TIDMCRPR
RNS Number : 8604S
Cropper(James) PLC
09 November 2023
9 November 2023
James Cropper plc
("James Cropper", the "Company" or the "Group")
Interim Results
Accelerated growth strategy on track
Financial and operational performance drives gross margin
expansion and increased profitability in the Group
James Cropper plc (AIM: CRPR), a global market leader in
advanced materials, luxury packaging and paper products , announces
its results for the six months ended 30 September 2023 ('H1
FY24').
Financial Headlines:
-- Group revenue broadly in line with the Board's FY24
expectations despite ongoing market headwinds in Paper Products
-- Adjusted operating profit increased to GBP3.0m (H1 FY23:
GBP0.5m) with gross margin performance and cost management
improvement
-- Profit before tax up to GBP2.4m (H1 FY23: loss GBP(0.9)m)
supported by improved margins, a reduction in IAS 19 pension
adjustments and exceptional items
-- Earnings per share up to 19.4p (H1 FY23: loss per share (9.2)p)
-- Interim dividend declared at 3.0p per share (H1 FY23: 2.0p),
reflecting the Board's confidence in the ongoing implementation of
the accelerated growth strategy
-- Net debt of GBP13.3m, down GBP3.3m from GBP16.6m at FY23 (H1 FY23: GBP12.2m).
Operational Headlines:
-- Accelerated growth strategy on track with progress achieved during the period under review
-- Continued progress made as the Group unifies its business
identity under the James Cropper name, with launch ready for Q4
FY24
-- Solid performance in Advanced Materials division;
-- Future Energy's hydrogen offer continues to exceed
management's expectations
-- T echnical Fibres remains healthy with growth in core
customer base
-- Restructuring and consolidation of Paper and Colourform is progressing well
-- New leadership team in place across market-facing segments as well as at a Group level
-- Decarbonisation project advancing to phase one construction, supported by grant funding
-- Luxury Packaging wins internationally acclaimed Formes de Luxe award
Future Outlook:
-- Continued growth in Advanced Materials division:
-- Ongoing investment for expansion in the electrolyser
manufacturing operations
-- Opportunity pipeline and exploration into new growth markets
such as Carbon Capture and Electrolyser OEM
-- Ongoing progress in Paper Products division:
-- Restructuring due to complete in Q4 FY24, delivering further
margin improvement
-- Share in target markets maintained and well positioned for
anticipated recovery in global demand during FY25.
-- The actions taken to date give the Board confidence that the
Group is well positioned to deliver increased profitability in FY24
consistent with its expectations and that, in line with the
accelerated growth strategy, revenue growth will be delivered from
FY25 onwards.
Commenting on the half year results, James Cropper CEO Steve
Adams said:
"We have achieved a healthy first half performance with benefits
from our accelerated growth strategy now becoming evident,
following considerable hard work and commitment by the James
Cropper team.
In spite of ongoing wider macro-economic pressures and softer
demand across Paper, the actions taken to streamline the business
and focus on higher margin opportunities have helped deliver an
improvement in profitability. Advanced Materials continues to
perform well with Future Energy again exceeding expectations.
The continued focus on our unique recovered fibre upcycling
capability, moulded fibre luxury packaging offer and pioneering
activities in decarbonisation keep us differentiated and relevant
with our current and future customers.
Our access to the high growth Future Energy markets with an
equally differentiated product and technology offer in Advanced
Materials, brings significant opportunity for further growth. We
are committed to ongoing investment in our capabilities and
capacity with a new phase of expansion in our electrolyser
manufacturing operations.
We have also built significant strength in our talent and
leadership over the last year and will complement this with more
agile systems and processes. With the new leadership team, and our
talented global workforce, we are well positioned for greater
success; from redefining our Paper Products offer to satisfying
global demand for a low carbon economy through cutting edge
materials and components in renewable energy.
While still in the midst of our transformation, we are confident
in the future prospects of the business which is reflected in the
increase in interim dividend and I look forward to achieving
further value for our shareholders as we start the journey to
reposition ourselves as one company , unified under the Group name,
James Cropper."
S
Enquiries:
James Cropper plc
Rosina Merrett
Mob: +44 (0) 7500 083559
www.jamescropper.com
Shore Capital - NOMAD and Broker
Robert Finlay, Henry Willcocks, Lucy Bowden
Tel: +44 (0) 20 7601 6100
Buchanan Communications - Financial PR
Chris Lane, Charles Ryland, Jamie Hooper, Verity Parker
jamescropper@buchanancomms.co.uk
Tel: +44 (0) 207 466 5000
Notes for editors:
James Cropper is a market leader in Advanced Materials and Paper
Products, centred around four market audiences: Future Energy,
Technical Fibres, Luxury Packaging and Creative Papers.
A purpose-led business, built upon six generations of the
Cropper family, James Cropper has a 600+ international workforce
and an operational reach in over 50 countries.
Established in 1845, the Group manufactures creative papers,
luxury packaging and advanced materials incorporating pioneering
non-wovens and electrochemical coatings.
James Cropper is a specialist provider of niche solutions
tailored to a unique customer specification, ranging from
substrates and components in hydrogen electrolysis and fuel cells
to bespoke colours and textures in paper and moulded fibre
packaging designed to replace single use plastics.
The Group operates across multiple markets from luxury retail to
renewable energy. It is renowned globally for service, capability,
pioneering and multi award-winning commitment to the highest
standards of sustainability.
James Cropper's goal is to be operationally net zero by 2030 and
to reduce carbon through its entire supply chain to net zero by
2050.
Business review
Building on the previous year's strong second half, the first
six months of this year show an improved performance.
The economic climate continues to be challenging but overall,
profits for the Group were up, with profit before tax of GBP2.4m
(H1 FY23: loss GBP(0.9)m) and adjusted profit before tax at
GBP2.4m, compared with GBPnil in the prior comparative period. This
was due to an improved gross margin performance and cost management
as well as relief on energy procurement.
The Group continues to make significant progress in
repositioning James Cropper as an Advanced Materials and Paper
Products business, centred around four target audiences: Future
Energy, Technical Fibres, Luxury Packaging and Creative Papers,
with the accelerated growth strategy on track to capitalise on the
opportunities within its core and emerging end-markets.
A strategy for accelerated growth:
1. Profitable growth through new customer acquisition:
opportunities to expand in new and existing markets
2. World class execution: investment in global systems and functions
3. Technology and Innovation: Centre for Innovation will include
decarbonisation and waste fibres as well as exploring new ideas
4. Leaders in sustainability: recognising our responsibility to
reduce and ultimately eliminate our emissions
5. Inspiring our people: building a culture of trust, cooperation and involvement
6. Build the brand: presenting a more meaningful and relevant
face to our increasingly global customer base.
Over this period, the Group strengthened its leadership team
with Matthew Ratcliffe joining as General Counsel and Richard
Bracewell, internally appointed, as Managing Director of the Paper
Products division. As previously announced, Andrew Goody will join
the Company and the Board of Directors later this month as Chief
Financial and Operations Officer.
The Centre of Innovation function has further progressed the
decarbonisation programme with grant funding awarded. The project
has advanced to phase one construction to support the build of the
Low Carbon Energy Centre which will enable the electrification of
the paper manufacturing facility.
Revenue is broadly in line with the Board's expectations with
all divisions experiencing positive customer demand, albeit at a
lower rate than expected within Paper Products.
Advanced Materials (Future Energy and Technical Fibres)
Revenue for the division is ahead at GBP19.0m in comparison to
last year (H1 FY23: GBP17.4m).
Future Energy's hydrogen offer continues to exceed management's
expectations with profit and demand growing. In North America,
electrolyser manufacturers are now beginning to benefit from the
new coating line with its ability to shorten supply chain and
optimise logistics.
Demand within Technical Fibres remains steady, with growth seen
in its core customer base. The activation of the strategic growth
programmes is driving a healthy opportunity pipeline with
strengthened customer relationships, exploration of new business
partnerships and a focus on new growth markets such as Carbon
Capture and Electrolyser OEM.
Paper Products (Luxury Packaging and Creative Papers)
Over the last twelve months, measures have been implemented to
build strength and resilience in the division by restructuring and
consolidating operations to drive better asset utilisation with
increased efficiency and productivity.
The right-sizing of the division and consolidating Colourform
into Luxury Packaging and Creative Papers is showing gross margin
improvement and productivity gains despite tough market conditions
across the industry.
Operating margin has continued to improve, despite the Group no
longer applying an energy surcharge and some near term softening in
its paper markets. Revenue at GBP35.6m is broadly in line with the
previous year (H1 FY23: GBP42.0m) (H1 FY23: GBP38.1m excluding
energy surcharge).
The Board expects global demand, particularly within Luxury
Packaging, to normalise moving into FY25. In line with market
expectations, the division will be well positioned for further
gross margin improvements with the restructure completed and leaner
working practices implemented.
The capabilities within Paper have also widened with the new
Embossing Centre of Excellence in operation as well as expanding
the reclaimed and recycled fibre offer.
The long-standing partnership with the Royal British Legion saw
James Cropper support the launch of the first-ever 100%
plastic-free remembrance poppy, a partnership proudly held since
1978 and most recently, the division won the internationally
acclaimed Formes de Luxe award in the Moulded Pulp Packaging
category in collaboration with Maison Perrier-Jouët for Belle
Epoque 'Cocoon'.
Outlook
Within Advanced Materials, a scale up of additional capacity for
the Future Energy hydrogen offer is underway with accelerated
capital investment for the next phase of expansion in the UK
electrolyser manufacturing operations. New market opportunities for
Technical Fibres are expected to provide another year of
growth.
The Group also continues to make significant progress in
repositioning the business, unified under its business name, James
Cropper. To build greater brand equity in the market, the Group
will be launching a refreshed identity in Q4 FY24.
In the Paper division wider macro-economic pressures will endure
into the second half of the year. However, the completed
restructure and improved operational efficiencies will drive
further recovery in margin improvement and productivity.
The actions taken to date give the Board confidence that the
Group is well positioned to deliver increased profitability in FY24
consistent with its expectations and that, in line with the
accelerated growth strategy, revenue growth will be delivered from
FY25 onwards.
Financial Summary
Half-year Half-year Full-year
to 30 September to 24 September to 1
2023 2022 April
2023
GBPm GBPm GBPm
Revenue 56.5 61.6 129.7
Adjusted operating profit * 3.0 0.5 4.8
Operating profit /(loss) 3.6 (0.2) 3.3
Adjusted profit / (loss) before
tax * 2.4 (0.0) 3.2
Impact of IAS 19 (0.2) (0.3) (0.8)
Impact of exceptional items 0.2 (0.5) (1.1)
Profit / (loss) before tax 2.4 (0.9) 1.3
Earnings / (loss) per share - basic
and diluted 19.4p (9.2)p 5.4p
Dividend per share declared 3.0p 2.0p 6.0p
Net debt (13.3) (12.2) (16.6)
Equity shareholders' funds 33.9 34.3 32.1
Gearing % - before IAS 19 deficit 29% 28% 38%
Gearing % - after IAS 19 deficit 39% 35% 52%
Capital expenditure 1.4 2.4 5.8
* excludes the impact of IAS 19 and exceptional items (per note
8)
Financial Statement
Half-year Half-year Full-year
to 30 September to 24 September to 1 April
2023 2022 2023
GBP'000 GBP'000 GBP'000
Revenue
Paper Products division - excluding
energy surcharge 35,628 38,170 79,717
Paper Products division - energy
surcharge - 3,876 8,434
Colourform division 1,876 2,105 4,326
Technical Fibre Products division 18,995 17,432 37,187
---------------------------------------- ----------------- ----------------- ------------
56,499 61,583 129,664
Adjusted operating profit * 3,048 453 4,767
Fair value movement on derivatives - - (330)
Adjusted net interest (645) (466) (1,242)
---------------------------------------- ----------------- ----------------- ------------
Adjusted profit / (loss) before
tax * 2,403 (13) 3,195
IAS19 pension adjustments
Net current service charge against
operating profits 202 (126) (442)
Finance costs charged against interest (386) (178) (345)
---------------------------------------- ----------------- ----------------- ------------
2,219 (317) 2,408
Exceptional items (note 8) 340 (540) (986)
Exceptional finance costs (note
8) (131) - (109)
---------------------------------------- ----------------- ----------------- ------------
Profit / (loss) before tax 2,428 (857) 1,313
---------------------------------------- ----------------- ----------------- ------------
* excludes the impact of IAS 19 and exceptional items (per note
8)
Balance sheet summary Half-year Half-year Full-year
to 30 to 24 to 1
September September April
2023 2022 2023
GBP'000 GBP'000 GBP'000
Non-pension assets - excluding
cash 80,952 85,113 86,754
Non-pension liabilities - excluding
borrowings (21,636) (28,986) (25,990)
59,316 56,127 60,764
Net IAS19 pension deficit (after
deferred tax) (12,153) (9,677) (12,105)
------------------------------------- ----------- ----------- ----------
47,163 46,450 48,659
Net borrowings (13,312) (12,156) (16,594)
------------------------------------- ----------- ----------- ----------
Equity shareholders' funds 33,851 34,294 32,065
------------------------------------- ----------- ----------- ----------
Gearing % - before IAS19 deficit 29% 28% 38%
Gearing % - after IAS19 deficit 39% 35% 52%
Capital expenditure GBP'000 1,399 2,360 5,779
UN-AUDITED CONSOLIDATED INCOME STATEMENT
26 week 26 week 53 week
period period period
to 30 to 24 to 1
September September April
2023 2022 2023
---------------------------------------- ---------- ---------- ---------
GBP'000 GBP'000 GBP'000
Revenue 56,499 61,583 129,664
Provision for impairment (loss)
/ reversal (116) (69) 134
Other income 1,471 770 650
Changes in inventories (134) 1,975 817
Raw materials and consumables used (19,882) (23,359) (48,556)
Energy costs (3,866) (8,031) (15,162)
Employee benefit costs (17,845) (18,031) (34,459)
Depreciation and amortisation (2,289) (2,090) (4,278)
Other expenses (10,248) (12,961) (25,471)
Operating profit / (loss) 3,590 (213) 3,339
Fair value movement on derivatives - - (330)
Interest payable and similar charges (1,162) (644) (1,697)
Interest receivable and similar
income - - 1
Profit / (loss) before taxation 2,428 (857) 1,313
Taxation (570) (26) (797)
---------------------------------------- ---------- ---------- ---------
Profit / (loss) for the period 1,858 (883) 516
Earnings / (loss) per share - basic
and diluted 19.4p (9.2)p 5.4p
UN-AUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Profit / (loss) for the period 1,858 (883) 516
---------------------------------------- ---------- ---------- ---------
Items that are or may be reclassified
to profit or loss
Exchange differences on translation
of foreign operations (80) 440 222
Cash flow hedges - effective portion
of changes in fair value 256 680 1,040
Cash flow hedges - cost of hedging 60 - (355)
Items that will never be reclassified
to profit or loss
Retirement benefit liabilities -
actuarial losses (411) (66) (3,888)
Deferred tax on actuarial losses
on retirement benefit liabilities 103 17 972
Other comprehensive income / (expense)
for the period (72) 1,071 (2,009)
---------------------------------------- ---------- ---------- ---------
Total comprehensive income / (expense)
for the period attributable to equity
holders of the Company 1,786 188 (1,493)
---------------------------------------- ---------- ---------- ---------
UN-AUDITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
30 24 1
September September April
2023 2022 2023
GBP'000 GBP'000 GBP'000
------------------------------------- ------------ ------------------ ----------------
Assets
Intangible assets 1,441 2,219 1,524
Goodwill 1,264 1,264 1,264
Property, plant and equipment 32,191 31,636 32,717
Right of use assets 6,302 7,528 6,765
Other financial asset 657 - 654
Deferred tax assets 4,215 3,171 4,198
------------------------------------- ------------ ------------------ ----------------
Total non-current assets 46,070 45,818 47,122
------------------------------------- ------------ ------------------ ----------------
Inventories 18,166 19,638 18,304
Trade and other receivables 20,520 21,242 24,763
Provision for impairment (759) (846) (643)
Other financial assets 644 1,653 428
Cash and cash equivalents 12,348 14,147 7,679
Current tax assets 362 833 815
Total current assets 51,281 56,667 51,346
------------------------------------- ------------ ------------------ ----------------
Total assets 97,351 102,485 98,468
------------------------------------- ------------ ------------------ ----------------
Liabilities
Trade and other payables 16,678 24,864 21,106
Other financial liabilities - 415 58
Loans and borrowings 1,306 1,697 1,758
------------------------------------- ------------ ------------------ ----------------
Total current liabilities 17,984 26,976 22,922
------------------------------------- ------------ ------------------ ----------------
Long-term borrowings 24,354 24,606 22,515
Retirement benefit liabilities 16,204 12,902 16,140
Contingent consideration on business
acquisition 1,554 922 1,423
Deferred tax liabilities 3,404 2,785 3,403
Total non-current liabilities 45,516 41,215 43,481
------------------------------------- ------------ ------------------ ----------------
Total liabilities 63,500 68,191 66,403
------------------------------------- ------------ ------------------ ----------------
Equity
------------------------------------- ------------ ------------------ ----------------
Share capital 2,389 2,389 2,389
Share premium 1,588 1,588 1,588
Reserve for own shares (1,407) (1,407) (1,407)
Translation reserve 695 993 775
Cash flow hedging reserve 1,296 1,202 1,040
Cost of hedging reserve (295) - (355)
Retained earnings 29,585 29,529 28,035
------------------------------------- ------------ ------------------ ----------------
Total shareholders' equity 33,851 34,294 32,065
------------------------------------- ------------ ------------------ ----------------
Total equity and liabilities 97,351 102,485 98,468
------------------------------------- ------------ ------------------ ----------------
UN-AUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
26 week 26 week 53 week
period period period
to 30 to 24 to 1
September September April
2023 2022 2023
------------------------------------------------ ------------------- --------------------- ---------------------
GBP'000 GBP'000 GBP'000
Cash flows from operating activities
Profit / (loss) for the period 1,858 (883) 516
Adjustments for:
Tax expense 570 26 797
Depreciation and amortisation 2,289 2,090 4,278
Earn out adjustment on contingent consideration
on business acquisition - - 986
Net IAS 19 pension adjustments within
Statement of comprehensive income (202) 304 442
Past service pension deficit payments (531) (598) (1,665)
Foreign exchange differences (205) (125) (136)
Loss / (profit) on disposal of property,
plant and equipment 174 22 (589)
Net interest expense 1,162 464 1,696
Share based payments - - (59)
Fair value movement on derivatives - - 330
Changes in working capital:
Decrease /(increase) in inventories 171 (1,953) (696)
Decrease / (increase) in trade and other
receivables 4,318 1,517 (3,614)
(Decrease) / increase in trade and other
payables (4,495) 3,386 2,396
Tax (paid) /received (28) 1,057 868
Net cash generated from operating activities 5,081 5,307 5,550
Cash flows from investing activities
Purchase of intangible assets (5) (86) (1,126)
Purchases of property, plant and equipment (1,394) (2,274) (5,267)
Contingent consideration on business
acquisition paid - - (250)
Net cash used in investing activities (1,399) (2,360) (6,643 )
Cash flows from financing activities
Proceeds from issue of loans 2,000 5,189 5,050
Repayment of borrowings (201) (123) (288)
Repayment of lease liabilities (668) (674) (1,561)
Interest received - 1 1
Interest paid (481) (291) (858)
Non-deliverable forward contract payment - - (330)
Payments on interest rate cap - - (495)
Dividends paid to shareholders - (708) (897)
Net cash generated from financing activities 650 3,394 622
------------------------------------------------ ------------------- --------------------- ---------------------
Net increase/(decrease) in cash and
cash equivalents 4,332 6,341 (471)
Effect of exchange rate fluctuations
on cash held 337 56 400
------------------------------------------------ ------------------- --------------------- ---------------------
Net increase in cash and cash equivalents 4,669 6,397 (71)
Cash and cash equivalents at the start
of the period 7,679 7,750 7,750
------------------------------------------------ ------------------- --------------------- ---------------------
Cash and cash equivalents at the end
of the period 12,348 14,147 7,679
------------------------------------------------ ------------------- --------------------- ---------------------
Cash and cash equivalents consists
of:
Cash at bank and in hand 12,348 14,147 7,679
------------------------------------------------ ------------------- --------------------- ---------------------
UN-AUDITED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Cash Cost
Reserve flow of
Share Share Translation for own hedging hedging Retained
capital premium reserve shares Reserve reserve earnings Total
-------------- --------- -------- ---------------- -------- ----------- ----------- ------------- ------------
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 April
2023 2,389 1,588 775 (1,407) 1,040 (355) 28,035 32,065
Comprehensive
income
for the
period - - - - - - 1,858 1,858
Total other
comprehensive
income - - (80) 256 60 (308) (72)
Dividends paid - - - - - - - -
Total
contributions
by and -
distributions
to owners of
the Group - - - - - - -
-------------- --------- -------- ---------------- -------- ----------- ----------- ------------- ------------
At 30
September
2023 2,389 1,588 695 (1,407) 1,296 (295) 29,585 33,851
-------------- --------- -------- ---------------- -------- ----------- ----------- ------------- ------------
At 26 March
2022 2,389 1,588 553 (1,407) - - 31,691 34,814
Comprehensive
expense
for the
period - - - - - - (883) (883)
Total other
comprehensive
income - - 440 - 1,202 - (571) 1,071
Dividends paid - - - - - - (708) (708)
Total
contributions
by and
distributions
to owners of
the Group - - - - - - (708) (708)
-------------- --------- -------- ---------------- -------- ----------- ----------- ------------- ------------
At 24
September
2022 2,389 1,588 993 (1,407) 1,202 - 29,529 34,294
-------------- --------- -------- ---------------- -------- ----------- ----------- ------------- ------------
NOTES TO THE CONDENSED CONSOLIDATED HALF YEAR 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) market of the London Stock
Exchange. The condensed consolidated half year financial statements
of the Company for the twenty six weeks ended 30 September 2023,
which have not been audited or reviewed, comprise the Company and
its subsidiaries (together referred to as the Group).
Basis of preparation
The condensed consolidated financial statements for the 26 week
periods ending 30 September 2023 and 24 September 2022 are
unaudited and were approved by the Directors on 8 November 2023.
They do not constitute statutory accounts as defined in s434 of the
Companies Act 2006. The financial statements for the year ended 1
April 2023 were prepared in accordance with UK adopted
international accounting standards and with those parts of the
Companies Act 2006 applicable to companies reporting under IFRS,
and have been delivered to the Registrar of Companies. The report
of the auditor on those financial statements was unqualified and
did not draw attention to any matters by way of emphasis of matter.
The Group's financial statements consolidate the financial
statements of James Cropper Plc and its subsidiaries.
Applicable standards
These unaudited consolidated interim financial statements have
been prepared in accordance with international accounting standards
as adopted by the UK, under the historical cost convention except
for the revaluation of certain financial instruments to fair value.
They have not been prepared in accordance with IAS 34, the
application of which is not required to the interim financial
statements of companies trading on the Alternative Investment
Market (AIM companies).
The consolidated financial statements of the Group for the 53
week period ended 1 April 2023 are available upon request from the
Company's registered office: Burneside Mills, Kendal, Cumbria, LA9
6PZ or at www.jamescropper.com .
The half year 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, at the time of approving these interim
statements, have a reasonable expectation that the Group has
adequate resources to continue in operational existence for at
least 12 months from this reporting date.
For the interim going concern review, the Board has reviewed the
Group's financial forecasts for the 2 year period ending 31 March
2025 against which a number of scenarios assess headroom against
facilities and impacts on bank covenants, which showed adequate
headroom and no covenant breaches.
Following this review the Directors are satisfied that 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 53 week period ended 1 April 2023.
2 Accounting estimates and judgements
The preparation of half year 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 53 week period ended 1 April
2023.
3 Risks and uncertainties
The principal risks and uncertainties which may have the largest
impact on performance in the second half of the year are the same
as disclosed in the 2023 Annual Report on pages 21-25. The
principal risks set out in the 2023 Annual Report were:
Pension; network and systems security; security of supply; fire;
net zero emissions; employee health and safety; attraction and
retention of key skills and talent; energy price volatility and
corporate and regulatory compliance risk.
The Board considers that all principal risks and uncertainties
set out in the 2023 annual report have not changed and remain
relevant for the second half of the 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,
however it contains significant non-operational items relating to
IAS 19 that the directors believe make year-on-year comparison of
performance challenging.
Measures used to evaluate business performance are 'Adjusted
operating profit' (operating profit excluding the impact of IAS 19
and exceptional items) and 'Adjusted profit before tax' (profit
before tax excluding the impact of IAS 19 and exceptional items).
The alternative performance measures are reconciled in note 9.
The adjustment, which we refer to in these accounts as the "IAS
19 impact" represents the difference 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 profit and earnings per
share targets used in management incentive schemes.
5 Earnings per share
Six months Six months
ended 30 ended 24 Year ended
September September 1 April
2023 2022 2023
-------------------------------- ----------- ----------- ------------
Earnings / (loss) per share
- basic and diluted 19.4p (9.2)p 5.4p
Profit / (loss) for the period
(GBP'000) 1,858 (883) 516
-------------------------------- ----------- ----------- ------------
Weighted average number of
shares -
basic and diluted 9,554,803 9,554,803 9,554,803
6 Dividends
The proposed interim dividend of 3.0p (H1 FY23: 2.0p) per 25p
ordinary share is payable on 8 January 2024 to those shareholders
on the register of the Company at the close of business on 8
December 2023, with an ex-dividend date of 7 December 2023.
7 Retirement benefit obligations
53 week
26 week period 26 week period period ended
ended 30 September ended 24 September 1 April
2023 2022 2023
------------------------------- -------------------- -------------------- --------------
GBP'000 GBP'000 GBP'000
Obligation brought forward (16,140) (13,130) (13,130)
Expense recognised in
the income statement (563) (568) (1,319)
Contributions paid to
the schemes 910 862 2,197
Actuarial (losses) recognised
in Other Comprehensive
Income (411) (66) (3,888)
------------------------------- -------------------- -------------------- --------------
Obligation carried forward (16,204) (12,902) (16,140)
------------------------------- -------------------- -------------------- --------------
8 Exceptional items
26 week 53 week
period ended 26 week period period
30 September ended 24 September ended 1
2023 2022 April 2023
------------------------------- ---------------- -------------------- ------------
GBP'000 GBP'000 GBP'000
Included in employee benefit
costs:
Restructuring costs 760
Included in other expenses:
Restructuring costs 304 - -
Increase in earn-out provisions - 540 986
Included in other income:
Legal settlement (1,404) - -
------------------------------- ---------------- -------------------- ------------
Exceptional items excluding
finance costs (340) 540 986
Included in finance costs:
Unwind of discount on
earn-out
provision 131 - 109
------------------------------- ---------------- -------------------- ------------
Exceptional items (209) 540 1,095
------------------------------- ---------------- -------------------- ------------
Restructuring costs incurred to date amount to GBP1,064k, the
group restructure is expected to be complete by year end.
A settlement of a historic pension legal dispute was agreed in
the current period resulting in the recognition of income of
GBP1,404k.
9 Alternative performance measures
26 week period 26 week period 52 week
ended 30 September ended 24 September period ended
2023 2022 1 April 2023
GBP'000 GBP'000 GBP'000
Adjusted operating
profit 3,048 453 4,767
Net IAS 19 pension
adjustments - current
service costs 202 (126) (442)
Exceptional items 340 (540) (986)
------------------------ -------------------- -------------------- --------------
Operating profit
/ (loss) 3,590 (213) 3,339
------------------------ -------------------- -------------------- --------------
26 week period 26 week period 53 week
ended 30 September ended 24 September period ended
2023 2022 1 April 2023
GBP'000 GBP'000 GBP'000
Adjusted profit / (loss)
before tax 2,403 (13) 3,195
Net IAS 19 pension
adjustments
- current service
costs (177) (390) (974)
- future service contributions
paid 379 264 532
- finance costs (386) (178) (345)
Exceptional items 209 (540) (1,095)
--------------------------------- -------------------- -------------------- --------------
Profit / (loss) before
tax 2,428 (857) 1,313
--------------------------------- -------------------- -------------------- --------------
10 Related parties
There have been no significant changes in the nature of related
party transactions in the period ended 30 September 2023 from that
disclosed in the 2023 annual report.
Statement of Directors' responsibilities
The Directors confirm that these condensed consolidated interim
financial statements have not been prepared in accordance with IAS
34 as adopted by the UK and that the interim management 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 first six months and their impact on the condensed set of
financial statements, and a description of the principal risks and
uncertainties for the remaining six months of the financial year;
and
(ii) Material related party transactions in the first six months
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.jamescropper.com
Forward-looking statements
Sections of this half-yearly 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 half-yearly 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.
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END
IR FSEESAEDSESF
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