activities financingactactivitiesactivities 575 (1,411) (2,602)
Net increase / (decrease) in cash and
cash equivalents 4,029 220 (1,196)
Effect of exchange rate fluctuations
on cash held (39) 20 (69)
--------------------------------------------- ---------------- -------------------------- ---------------------
Net increase / (decrease) in cash and
cash equivalents 3,990 240 (1,265)
Cash and cash equivalents at the start
of the period 1,921 3,186 3,186
Cash and cash equivalents at the end
of the period 5,911 3,426 1,921
Cash and cash equivalents consists of:
Cash at bank and in hand 5,911 3,426 1,921
--------------------------------------------- ---------------- -------------------------- ---------------------
JAMES CROPPER PLC
STATEMENT OF CHANGES IN EQUITY
Share Share Translation
capital premium reserve Own shares Retained earnings Total
------------------ ---------- ----------------- ---------------- ------------- ------------------ --------------
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------ ---------- ----------------- ---------------- ------------- ------------------ --------------
2 April 2016 2,306 1,079 378 (343) 23,273 26,693
Profit for the
period - - - - 4,730 4,730
Exchange
differences - - 224 - - 224
Actuarial losses
on retirement
benefit
liabilities (net
of
deferred tax) - - - - (9,539) (9,539)
Loss on interest
rate hedge - - - - (9) (9)
------------------ ---------- ----------------- ---------------- ------------- ------------------ --------------
Total other
comprehensive
income - - 224 - (9,548) (9,548)
Dividends paid - - - - (881) (881)
Share based
payment charge - - - - 283 283
Tax on share
options - - - - 634 634
Proceeds from
issue of ordinary
shares 61 393 - - - 454
Distribution of
own shares - - - 192 (192) -
Consideration paid
for own
shares - - - (702) - (702)
------------------ ---------- ----------------- ---------------- ------------- ------------------ --------------
Total
contributions by
and
distributions to
owners of
the Group 61 393 - (510) (156) (212)
------------------ ---------- ----------------- ---------------- ------------- ------------------ --------------
At 1 April 2017 2,367 1,472 602 (853) 18,299 21,887
Profit for the
period - - - - 2,189 2,189
Exchange
differences - - 55 - - 55
Actuarial gains on
retirement
benefit
liabilities (net
of
deferred tax) - - - - 565 565
Total other
comprehensive
income - - 55 - 565 620
Dividends paid - - - - (864) (864)
Share based
payment charge - - - - 183 183
Proceeds from
issue of ordinary
shares 3 - - - - 3
Distribution of
own shares - - - 324 (502) (178)
Consideration paid
for own
shares - - - (441) - (441)
------------------ ---------- ----------------- ---------------- ------------- ------------------ --------------
Total
contributions by
and
distributions to
owners of
the Group 3 - - (117) (1,183) (1,297)
------------------ ---------- ----------------- ---------------- ------------- ------------------ --------------
At 30 September
2017 2,370 1,472 657 (970) 19,870 23,399
------------------ ---------- ----------------- ---------------- ------------- ------------------ --------------
JAMES CROPPER PLC
NOTES TO THE UN-AUDITED INTERIM RESULTS
1. Basis of the preparation of IFRS financial information
a. These interim results have been prepared in accordance with
the historical cost convention, as modified by the revaluation of
land and buildings, and derivative financial instruments, and in
accordance with International Financial Reporting Standards
("IFRS") as adopted by the European Union (with the exception of
IAS 34, Interim Financial Reporting) and International Financial
Reporting Interpretation Committee ("IFRIC") interpretations and
those parts of the Companies Act 2006 applicable to companies
reporting under IFRS.
All references to:
Non GAAP measures "(excluding IAS19 impact)" have been used to
understand and compare the performance of the Group excluding the
volatility of the pension adjustments under IAS19.
b. The Group's policy is to maintain the ability to continue as
a going concern, in order to provide returns to the shareholder and
benefits to other stakeholders. Accordingly the going concern basis
has been adopted in preparing these interim results.
2. Interim Statement
a. The summarised results for the half-year to 30 September
2017, which have not been audited or reviewed, have been prepared
in accordance with the accounting policies adopted in the accounts
for the 52 week year ended 1 April 2017.
b. The financial information set out above does not constitute
statutory accounts within the meaning of the Companies Act 2006.
The figures for the 52 week year ended 1 April 2017 are an extract
of the full accounts for that year, which have been filed with the
Registrar of Companies and on which the auditors gave an
unqualified opinion.
c. A copy of the interim statement is available on our website (www.cropper.com).
3. Earnings per share
Basic earnings per share for the half year to 30 September 2017
have been calculated by dividing the profits attributable to
ordinary shareholders by 9,470,339 (2016: 9,284,126) ordinary
shares, being the weighted average number of ordinary shares during
the period.
4. Dividend
A net interim dividend of 2.5p per Ordinary Share (2016: 2.5p
per share) will be paid on 12 January 2018 to holders on the
register at the close of business on 30 November 2017, with the
last day for DRIP elections being 15 December 2017. The dividend
relating to the 52 week year to 1 April 2017 was made up of an
interim payment of GBP233,000 (2.5p per share) and a final dividend
payment of GBP864,000 (9.3p per share). The dividend is payable in
cash. Shareholders have the opportunity to elect to reinvest their
cash dividend and purchase existing shares in the Company through a
Dividend Reinvestment Plan.
5. Pensions
IAS19 regards a sponsoring company and its pension schemes as a
single accounting entity rather than two or more separate legal
entities. The actuarial valuation is the starting point for the
creation of the IAS19 accounting entity. The valuation determines
the net position of a pension scheme, i.e. the difference between
its assets and liabilities. The net position, surplus or deficit,
is brought onto the sponsoring company's statement of financial
position such that Reserves are immediately adjusted by the net
position reduced by deferred tax. This obviously results in either
an increase or decrease in the net asset value of the sponsoring
company. At subsequent period-ends the movement in value from the
previous valuation is expressed in the following component
parts:
Statement of comprehensive income
Operating costs
Current service charge, being the cost of benefits earned in the
current period shown net of employees' contributions.
-- Past service costs, being the costs of benefit
improvements.
-- Curtailment and settlement costs.
Finance costs, being the net of
-- Expected return on pension scheme assets.
-- Interest cost on the accrued pension scheme liabilities.
Other comprehensive income
Actuarial gains and losses arising from variances against
previous actuarial assumptions.
The above items are offset by actual contributions paid by the
employer in the period.
IAS19 deficits are shown below at the corresponding financial
position dates.
Half year Full year
IAS19 Deficit to Half year to to
30 September 1 October
2017 2016 1 April 2017
------------------------------------------------- ----------------- ----------------- -----------------
GBP'000 GBP'000 GBP'000
Current service charge (587) (534) (1,190)
Future service contributions paid 302 264 529
Net impact on operating profit (285) (270) (661)
Finance costs (251) (137) (265)
Net impact on profit and loss account (536) (407) (926)
Past service deficit contributions paid 706 681 1,362
Actuarial (losses) / gains 689 (14,715) (11,386)
Opening deficit (18,820) (7,870) (7,870)
Closing deficit (17,961) (22,311) (18,820)
Deferred taxation 3,233 4,239 3,200
Net deficit (14,728) (18,072) (15,620)
------------------------------------------------- ----------------- ----------------- -----------------
It should be noted that the assumptions underlying the IAS19
valuation are based on financial conditions at the financial
position date. As market values of the scheme assets and the
discount factors applied to the scheme liabilities will fluctuate,
this method of valuation will often lead to large variations in the
"pension balance" from period to period. Pension liabilities are
discounted at the current rate of return on an AA rated quality
corporate bond of equivalent currency and term. The actual
contributions paid by the Group to its two final salary schemes are
determined by the actuaries' "on-going" valuation.
Half year Full year
Profit before tax to Half year to to
30
September
2017 1 October 2016 1 April 2017
--------------------------------------------- ---------------- --------------------- ----------------
GBP'000 GBP'000 GBP'000
Adjusted profit before tax prior to
IAS 19 2,837 2,432 6,566
Net pension adjustment
Current service charge (587) (534) (1,190)
Future service contributions paid 302 264 529
Net impact on operating profit (285) (270) (661)
Finance costs (251) (137) (265)
Net impact on profit before tax (536) (407) (926)
Profit before tax 2,301 2,025 5,640
--------------------------------------------- ---------------- --------------------- ----------------
This information is provided by RNS
The company news service from the London Stock Exchange
END
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