TIDMCRPR
RNS Number : 2585D
Cropper(James) PLC
25 June 2019
James Cropper PLC
The advanced materials and paper products Group, is pleased to
announce its
Preliminary results for the 52 weeks ended 30 March 2019
52 weeks
52 weeks ended
ended 30 31 March
March 2019 2018
GBPm GBPm
Revenue 101.1 96.3
Adjusted operating profit (excluding
IAS19 impact) 4.3 6.1
Operating profit 3.4 5.4
Adjusted profit before tax (excluding
IAS19 impact) 4.0 5.8
Impact of IAS19 (1.4) (1.3)
Profit before tax 2.6 4.5
Earnings per share - basic 24.3p 43.3p
Dividend per share declared 13.5p 13.5p
Net borrowings (8.6) (4.8)
Equity shareholders' funds 21.3 23.3
Gearing % - before IAS 19 deficit 21% 12%
Gearing % - after IAS 19 deficit 40% 21%
Capital expenditure 5.2 1.9
Highlights
-- Group revenue exceeds GBP100m for the first time with growth in all divisions.
-- Adjusted PBT (excluding IAS 19 impact) at GBP4.0m
-- Continued higher pulp prices over 2019 impacting profitability for the year.
-- Paper to become more resilient to pulp market, delivering profitable growth.
-- TFP on schedule to add 50 % capacity.
-- Colourform: major contracts have gone live since the period end.
-- Dividend maintained at 13.5p.
Mark Cropper, Chairman, commented:
"The strength of the Group remains strong with record revenues,
product mix improvements, investment on the increase and sound
EBITDA levels providing clear headroom against our covenants."
"For the second year in succession pulp prices have outstripped
market expectations, increasing cost pressures on our paper
business by over GBP6.5m over two years."
"I remain confident that we are deploying and evolving the right
strategies in this regard and this will ensure sustained - and
sustainable - growth for the long term."
Enquiries:
Isabelle Maddock, Group Robert Finlay, Richard Johnson,
Finance Director Henry Willcocks
James Cropper PLC (AIM:CRPR.L) Shore Capital
Telephone: +44 (0) 1539 Telephone: +44 (0) 20 7601 6100
722002
www.cropper.com
The Annual General Meeting of the Company will be held at
11.00am on Wednesday 31 July 2019 at the Bryce Institute,
Burneside, Kendal, Cumbria.
52 weeks ended 52 weeks ended
30 March 2019 31 March 2018
Summary of results GBP'000 GBP'000
Revenue 101,095 96,312
Adjusted operating profit (excluding
IAS19 impact) 4,262 6,133
Adjusted profit before tax (excluding
IAS19 impact) 3,962 5,825
Impact of IAS19 (1,386) (1,284)
Profit before tax 2,576 4,541
--------------------------------------- --------------- ---------------
52 weeks ended 52 weeks ended
30 March 2019 31 March 2018
GBP'000 GBP'000
Revenue
James Cropper Paper 74,318 71,237
James Cropper 3D Products 290 166
Technical Fibre Products 26,487 24,909
---------------------------------------- --------------- ---------------
101,095 96,312
Adjusted operating profit (excluding
IAS19 impact) 4,262 6,133
Net interest (excluding IAS19 impact) (300) (308)
---------------------------------------- --------------- ---------------
Adjusted profit before tax (excluding
IAS19 impact) 3,962 5,825
IAS19 pension adjustments
Net current service charge against
operating profits (854) (695)
Finance costs charged against interest (532) (589)
---------------------------------------- --------------- ---------------
(1,386) (1,284)
---------------------------------------- --------------- ---------------
Profit before tax 2,576 4,541
---------------------------------------- --------------- ---------------
The IAS 19 pension adjustments are explained in detail in the
Financial Review section of the Annual Report. The total amount
excluded from the IAS pension Charge is GBP1,386,000 (2018:
GBP1,284,000). The adjustment, which we refer to in these accounts
as the "IAS 19 impact" represents the diff
erence between the pension charge as calculated under IAS 19 and
the cash contributions for the current service cost only as
determined by the latest triennial valuation. The Directors
consider that the adjusted pension charge better reflects the
actual pension costs for ongoing service compared to the IAS 19
charge. This adjustment is made internally when we assess
performance and is also used in the EBITDA and EPS targets used in
management incentive schemes
The IAS 19 pension adjustment GBP1,386,000 (2018: GBP1,284,000)
comprises:
Period ended 30 March Period ended 31 March
2019 2018
GBP'000 GBP'000
Current service
charge 1,423 1,285
Normal contributions (569) (590)
Interest charge 532 589
--------------------------- ---------------------- ----------------------
IAS 19 pension adjustment 1,386 1,284
--------------------------- ---------------------- ----------------------
Balance sheet summary As at 30 March As at 31 March
2019 2018
GBP'000 GBP'000
Non-pension assets - excluding
cash 64,871 59,899
Non-pension liabilities - excluding
borrowings (16,236) (15,585)
------------------------------------- --------------- ---------------
48,635 44,314
Net IAS19 pension deficit (after
deferred tax) (18,798) (16,162)
------------------------------------- --------------- ---------------
29,837 28,152
Net borrowings (8,561) (4,806)
------------------------------------- --------------- ---------------
Equity shareholders' funds 21,276 23,346
Gearing % - before IAS19 deficit 21% 12%
Gearing % - after IAS19 deficit 40% 21%
Capital expenditure 5,229 1,935
Chairman's Letter
Dear Shareholders,
This has been another challenging year for the Group, with
profit before tax falling by 43% to GBP2.6m. As detailed in the
Finance Director's review section of the Annual Report, the
dominant headwind has continued to be pulp cost increases. For the
second year in succession these have outstripped market
expectations, increasing cost pressures on our Paper business by
over GBP6.5m over two years. It has been impossible to pass all of
this on within the timeframes, resulting in a loss for Paper of
GBP2m in the current period. In addition, Group profits have also
been weakened by operating losses within James Cropper 3D Products
Ltd ("3DP"), incurred as we scale up our investment to meet
anticipated demand for this new subsidiary.
Nevertheless, the strength of the Group remains strong with
record revenues, product mix improvements delivering good
underlying performance, investment on the increase and sound EBITDA
levels providing clear headroom against our covenants. I am
particularly pleased to report increased profits within Technical
Fibre Products Ltd ("TFP"), with operating profit growing by almost
20% to GBP8.8m, another record for this subsidiary. This was
underpinned by revenue growth of 6.3% which itself was spread
across all products and markets.
Coupled with positive revenue growth of 4.3% for Paper, Group
turnover exceeded GBP100m for the first time. Positively, the
growing demand for our products continues to become more global.
Exports edged upwards to 56.3% in the current year, although this
only tells part of the story: the growth of many of our UK
customers has also been export driven, further shielding us from
any potential Brexit related weakness in our domestic market.
A positive sense of the progress of the Group can also be gained
from a walk around our Burneside site, home to the majority of
operations. In the last year we have increased 3DP capacity by 50%
and commenced construction of a new TFP machine house, the most
significant addition to our operations in 25 years. Both have
required reorganisation of other areas, furthering the overall
level of activity. There are also more mundane indicators, such as
growth in parking provision and a fleet of new trucks in our
distinctive green livery. Burneside truly feels like a place on the
move.
Rather harder to gauge are all the internal changes in hand,
both commercial and operational. Based on the numerous plans in
place, I am confident Paper will be restored to profitability in
the current financial year and advance thereafter. As well as
working carefully with our long term customers to recover margin,
Paper is also winning new contracts at improved margins, not least
to meet the retail packaging needs of global brands.
Our sustainability credentials are helping in this regard, not
least our CupCyclingä papers. Coffee cup waste continues to grow as
a source of fibre, and greater use is forecast, supported by
internal investment as well as initiatives led by retailers and
waste management companies. This is just a start: our Technology
& Innovation department is leading a forensic investigation of
other sources of waste and related technologies that will
hopefully, in time, reduce our reliance on pulp as well as our
overall environmental impact. Our footprint will also shortly be
lessened by the second rooftop solar installation to be delivered
by our partners Burneside Community Energy Ltd. This will double
on-site renewable electricity generation.
3DP did not grow as quickly as hoped in the year, owing to the
timing of its first significant contracts, but the business is now
moving rapidly beyond proof of concept. While the business is
bringing exceptional quality and colour to market, transitioning
customers from existing packaging options (not least plastic) is
taking longer than anticipated. Nevertheless we continue to see
great potential, not least in the beauty and cosmetics market. The
target is for the business to be cash flow neutral in the current
financial year and it will grow to become a significant division
for the Group.
TFP continues to advance in aerospace and automotive fuel cell
markets with new major contracts agreed and research into
lightweight solutions and emerging technologies high on the agenda.
We continue to invest in our US and UK research facilities,
enhancing TFP's global reputation for quality and technical
expertise, and its unique ability to understand, interpret and
deliver on customer needs. TFP is well positioned to continue to
grow robustly.
Dividend per share
The Board is recommending a final dividend of 11.0 pence per
share, bringing the total dividend for the financial period of 13.5
pence per share.
Basic earnings per share in the period fell by 44% to 24.3 pence
per share with diluted earnings per share falling by 43% to 24.3
pence per share.
The recommendation to maintain the dividend directly reflects
the confidence the Board continues to have in the Company's
prospects in the coming years.
Outlook
For all the headwinds of the last two years, not to mention the
uncertainty surrounding Brexit, I am pleased to say our long-term
aspirations are undiminished. With an eye to the long term, we
believe we can be the best in the world at what we do and have kept
investment and related recruitment plans on track in support of
this, the latter closely tied to apprenticeship and graduate
programmes.
There is also much more we can do. Our most valuable asset is
our people. Everyone matters in this business and we will only
truly succeed if we support each other, and the communities that
sustain us, every day. Our work over the last year on the
importance of mental health is but one example of this. We have
much more to do but our people show us the way. As I witnessed at
our annual Pride Awards earlier this year, every thought and idea,
however small, can make a difference.
Likewise, albeit on a different note, we will only secure our
future as a business if we balance our outputs with the impacts
that we, together with the rest of mankind, are having on our
planet. We are justly proud of the contribution made by initiatives
such as Colourformä and CupCyclingä, but if we are to truly respond
to the emergency represented by climate change and declining
biodiversity we must do much, much more.
Overall, as we enter our 175(th) year, I feel the business is
not getting older so much as younger. That our brightest prospects
are ahead of us is also suggested by the sustained growth of
R&D investment in recent years. The Board and I are ambitious
for our culture of innovation to become even more embedded within
each business and function across the Group as it is this that will
ultimately ensure our long term success, whether in relation to our
products, people or planet. I remain confident that we are
deploying and evolving the right strategies in this regard and this
will ensure sustained - and sustainable - growth for the long
term.
Mark Cropper
Chairman
24 June 2019
Chief Executive's Review
I was pleased to see continued sales growth across each division
with the Group now exceeding GBP100 million sales for the first
time.
In the period pulp price has continued to increase from the
highs of the previous period, raising the overall impact from pulp
price to over GBP6.5 million over the past two years. This has
impacted the paper division however the underlying performance
remains healthy with the progression of an improved value
portfolio.
The performance of the Technical Fibre Products division ("TFP")
has continued to strengthen with growth across each sector and the
results demonstrating another record achievement.
We have continued to invest in James Cropper 3DP ("3DP") adding
further capability and capacity. Whilst this has added to the
operating costs, it positions the business well as larger
commercial contracts are now becoming a reality.
Group profit before tax was GBP2.6m, compared to GBP4.5m in the
prior period.
Revenue and Operating Profit
Group revenue for the financial period was GBP101.1m, up 5% on
the prior period.
Revenue for James Cropper Paper grew by 4.3% in the period to
GBP74.3m with the division generating an operating loss of GBP1.9m,
compared to an operating profit of GBP1.5m in the prior period.
Revenue for TFP grew by 6.3% in the period to GBP26.5m and
operating profit up 19% at GBP8.9m. The performance of TFP has
continued to strengthen with growth across each sector and the
results demonstrating another record achievement.
Research and development
Research and development is a fundamental part of our growth
strategy, adding to our capability, maintaining our competitiveness
and bringing new product lines into our target markets. Some
examples of the research and development work undertaken are
explained in the Innovation section below. The Group continues to
invest in research and development with expenditure in R & D of
GBP4.0m this period, compared to GBP2.6m in the prior period.
Growth build from solid foundations
Whilst each business has a unique growth plan, common strategic
themes sit at the heart of each plan.
A combination of product and process innovation, technological
and capital investment, process and application lead sustainability
and the skills and knowledge of our employees build the growth
plans of each business.
A Long-term view on Growth
Over many decades James Cropper have provided a focus on the
long-term growth of the Company. Today this remains unchanged with
all key strategic decisions aligned to the medium to long term
growth of the Company.
James Cropper are specialists with each business providing niche
solutions in our chosen markets, such as materials essential for a
hydrogen fuel cell, a bespoke colour and texture for a luxury
brand's packaging, or 3D modelling a sustainable alternative to
single use plastics. Our relentless focus on being the best in our
field and driving innovation is at the heart of our Company.
Over the past year we have seen growth across each business. TFP
continues to experience organic growth across each sector and
geography, leading to our next stage of capacity expansion due in
mid-2020. Paper's focus on value has delivered growth within chosen
markets such as packaging and has been awarded new key contracts
from luxury brands.
Colourform has been commercialising the pipeline and whilst
supporting existing contracts they have been awarded more
significant contracts supporting the global cosmetics market.
Innovation
Over 15% of James Cropper's employees are involved with research
and development activities and the company has invested over GBP8
million in the last 3 years.
Some examples of recent developments include: -
-- TFP have developed advanced particulate and fibre metallised
coatings to enhance shielding and conductivity properties without
compromising weight.
-- Colourform have invested in the latest 3D modelling design
capability allowing seamless product design, computer aided design
and computer aided manufacture for tool production in order to
create high quality and complex moulded fibre products.
-- Paper have developed an environmentally friendly whitening
process to lighten consumer waste providing it with a new lease of
life as high-quality fine paper.
Investment
The Company has a strong history of targeted strategic
investments to implement technology, supporting both product and
process developments aligned to each business's growth plans.
Recent investments include production capacity expansion for
Colourform, specialist cutting technology for Paper and increased
TFP capacity for particle plating.
Moving forward further strategic investments are planned and
include increased independence from commodity pulp prices with the
expansion of Paper's coffee cup recycling capability and additional
finishing capacity to support a higher value portfolio, an
additional non-woven production line in TFP increasing capacity by
50% and in Colourform the capability to rapid prototype.
Sustainability
Sustainability sits at the heart of each business. Paper and
Colourform provide recyclable, reusable and compostable solutions
in a 'single-use' market, whilst TFP plays a vital role in
providing lightweight solutions for transportation and materials
used in green energy such as wind and hydrogen fuel cells.
We are constantly improving our manufacturing processes in order
to use less energy and water. Our demand is partially met using
hydro and solar energy, but our ambition is to incorporate new and
emerging technologies to drive towards carbon neutrality.
James Cropper continues to receive widespread industrial
recognition for its work on sustainability, from luxury packaging
awards to public recognition from HRH The Prince of Wales.
People
Employees over the generations have built a strong culture of
loyalty and care for the products we produce and the community we
support. The Company's approach to building skills and talent can
be seen at all levels. There are now over 30 employees who are in
the process of, or have completed, apprenticeships across multiple
disciplines including finance, marketing, HR and engineering.
The graduate intake programme now benefits each business
supported by regular recruitment programmes working with high
performing universities.
The annual Pride Awards celebrate employees going "above and
beyond" demonstrating significant improvements, creativity and
selflessly giving time to good causes.
Over the past year the Company has invested in dedicated
trainers to support Mental Health. This has resulted in nearly 50
mental health first aiders and over 20 health advocates.
These programmes together with a strong emphasis on training and
development underpin all of our initiatives to grow the
Company.
Phil Wild
Chief Executive Officer
24 June 2019
CONSOLIDATED INCOME STATEMENT
52 week period 52 week period
to 30 March to 31 March
2019 2018
----------------------------------------- -------------- --------------
GBP'000 GBP'000
Revenue 101,095 96,312
Other income 614 346
Changes in inventories of finished goods
and work in progress 798 767
Raw materials and consumables used (43,074) (40,661)
Energy costs (5,615) (4,021)
Employee benefit costs (28,183) (27,314)
Depreciation and amortisation (2,952) (2,678)
Other expenses (19,275) (17,313)
----------------------------------------- -------------- --------------
Operating Profit 3,408 5,438
Interest payable and similar charges (965) (908)
Interest receivable and similar income 133 11
Profit before taxation 2,576 4,541
Taxation (262) (451)
----------------------------------------- -------------- --------------
Profit for the period 2,314 4,090
Earnings per share - basic 24.3p 43.3p
Earnings per share - diluted 24.3p 43.0p
OTHER COMPREHENSIVE INCOME
Profit for the period 2,314 4,090
-------------------------------------------- -------- ------
Items that are or may be reclassified
to profit or loss
Exchange differences on translation of
foreign operations (117) (82)
Cash flow hedges - effective portion
of changes in fair value (29) 57
Items that will never be reclassified
to profit or loss
Retirement benefit liabilities - actuarial
(losses) / gains (3,258) 2,593
Deferred tax on actuarial losses / (gains)
on retirement benefit liabilities 554 (441)
Income tax on other comprehensive income - 91
-------------------------------------------- -------- ------
Other comprehensive (expense) / income
for the period (2,850) 2,218
-------------------------------------------- -------- ------
Total comprehensive (expense) / income
for the period
Attributable to equity holders of the
Company (536) 6,308
-------------------------------------------- -------- ------
STATEMENT OF FINANCIAL POSITION
Group Company
As at As at As at As at
30 March 2019 31 March 2018 30 March 2019 31 March 2018
GBP'000 GBP'000 GBP'000
------------------------------- -------------- --------------- --------------- ----------------
Assets
Intangible assets 365 496 106 112
Property, plant and equipment 27,639 25,113 1,906 1,732
Investments in subsidiary
undertakings - - 7,350 7,350
Deferred tax assets 2,234 2,053 3,840 3,649
------------------------------- -------------- --------------- --------------- ----------------
Total non-current assets 30,238 27,662 13,202 12,843
------------------------------- -------------- --------------- --------------- ----------------
Inventories 16,410 14,854 - -
Trade and other receivables 19,012 18,522 49,323 45,651
Other financial assets 24 47 24 47
Cash and cash equivalents 2,352 5,557 - 3,004
Current tax assets 1,421 867 446 530
Total current assets 39,219 39,847 49,793 49,232
------------------------------- -------------- --------------- --------------- ----------------
Total assets 69,457 67,509 62,995 62,075
------------------------------- -------------- --------------- --------------- ----------------
Liabilities
Trade and other payables 14,620 14,328 18,555 21,823
Loans and borrowings 1,545 1,600 361 43
Total current liabilities 16,165 15,928 18,916 21,866
------------------------------- -------------- --------------- --------------- ----------------
Long-term borrowings 9,368 8,763 4,004 4,070
Retirement benefit liabilities 22,648 19,472 22,648 19,472
Total non-current liabilities 32,016 28,235 26,652 23,542
------------------------------- -------------- --------------- --------------- ----------------
Total liabilities 48,181 44,163 45,568 45,408
------------------------------- -------------- --------------- --------------- ----------------
Equity
------------------------------- -------------- --------------- --------------- ----------------
Share capital 2,389 2,370 2,389 2,370
Share premium 1,588 1,472 1,588 1,472
Translation reserve 403 520 - -
Reserve for own shares (1,251) (1,445) (1,251) (1,445)
Retained earnings 18,147 20,429 14,701 14,270
------------------------------- -------------- --------------- --------------- ----------------
Total shareholders' equity 21,276 23,346 17,427 16,667
------------------------------- -------------- --------------- --------------- ----------------
Total equity and liabilities 69,457 67,509 62,995 62,075
------------------------------- -------------- --------------- --------------- ----------------
The Parent Company reported a profit for the period ended 30
March 2019 of GBP4,903,000 (2018: GBP5,422,000).
STATEMENT OF CASH FLOWS
Group Company
52 weeks 52 weeks 52 weeks 52 weeks
ended 30 ended 31 ended 30 ended 31
March 2019 March 2018 March 2019 March 2018
GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------------- ------------ ------------ ------------ ------------
Cash flows from operating activities
Net profit 2,314 4,090 4,903 5,422
Adjustments for:
Tax 262 451 321 200
Depreciation and amortisation 2,952 2,678 153 161
Net IAS 19 pension adjustments
within SCI 1,386 1,284 1,386 1,284
Past service pension deficit
payments (1,468) (1,413) (1,468) (1,413)
Foreign exchange differences (312) (626) (59) 142
Profit on disposal of property,
plant and equipment (12) (11) - -
Net bank interest income and
expense 300 308 (774) (554)
Share based payments (49) 341 (49) 341
Dividends received from subsidiary
companies - - (6,000) (7,500)
Increase in inventories (1,529) (807) - -
(Increase) / decrease in trade
and other receivables (2,072) 4,400 (5,767) (1,954)
Increase / (decrease) in trade
and other payables 1,659 (4,029) (1,416) 2,314
Tax paid (65) (839) (65) (839)
-------------------------------------- ------------ ------------ ------------ ------------
Net cash generated from / (used
by) operating activities 3,366 5,827 (8,835) (2,396)
Cash flows from investing activities
Purchase on intangible assets (67) (41) (61) (22)
Purchase of property, plant
and equipment (5,162) (1,894) (608) (73)
Proceeds from sale of property,
plant and equipment 12 12 303 -
Dividends received - - 6,000 7,500
-------------------------------------- ------------ ------------ ------------ ------------
Net cash (used in) / generated
from investing activities (5,217) (1,923) 5,634 7,405
Cash flows from financing activities
Proceeds from issue of ordinary
shares 135 3 135 3
Proceeds from issue of new
loans 1,568 4,220 768 131
Repayment of borrowings (1,311) (2,570) (848) (118)
Repayment / (issue) of intercompany
loans - - 568 (1,451)
Purchase of LTIP investments (315) (441) (315) (441)
Interest received 133 11 946 631
Interest paid (391) (320) (137) (79)
Sale of own shares 130 - 130 -
Dividends paid to shareholders (1,263) (1,097) (1,263) (1,097)
-------------------------------------- ------------ ------------ ------------ ------------
Net cash (used in) / generated
from financing activities (1,314) (194) (16) (2,421)
Net (decrease) increase in
cash and cash equivalents (3,165) 3,710 (3,217) 2,588
Effect of exchange rate fluctuations
on cash held (40) (74) (103) (110)
-------------------------------------- ------------ ------------ ------------ ------------
Net (decrease) / increase in
cash and cash equivalents (3,205) 3,636 (3,320) 2,478
Cash and cash equivalents at
the start of the period 5,557 1,921 3,004 526
Cash and cash equivalents at
the end of the period 2,352 5,557 (316) 3,004
Cash and cash equivalents consists
of:
Cash at bank and in hand 2,670 5,557 2 3,004
Bank overdraft (318) - (318) -
-------------------------------------- ------------ ------------ ------------ ------------
2,352 5,557 (316) 3,004
-------------------------------------- ------------ ------------ ------------ ------------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share Share Translation Retained
capital premium reserve Own shares earnings Total
-------------------------------- ---------------- ----------- ------------- ------------ ----------- -----------
Group GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------- ---------------- ----------- ------------- ------------ ----------- -----------
At 1 April 2017 2,367 1,472 602 (853) 15,498 19,086
Prior year adjustment (i) - - - - (219) (219)
At 1 April 2017 restated 2,367 1,472 602 (853) 15,279 18,867
-------------------------------- ---------------- ----------- ------------- ------------ ----------- -----------
Profit for the period - - - - 4,090 4,090
Exchange differences - - (82) - - (82)
Gain on cash flow hedges - - - - 57 57
Actuarial gains on retirement
benefit liabilities (net of
deferred tax) - - - - 2,152 2,152
Total other comprehensive income - - (82) - 2,209 2,127
Dividends paid - - - - (1,097) (1,097)
Share based payments - - - - 341 341
Tax on share options - - - - (201) (201)
Tax on other comprehensive
income - - - - 91 91
Proceeds from issue of ordinary
shares 3 97- - - - - 3
Sale of own shares - - - 324 (324) -
Consideration paid for own
shares - - - (916) (178) (1,094)
-------------------------------- ---------------- ----------- ------------- ------------ ----------- -----------
Total contributions by and
distributions
to owners of the Group 3 - - (592) (1,368) (1,957)
-------------------------------- ---------------- ----------- ------------- ------------ ----------- -----------
At 31 March 2018 2,370 1,472 520 (1,445) 20,210 23,127
-------------------------------- ---------------- ----------- ------------- ------------ ----------- -----------
Prior year adjustment (i) - - - - 95 95
-------------------------------- ---------------- ----------- ------------- ------------ ----------- -----------
At 31 March 2018 restated 2,370 1,472 520 (1,445) 20,305 23,222
Profit for the period - - - - 2,314 2,314
Exchange differences - - (117) - - (117)
Loss on cash flow hedges - - - - (29) (29)
Actuarial losses on retirement
benefit liabilities (net of
deferred tax) - - - - (2,704) (2,704)
Total other comprehensive income - - (117) - (2,733) (2,850)
Dividends paid - - - - (1,263) (1,263)
Share based payment charge - - - - (49) (49)
Tax on share options - - - - (48) (48)
Proceeds from issue of ordinary
shares 19 116 - - - 135
Sale of own shares - - - 509 (379) 130
Consideration paid for own
shares - - - (315) - (315)
-------------------------------- ---------------- ----------- ------------- ------------ ----------- -----------
Total contributions by and
distributions
to owners of the Group 19 116 - 194 (1,739) (1,410)
-------------------------------- ---------------- ----------- ------------- ------------ ----------- -----------
At 30 March 2019 2,389 1,588 403 (1,251) 18,147 21,276
-------------------------------- ---------------- ----------- ------------- ------------ ----------- -----------
(i) The balance on retained earnings as at 1 April 2017 and 31
March 2018 have been adjusted to reflect the change in the Group's
practice following adoption of IFRS 15 Revenue from contracts with
customers with regards to recognizing revenue when control of the
products is passed to the customer.
Share Share Retained
capital premium Own shares earnings Total
Company GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------- --------- --------- ----------- ---------- --------
At 1 April 2017 2,367 1,472 (853) 7,829 10,815
Profit for the period - - - 5,422 5,422
Gain on cash flow hedges - - - 57 57
Actuarial gains on retirement
benefit liabilities (net
of deferred tax) - - - 2,152 2,152
--------------------------------- --------- --------- ----------- ---------- --------
Total other comprehensive
income - - - 2,209 2,209
Dividends paid - - - (1,097) (1,097)
Share based payment charge - - - 341 341
Tax on share options - - - (201) (201)
Tax on other comprehensive
income - - - 91 91
Proceeds from issue of ordinary
shares 3 - - - 3
Sale of own shares - - 324 (324) -
Consideration paid for own
shares - - (916) - (916)
--------------------------------- --------- --------- ----------- ---------- --------
Total contributions by and
distributions to owners of
the Group 3 - (592) (1,190) (1,779)
--------------------------------- --------- --------- ----------- ---------- --------
At 31 March 2018 2,370 1,472 (1,445) 14,270 16,667
Profit for the period - - - 4,903 4,903
Loss on cash flow hedges - - - (29) (29)
Actuarial losses on retirement
benefit liabilities (net
of deferred tax) - - - (2,704) (2,704)
--------------------------------- --------- --------- ----------- ---------- --------
Total other comprehensive
income - - - (2,733) (2,733)
Dividends paid - - - (1,263) (1,263)
Share based payment charge - - - (49) (49)
Tax on share options - - - (48) (48)
Proceeds from issue of ordinary
shares 19 116 - - 135
Sale of own shares - - 509 (379) 130
Consideration paid for own
shares - - (315) - (315)
--------------------------------- --------- --------- ----------- ---------- --------
Total contributions by and
distributions to owners of
the Group 19 116 194 (1,739) (1,410)
--------------------------------- --------- --------- ----------- ---------- --------
At 30 March 2019 2,389 1,588 (1,251) 14,701 17,427
--------------------------------- --------- --------- ----------- ---------- --------
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1 BASIS OF PREPARATION
James Cropper Plc (the Company) is a public limited company
incorporated and domiciled in the United Kingdom and listed on the
Alternative Investment Market (AIM). The condensed consolidated
financial statements of the Company for the 52 weeks ended 30 March
2019, comprise the Company and its subsidiaries (together referred
to as the Group).
Statement of compliance
The condensed consolidated financial statements have been
prepared in accordance with International Financial Reporting
Standard (IFRS) as adopted by the European Union (EU). As required
by the Disclosure and Transparency Rules of the Financial Services
Authority, the condensed consolidated set of financial statements
have been prepared applying the accounting policies and
presentation that were applied in the preparation of the Group's
published consolidated financial statements for the 52 week period
ended 30 March 2019. They do not include all the information
required for full annual financial statements, and should be read
in conjunction with the consolidated financial statements of the
Group for the 52 week period ended 30 March 2019.
The consolidated financial statements of the Group for the 52
week period ended 30 March 2019 are available upon request from the
Company's registered office Burneside Mills, Kendal, Cumbria, LA9
6PZ or at www.cropper.com.
The financial information is presented in Sterling and all
values are rounded to the nearest thousand pounds (GBP'000) except
where otherwise indicated.
Going concern
The Directors have performed a robust assessment, including
review of the forecast for the 52 week period ending 30 March 2019
and longer term strategic forecasts and plans, including
consideration of the principal risks faced by the Group and the
Company, as detailed in the Group's Annual Report 2018. Following
this review the Directors are satisfied that the Company and the
Group have adequate resources to continue in operational existence
for the foreseeable future. Accordingly they continue to adopt the
going concern basis in preparing the condensed consolidated
financial statements.
Significant accounting policies
The accounting policies applied by the Group in these condensed
consolidated financial statements are the same as those applied by
the Group in its consolidated financial statements as at and for
the 52 week period ended 30 March 2019.
The Group has adopted IFRS 15 'Revenue from contracts with
customers' which it sets out in note 10. The Group has adopted IFRS
9 'Financial Instruments' which it sets out in note 11. Neither of
these are considered to have a material impact.
2 Accounting estimates and judgements
The preparation of the financial statements requires management
to make judgements, estimates and assumptions that affect the
application of accounting policies and the reported amounts of
assets and liabilities, income and expenses. Actual results may
differ from these estimates.
The significant judgements made by management in applying the
Group's accounting policies and the key sources of estimation
uncertainty were the same as those applied to the consolidated
financial statements as at and for the 52 week period ended 30
March 2019.
3 Risks and uncertainties
The principal risks and uncertainties which may have the largest
impact on performance are the same as disclosed in the 2019 Annual
Report on pages 21-25. The principal risks set out in the 2019
Annual Report were:
Employee health and safety; energy price volatility; pulp price
volatility and sustainability; exchange rate volatility; pension;
Brexit and information security and cyber risk.
The Board considers that the principal risks and uncertainties
set out in the 2019 Annual Report remain relevant for the current
financial year.
4 Alternative performance measures
The Company uses alternative performance measures to allow users
of the financial statements to gain a clearer understanding of the
underlying performance of the business.
Profit before tax represents the Group's overall performance and
financial position, however it contains significant non-operational
items relating to IAS 19 that the directors believe obscure an
understanding of the key performance trend.
Measures used to evaluate business performance are 'Adjusted
operating profit' (operating profit excluding the impact of IAS
19), and 'Adjusted profit before tax' (profit before tax excluding
the impact of IAS 19). The alternative performance measures are
reconciled in note 8.
5 Earnings per share
The calculation of basic earnings per share is based on earnings
attributable to ordinary shareholders divided by the weighted
average number of shares in issue during the year. The calculation
of diluted earnings per share is based on the basic earnings per
share adjusted to assume conversion of all dilutive options.
6 Segmental information
IFRS 8 Operating Segments - requires that entities adopt the
'management approach' to reporting the financial performance of its
operating segments. Management has determined the segments that are
reported in a manner consistent with the internal reporting
provided to the chief operating decision maker, identified as the
Executive Committee that makes strategic decisions. The committee
considers the business principally via the four main operating
segments, principally based in the UK:
-- James Cropper Paper Products (Paper): comprising:
-- JC Speciality Papers - relates to James Cropper Speciality
Papers a manufacturer of specialist paper and boards.
-- JC Converting - relates to James Cropper Converting - a
converter of paper.
-- James Cropper 3D Products (Colourform) - a manufacturer of
moulded fibre products.
-- Technical Fibre Products (TFP) - a manufacturer of advanced
materials.
-- Group Services - comprises central functions providing
services to the subsidiary companies.
Operating profit /
Revenue (loss)
52 week period 52 week period 52 week period
ended ended ended 52 week period
30 March 31 March 30 March ended 31
2019 2018 2019 March 2018
GBP'000 GBP'000 GBP'000 GBP'000
Paper 74,314 71,237 (1,992) 1,468
Colourform 290 166 (2,462) (1,639)
TFP 26,487 24,909 8,883 7,449
Group services - - (1,021) (1,840)
---------------- --------------- --------------- --------------- ---------------
101,095 96,312 3,408 5,438
---------------- --------------- --------------- --------------- ---------------
7 Dividend
The proposed final dividend of 11.0p (2018: 11.0p) per 25p
ordinary share is payable on 9 August 2019, subject to approval by
the shareholders at the Annual General Meeting, to those
shareholders on the register of the Company at the close of
business on 5 July 2019. The dividends recognised in the condensed
consolidated statement of changes in equity is the final dividend
for the 52 week period ended 31 March 2018 of 11.0p which was paid
on 10 August 2018 and the interim dividend for the 52 week period
ended 30 March 2019 of 2.5p, which was paid on 11 January 2019.
8 Retirement benefit obligations
Movements during the period in the Group's defined benefit
pension schemes are set out below:
52 week period 52 week period
ended ended
30 March 2019 31 March 2018
--------------------------------- ------------------ ------------------
GBP'000 GBP'000
Obligation brought forward (19,472) (22,194)
Expense recognised in the
income statement (1,955) (1,874)
Contributions paid to the
schemes 2,037 2,003
Actuarial (losses) and gains (3,258) 2,593
--------------------------------- ------------------ ------------------
Obligation carried forward (22,648) (19,472)
--------------------------------- ------------------ ------------------
During the period an estimate of GBP133,000 for the financial
cost to correct the gender inequalities inherent in Guaranteed
Minimum Pensions (GMPs) was taken to the Income statement.
9 Alternative performance measures
52 week period ended 52 week period ended
30 March 2019 31 March 2018
GBP'000 GBP'000
Adjusted operating profit 4,262 6,133
Net IAS 19 pension adjustments
- current service costs (1,423) (1,285)
- future service contributions
paid 569 590
----------------------------------------------------------- ------------------------ ------------------------
Operating profit 3,408 5,438
----------------------------------------------------------- ------------------------ ------------------------
52 week period ended 52 week period ended
30 March 2019 31 March 2018
GBP'000 GBP'000
Adjusted profit before tax 3,962 5,825
Net IAS 19 pension adjustments
- current service costs (1,423) (1,285)
- future service contributions
paid 569 590
- finance costs (532) (589)
----------------------------------------------------------- ------------------------ ------------------------
Profit before tax 2,576 4,541
----------------------------------------------------------- ------------------------ ------------------------
10 IFRS 15 'Revenue from contracts with customers'
With effect from 1 April 2018, the Group has applied IFRS 15,
Revenue from contract with customers. IFRS 15 replaces all existing
revenue requirements in IFRS and applies to all revenue arising
from contracts with customers unless the contracts are within the
scope of other standards. The cumulative effect method of adoption
has been used, with 2018 comparatives not being restated. The
adoption of IFRS 15 has had no material effect on transition and is
not expected to materially alter revenue recognition patterns going
forward.
Revenue represents income derived from contracts for the
provision of goods or services by the Company and its subsidiary
undertakings to customers in exchange for consideration in the
ordinary course of the Group's business. Upon approval by the
parties to a contract, the contract is assessed to identify each
promise to transfer either a distinct good or service, or a series
of distinct goods or services that are substantially the same and
have the same pattern of transfer to the customer. Revenue from the
sale of goods is recognised when control of the goods have been
transferred to the buyer. Goods are identified as products made
from either natural fibres, (e.g. paper or moulded paper products,
or man-made fibres, (e.g. highly technical nonwoven products made
by the TFP division). In addition, revenue for services are also
received (e.g. revenue for design and set up of moulded fibre
Colourform products). Any revenue received for such services are
recognised over the term of the contract.
Revenue is recognised when:
-- all significant performance obligations have been met;
-- the Group retains neither continuing managerial involvement
nor effective control over the goods;
-- It is probable that the economic benefits associated with the
transaction will flow to the Group;
-- The amount of revenue can be measured reliable.
Transfer of control varies depending on the individual terms of
the contract of sale. For sales in the UK, transfer of control
occurs when the goods are despatched to the customer. However, for
some international shipments, transfer of control occurs either
upon loading the goods onto the relevant carrier or when the goods
have arrived in the overseas port. The point of transfer of control
for international shipments is dictated by the terms of each
sale.
Although the majority of the group's contracts with customers
are not complex, with revenue being fixed for a specific quantity
of goods, the Group has identified a number of contracts in which
customers are given volume rebates and/or other promotional rebates
based on quantities purchased over a contractually agreed period of
time. Under IFRS 15, revenue that varies due to rebates or brand
support costs is only recognised to the extent that it is highly
probable that a significant reversal of that revenue will not occur
at the end of the rebate assessment period.
Based on the timing of the agreements entered into with
customers, the level of estimation in year-end accruals is
insignificant, and as such there is not considered to have been a
significant impact on deductions to revenue under IFRS 15.
11 IFRS 9 'Financial instruments'
IFRS 9 Financial Instruments, has impacted the way in which the
Group accounts for certain financial assets and liabilities. The
standard has introduced an expected credit loss model when
assessing impairment of financial assets. The Group has applied the
simplified model to recognise expected lifetime losses on its trade
receivables.
Previously, impairment of trade receivables was based on the
ageing of the debt and whether or not credit insurance covered the
debt, whilst assessing the likelihood of the debt not being
settled.
Impairment provisions for receivables from and to Group
undertakings are recognised based on a forward-looking expected
credit loss model. The methodology used to determine the amount of
the provision is based on whether there has been a significant
increase in credit risk since initial recognition of the financial
asset. For those where the credit risk has not increased
significantly since initial recognition of the financial asset,
twelve month expected credit losses along with gross interest
income are recognised. For those for which credit risk has
increased significantly, lifetime expected credit losses along with
gross interest income are recognised. For those that are determined
to be credit impaired, lifetime expected credit losses along with
interest income on a net basis are recognised.
Notwithstanding the high value of trade receivables, the
application of IFRS 9 and the expected credit loss impairment model
has not had a material effect on the group, due to the fact the
most of the Group's trade receivables are covered by Credit
insurance and those that are not covered are tightly managed to
mitigate the likelihood of any credit loss.
12 Related parties
There have been no significant changes in the nature of related
party transactions in the period ended 30 March 2019 from that
disclosed in the 2018 Annual report.
Statement of Directors' responsibilities
The Directors confirm that these condensed consolidated
financial statements have been prepared in accordance with
International Financial Reporting standards as adopted by the
European Union and that the preliminary report includes a fair
review of the information required by DTR 4.2.7 and DTR 4.2.8,
namely:
(i) An indication of important events that have occurred during
the period and their impact on the condensed set of financial
statements, and a description of the principal risks and
uncertainties for the financial period; and
(ii) Material related party transactions in the period and any
material changes in the related party transactions described in the
last Annual report.
The Directors of James Cropper Plc are detailed on our Group
website www.cropper.com
Forward-looking statements
Sections of this financial report may contain forward-looking
statements with respect to the Group's plans and expectations
relating to its future performance, results, strategic initiatives,
objectives and financial position, including liquidity and capital
resources. These forward-looking statements are not guarantees of
future performance. By their very nature, all forward-looking
statements involve risks and uncertainties because they relate to
events that may or may not occur in the future and are or may be
beyond the Group's control. Accordingly, the Group's actual results
and financial condition may differ materially from those expressed
or implied in any forward-looking statements. Forward-looking
statements in this financial report are current only as of the date
on which such statements are made. The Group undertakes no
obligation to update any forward-looking statements, save in
respect of any requirement under applicable law or regulation.
Nothing in this announcement shall be construed as a profit
forecast.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR USABRKRANUAR
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