TIDMCRPR
RNS Number : 8072T
Cropper(James) PLC
19 November 2019
The advanced materials and paper products group, is pleased to
announce its
Half year results to 28 September 2019
Half year Half year Full year
to 28 September to 29 September to 30 March
2019 2018 2019
GBPm GBPm GBPm
Revenue 52.8 50.3 101.1
Adjusted operating profit (excluding
IAS19 impact) 2.8 2.0 4.3
Operating profit 2.6 1.8 3.4
Adjusted profit before tax (excluding
IAS19 impact) 2.6 1.9 4.0
Impact of IAS 19 (0.6) (0.5) (1.4)
Profit before tax 2.0 1.4 2.6
Earnings per share - basic and
diluted 17.0p 12.9p 24.3p
Dividend per share declared 2.5p 2.5p 13.5p
Net borrowings (excluding IFRS
16) (10.8) (6.6) (8.6)
Net borrowings (including IFRS
16) (15.3) (6.6) (8.6)
Equity shareholders' funds 21.9 23.0 21.3
Gearing % - before IAS 19 deficit
and IFRS 16 27% 17% 21%
Gearing % - after IAS 19 deficit
and IFRS 16 70% 29% 40%
Capital expenditure 3.3 1.9 5.2
Highlights
-- Revenue growth in all divisions with total revenue up 5% on prior period comparative
-- Adjusted PBT (excluding IAS 19 impact) at GBP2.6m, up 31% on prior period comparative
-- PBT at GBP2.0m, up 42% on prior period comparative
-- EPS (diluted) 17.0p up 32% on prior period comparative
-- Colourform(TM) revenues exceed GBP1m in the period
-- Mix improvements and pulp price softening returns paper to profitability
-- Expansion of TFP non-woven capacity on schedule, increasing
capacity by 50% by end of the 2020 calendar year
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. Plans to
provide an additional 50% capacity in TFP by the end of the 2020
calendar year are on track. Paper sales are projected to grow year
on year with the benefits of an improved mix and a softening of
pulp price leading to a return to profit. Continued
commercialisation for Colourformä is projected as the business
gains further traction in the market. We have instituted an
Environmental, Social and Corporate Governance (ESG) sub-committee
and will commence formal measurement and reporting in line with ESG
objectives in 2020.
We invest significantly in people, innovation and capability.
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 results are anticipated to be in line
with management expectations."
Enquiries:
Isabelle Maddock, Group Robert Finlay, Anita Ghanekar ,
Finance Director Henry Willcocks
James Cropper PLC (AIM:CRPR.L) Shore Capital
Telephone: +44 (0) 1539 Telephone: +44 (0) 207 408 4090
722002
www.jamescropper.com
Half year Half year Full year
to 28 September to 29 September to 30 March
2019 2018 2019
Summary of results GBP'000 GBP'000 GBP'000
Revenue 52,792 50,300 101,095
Adjusted operating profit (excluding
IAS19 impact) 2,826 2,054 4,262
Operating profit 2,554 1,782 3,408
Adjusted profit before tax (excluding
IAS19 impact) 2,557 1,956 3,962
Impact of IAS19 (548) (542) (1,386)
Profit before tax 2,009 1,414 2,576
--------------------------------------- ----------------- ----------------- -------------
Half year Half year Full year
to 28 September to 29 September to 30 March
2019 2018 2019
GBP'000 GBP'000 GBP'000
Revenue
James Cropper Paper 37,992 37,227 74,318
James Cropper 3D Products 1,211 135 290
Technical Fibre Products 13,589 12,938 26,487
---------------------------------------- ----------------- ----------------- -------------
52,792 50,300 101,095
Adjusted operating profit (excluding
IAS19 impact) 2,826 2,054 4,262
Net interest (excluding IAS19 impact) (269) (98) (300)
---------------------------------------- ----------------- ----------------- -------------
Adjusted profit before tax (excluding
IAS19 impact) 2,557 1,956 3,962
IAS19 pension adjustments
Net current service charge against
operating profits (273) (272) (854)
Finance costs charged against interest (275) (270) (532)
---------------------------------------- ----------------- ----------------- -------------
(548) (542) (1,386)
---------------------------------------- ----------------- ----------------- -------------
Profit before tax 2,009 1,414 2,576
---------------------------------------- ----------------- ----------------- -------------
Balance sheet summary Half year Half year Full year
to 28 September to 29 September to 30 March
2019 2018 2019
GBP'000 GBP'000 GBP'000
Non-pension assets - excluding
cash 67,304 61,820 64,871
Right of use assets* - net book 4,016 - -
value
Non-pension liabilities - excluding
borrowings (15,704) (15,709) (16,236)
Right of use leases* (4,506) - -
------------------------------------- ----------------- ----------------- -------------
51,110 46,111 48,635
Net IAS19 pension deficit (after
deferred tax) (18,351) (16,447) (18,798)
------------------------------------- ----------------- ----------------- -------------
32,759 29,664 29,837
Net borrowings (excluding Right
of use leases*) (10,817) (6,626) (8,561)
------------------------------------- ----------------- ----------------- -------------
Equity shareholders' funds 21,942 23,038 21,276
------------------------------------- ----------------- ----------------- -------------
Gearing % - before IAS19 deficit
and IFRS 16* 27% 17% 21%
Gearing % - after IAS19 deficit
and IFRS 16* 70% 29% 40%
Capital expenditure 3,284 1,9,44 5,229
* refer to Note 1 and Note 9 for adoption of IFRS 16 adopted 31
March 2019.
Dear Shareholders
I am pleased to report that James Cropper PLC recorded a 5%
increase in revenue for the first half, compared to the prior year
comparative, with growth in all divisions. Adjusted profit before
tax (excluding the impact of IAS 19) was GBP2.6m for the first half
of the current financial year, compared to GBP1.9m in the prior
comparative period. After the impact of IAS19, profit before tax is
GBP2.0m, up from GBP1.4m in the prior comparative period.
In Paper, the product portfolio mix improvement strategy is
progressing and pulp prices have softened bringing the division
back to a profitable position. Meanwhile, TFP profits have grown in
the period on record first half sales. For the first time,
Colourform(TM) revenue exceeded the GBP1m milestone.
Technical Fibre Products ("TFP")
TFP has delivered its best sales performance for a first half
year, with 5% revenue growth over the comparable period last year
and is expected to deliver further growth in the second half. There
was growth across all the targeted global market sectors, with
notable performances in the aerospace, defence and fuel cell
markets. Plans for additional non-woven capability at Burneside,
which will increase capacity by a further 50% by the end of the
2020 calendar year, are on track.
James Cropper Paper ("Paper")
Paper revenues have grown by 2% compared to the comparable
period last year, with growth seen in all geographical markets -
except the UK. Further improvement in value of the product
portfolio and the softening of pulp prices over the first half of
the year has returned the division to profitability.
Further commercialisation of CupCyclingä has increased the
output of the existing coffee cup recycling plant, providing
further independence from virgin pulp. As the proportion of
recycled coffee cup pulp currently used is relatively low compared
to virgin pulp, we are actively working on increasing recycling
capacity and capability to make greater use of waste fibres.
Colourform(TM) ("3D Products")
Colourformä revenues in the first half exceeded the GBP1m
milestone and have been generated predominantly in Europe in the
beauty and cosmetics market. The Colourform(TM) business is fully
engaged with a pipeline of projects that demonstrate strong
interest in high quality replacements for single use plastics. The
ability to provide a full range of colour is proving to be a unique
and defining feature.
Pension
The Group operates three pension schemes with close to 60% of
employees holding a defined contribution personal payment plan. The
two funded pension schemes provide defined benefits - for a
decreasing number of its employees. The IAS19 valuations, for the
defined benefit schemes as at 28 September 2019, revealed a
combined deficit of GBP22.1m, compared with GBP22.6m as at 30 March
2019. After deferred taxation the net deficit stands at
GBP18.4m.
Earnings per share and Dividend
Diluted earnings per share increased to 17.0 pence, compared to
12.9 pence in the prior year comparative period.
The Board has declared an interim dividend of 2.5p per share
(2018: 2.5p). The final dividend for the year to 28 March 2020 will
be subject to shareholder approval at the AGM on 29 July 2020.
Outlook
TFP has delivered its best ever sales performance for a half
year and is set to continue growth in the second half. Plans to
provide an additional 50% capacity in TFP by the end of the 2020
calendar year are on track. Paper sales are projected to grow year
on year with the benefits of an improved mix and a softening of
pulp price leading to a return to profit. Continued
commercialisation for the Colourformä business is projected as the
business gains further traction in the market. We have instituted
an Environmental, Social and Corporate Governance (ESG)
sub-committee and will commence formal measurement and reporting in
line with ESG objectives in 2020.
We invest significantly in people, innovation and capability.
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 results are anticipated to be in line
with management expectations.
Mark Cropper
Chairman
UN-AUDITED CONDENSED CONSOLIDATED INCOME STATEMENT
26 week period 26 week period
to 28 September to 29 September 52 week period
2019 2018 to 30 March 2019
---------------------------------------- ---------------- ---------------- -----------------
GBP'000 GBP'000 GBP'000
Revenue 52,792 50,300 101,095
---------------------------------------- ---------------- ---------------- -----------------
Operating profit 2,554 1,782 3,408
Finance costs
Interest payable and similar charges (567) (486) (965)
Interest receivable and similar
income 22 118 133
Profit before taxation 2,009 1,414 2,576
Taxation (382) (190) (262)
---------------------------------------- ---------------- ---------------- -----------------
Profit for the period 1,627 1,224 2,314
Earnings per share - basic and
diluted 17.0p 12.9p 24.3p
Dividend declared in the period
- pence per share 2.5p 2.5p 13.5p
UN-AUDITED CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
COMPREHENSIVE INCOME
Profit for the period 1,627 1,224 2,314
---------------------------------------- ---------------- ---------------- -----------------
Items that are or may be reclassified
to profit or loss
Foreign currency translation 96 137 (117)
Cash flow hedges - effective portion
of changes in fair value (32) 6 29
Items that will never be reclassified
to profit or loss
Retirement benefit liabilities
- actuarial
gain / (loss) 352 (509) (3,258)
Deferred tax on actuarial (gain)/loss
on retirement benefit liabilities (60) 87 554
Other comprehensive income/(expense)
for the period 356 (279) (2,850)
---------------------------------------- ---------------- ---------------- -----------------
Total comprehensive income for
the period attributable to equity
holders of the Company 1,983 945 (536)
---------------------------------------- ---------------- ---------------- -----------------
UN-AUDITED CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL
POSITION
28 September 29 September 30 March
2019 2018 2019
GBP'000 GBP'000 GBP'000
------------------------------- ------------ --------------- ----------------
Assets
Intangible assets 320 424 365
Property, plant and equipment 29,521 25,924 27,639
Right of use assets 4,016 - -
Deferred tax assets 3,759 2,112 2,234
------------------------------- ------------ --------------- ----------------
Total non-current assets 37,616 28,460 30,238
------------------------------- ------------ --------------- ----------------
Inventories 16,875 15,458 16,410
Trade and other receivables 19,337 18,771 19,012
Other financial assets - 53 24
Cash and cash equivalents 435 4,388 2,352
Current tax assets 1,251 1,190 1,421
Total current assets 37,898 39,860 39,219
------------------------------- ------------ --------------- ----------------
Total assets 75,514 68,320 69,457
------------------------------- ------------ --------------- ----------------
Liabilities
Trade and other payables 14,075 14,452 14,620
Other financial liabilities 12 - -
Loans and borrowings 1,275 1,672 1,545
Right of use leases 637 - -
Total current liabilities 15,999 16,124 16,162
Long-term borrowings 9,977 9,342 9,368
Right of use leases 3,869 - -
Retirement benefit liabilities 22,110 19,816 22,648
Deferred tax liabilities 1,617 - -
Total non-current liabilities 37,573 29,158 32,016
------------------------------- ------------ --------------- ----------------
Total liabilities 53,572 45,282 48,181
------------------------------- ------------ --------------- ----------------
Equity
------------------------------- ------------ --------------- ----------------
Share capital 2,389 2,386 2,389
Share premium 1,588 1,569 1,588
Translation reserve 499 657 403
Reserve for own shares (1,251) (1,246) (1,251)
Retained earnings 18,717 19,672 18,147
------------------------------- ------------ --------------- ----------------
Total shareholders' equity 21,942 23,038 21,276
------------------------------- ------------ --------------- ----------------
Total equity and liabilities 75,514 68,320 69,457
------------------------------- ------------ --------------- ----------------
UN-AUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
26 week period 26 week period
to 28 September to 29 September 52 week period
2019 2018 to 30 March 2019
--------------------------------------------- ---------------- ---------------------------- ---------------------
GBP'000 GBP'000 GBP'000
Cash flows from operating activities
Net profit 1,627 1,224 2,314
Adjustments for:
Tax 382 190 262
Depreciation and amortisation 1,911 1,394 2,952
Net IAS 19 pension adjustments within
Statement of comprehensive income 548 542 1,386
Past service pension deficit payments (734) (707) (1,468)
Foreign exchange differences (77) (190) (312)
Profit on disposal of property, plant
and equipment - (11) (12)
Net bank interest expense 269 98 300
Share based payments 188 (24) (49)
Changes in working capital:
Increase in inventories (454) (585) (1,529)
Decrease / (Increase) in trade and other
receivables 1,644 214 (2,072)
(Decrease) / increase in trade and other
payables (2,331) (699) 1,659
Tax paid (177) 272 (65)
--------------------------------------------- ---------------- ---------------------------- ---------------------
Net cash generated from operating activities 2,796 1,718 3,366
Cash flows from investing activities
Purchase of intangible assets (34) (7) (67)
Purchases of property, plant and equipment (3,250) (1,937) (5,162)
Proceeds from sale of property, plant
and equipment - 11 12
Net cash used in investing activities (3,284) (1,933) (5,217)
Cash flows from financing activities
Proceeds from issue of ordinary shares - 113 135
Proceeds from issue of new loans 913 1,194 1,568
Repayment of borrowings (864) (845) (1,311)
Repayment of right of use leases (358) - -
Interest received 22 118 133
Interest paid (212) (216) (391)
Purchase of LTIP investments - (315) (315)
Sale of own shares - - 130
Dividends paid to shareholders (1,038) (1,027) (1,263)
--------------------------------------------- ---------------- ---------------------------- ---------------------
Net cash used in financing activities
financingactactivitiesactivities (1,537) (978) (1,314)
Net decrease in cash and cash equivalents (2,025) (1,193) (3,165)
Effect of exchange rate fluctuations
on cash held 108 24 (40)
--------------------------------------------- ---------------- ---------------------------- ---------------------
Net decrease in cash and cash equivalents (1,917) (1,169) (3,205)
Cash and cash equivalents at the start
of the period 2,352 5,557 5,557
Cash and cash equivalents at the end
of the period 435 4,388 2,352
Cash and cash equivalents consists of:
Cash at bank and in hand 435 4,388 2,352
--------------------------------------------- ---------------- ---------------------------- ---------------------
UN-AUDITED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN
EQUITY
Share Translation Retained
capital Share premium reserve Own shares earnings Total
----------------------------- --------- ------------- ---------------- ---------- --------------- --------------
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------------- --------- ------------- ---------------- ---------- --------------- --------------
At 30 March 2019 2,389 1,588 403 (1,251) 18,147 21,276
Impact of IFRS 16 - - - - (467) (467)
At 30 March 2019 restated* 2,389 1,588 403 (1,251) 17,680 20,809
Profit for the period - - - - 1,627 1,627
Exchange differences - - 96 - - 96
Loss on cash flow hedges - - - - (32) (32)
Actuarial gain on retirement
benefit liabilities (net of
deferred tax) - - - - 292 292
Total other comprehensive
income - - 96 - 260 356
Dividends paid - - - - (1,038) (1,038)
Share based payments - - - - 188 188
Proceeds from issue of
ordinary
shares - - - - - -
Distribution of own shares - - - - - -
Consideration paid for own
shares - - - - - -
----------------------------- --------- ------------- ---------------- ---------- --------------- --------------
Total contributions by and
distributions to owners of
the Group - - - - (850) (850)
----------------------------- --------- ------------- ---------------- ---------- --------------- --------------
At 28 September 2019 2,389 1,588 499 (1,251) 18,717 21,942
----------------------------- --------- ------------- ---------------- ---------- --------------- --------------
At 31 March 2018 2,370 1,472 520 (1,445) 20,429 23,346
Profit for the period - - - - 1,224 1,224
Exchange differences - - 137 - - 137
Gain on cash flow hedges - - - - 6 6
Actuarial loss on retirement
benefit liabilities (net of
deferred tax) - - - - (422) (422)
Total other comprehensive
income - - 137 - (416) (279)
Dividends paid - - - - (1,027) (1,027)
Share based payment charge - - - - (154) (154)
Proceeds from issue of
ordinary
shares 16 97 - - - 113
Distribution of own shares - - - 514 (384) 130
Consideration paid for own
shares - - - (315) - (315)
----------------------------- --------- ------------- ---------------- ---------- --------------- --------------
Total contributions by and
distributions to owners of
the Group 16 97 - 199 (1,565) (1,253)
----------------------------- --------- ------------- ---------------- ---------- --------------- --------------
At 29 September 2018 2,386 1,569 657 (1,246) 19,672 23,038
----------------------------- --------- ------------- ---------------- ---------- --------------- --------------
* Please refer to note 9 for adjustments on transition following
adoption of IFRS 16 - Leases.
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). The condensed consolidated
half year financial statements of the Company for the twenty six
weeks ended 28 September 2019, 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 28 September 2019 and 29 September 2018 are
unaudited and were approved by the Directors on 18 November 2019.
They do not constitute statutory accounts as defined in s434 of the
Companies Act 2006. The financial statements for the year ended 30
March 2019 were prepared in accordance with International Financial
Reporting Standards (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 Financial Reporting
Standards as adopted by the European Union, under the historical
cost convention. 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 interim financial statements
have been prepared in accordance with the accounting policies
applied in the preparation of the Group's published consolidated
financial statements for the 52 week period ended 30 march 2019,
with the exception of the changes due to the adoption of IFRs 16,
which are discussed in the new standards adopted section and note 9
below.
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.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 have performed a robust assessment, including
review of the forecast for the 52 week period ending 28 March 2020
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 2019. 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.
New and amended standards adopted by the Group
In the current year, the Group for the first time, has applied
IFRS 16 - Leases. The Group has adopted IFRS 16 - Leases using the
modified retrospective approach, with the cumulative effect of
adopting IFRS 16 being recognised as an adjustment to the opening
balance of retained earnings at 31 March 2019 with no restatement
of comparative information.
For contracts in place at the date of adoption, the Group
recognised liabilities in relation to leases which had previously
been classified as operating leases under the principles of IAS 17-
Leases. These liabilities were measured at the present value of the
remaining lease payments, discounted using the borrowing rate as of
31 March 2019. For leases previously accounted for as operating
leases with a remaining lease term of less than 12 months and for
leases of low-value assets (less than $5,000), the Group has
applied the optional exemptions to not recognise the right of use
assets but to account for the lease expense on a straight line
basis over the remaining lease term.
On transition to IFRS 16 the weighted average incremental
borrowing rate applied to lease liabilities recognised under IFRS
16 was 3.6%.
The following is a reconciliation of total operating lease
commitments at 30 March 2019 to the lease liabilities recognised at
31 March 2019:
GBP'000
------------------------------------------------------------- --------
Total operating lease commitments disclosed at 30 March
2019 4,352
Discounted using the lessee's incremental borrowing rate
at 31 March 2019 (1,322)
Less: short term leases recognised on a straight line basis
as expense (6)
Add: Adjustments as a result of a different treatment of
extension and termination options 1,143
Total lease liability recognised under IFRS 16 as at 31
March 2019 4,167
------------------------------------------------------------- --------
For any new contracts entered into on or after 31 March 2019,
the Group considered whether a contract is, or contains a lease. A
lease is defined as a contract, or part of a contract, that conveys
the right to use of an asset for a period of time in exchange for
consideration. To apply this definition the Group assess whether
the contract meets three key evaluations which are whether:
-- the contract contains an identified asset, which is either
explicitly identified in the contract or implicitly specified by
being identified at the time the asset is made available to the
Group;
-- the Group has the right to obtain substantially all of the
economic benefits from use of the identified asset throughout the
period of use, considering its rights within the defined scope of
the contract; and
-- the Group has the right to direct the use of the identified
asset throughout the period of use. The group assesses whether it
has the right to direct the use of the identified assets throughout
the period of use. The Group assesses whether it has a right to
direct how and for what purpose the asset is used throughout the
period of use.
Measurement and recognition of leases
At the lease commencement date, the group recognises a right of
use asset and a lease liability on the balance sheet. The right of
use asset is measured at cost, which is made up of the initial
measurement of the lease liability, any initial direct costs
incurred by the Group, an estimate of any costs to dismantle and
remove the asset at the end of the lease, and any lease payments
made in advance of the lease commencement date. The Group
depreciates the right of use assets on a straight line basis from
the lease commencement date to the earlier of the end of the useful
life of the right to use asset or the end of the lease term. The
Group also assesses the right of use asset for impairment where
such indicators exist.
Lease payments included in the measurement of the lease
liability are made up of fixed payments, variable payments based on
an index or rate, amounts expected to be payable under a residual
guarantee and payments arising from options reasonably certain to
be exercised. Subsequent to initial measurement, the liability will
be reduced for payments made and increased for interest. It is
remeasured to reflect any reassessment or modification, or if there
are changes in payments. When the lease liability is remeasured,
the corresponding adjustment is reflected in the right of use
asset, or profit and loss if the right of use asset is already
reduced to zero.
The Group has elected to account for short term leases and
leases of low value assets using the practical expedients. Instead
of recognising a right of use asset and lease liability, the
payments in relation to these are recognised as an expense in
profit or loss on a straight line basis over the term of the
lease.
Where fixed assets are financed by leasing arrangements, which
gives rights approximating to ownership, the assets are treated as
if they had been purchased and the capital element of the leasing
commitments are shown as obligations under finance leases. Assets
acquired under finance leases are initially recognised at the
present value of the minimum lease payments. The rentals payable
are apportioned between interest, which is charged to the income
statement, and liability, which reduces the outstanding obligation
so as to give a constant rate of charge on the outstanding lease
obligations.
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 52 week period ended 30
March 2019.
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 2019 Annual Report on pages 21-25. The
principal risks set out in the 2019 Annual Report were:
Employee health & 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 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 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.
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 EBITDA and EPS targets
used in management incentive schemes.
5 Earnings per share
Six months ended Six months ended Year ended
28 September 29 September 30 March
2019 2018 2019
--------------------------------- ----------------- ----------------- -----------
Earnings per share - basic
and diluted 17.0p 12.9p 24.3p
Profit for the financial period
(GBP'000) 1,627 1,224 2,314
--------------------------------- ----------------- ----------------- -----------
Weighted average number of
shares -
basic and diluted 9,554,803 9,483,193 9,516,325
6 Dividends
The proposed interim dividend of 2.5p (2018: 2.5p) per 25p
ordinary share is payable on 10 January 2020 to those shareholders
on the register of the Company at the close of business on 29
November 2019, with the last day for DRIP elections being 13
December 2019. The dividend recognised in the condensed
consolidated statement of changes in equity is the final dividend
for the 52 week period ended 30 March 2019 of 11.0p which was paid
on 9 August 2019.
7 Retirement benefit obligations
Movements during the period in the Group's defined benefit
pension schemes are set out below:
26 week period 26 week period 52 week period
ended 28 September ended 29 September ended 30 March
2019 2018 2019
------------------------------- ----------------------- ----------------------- -------------------
GBP'000 GBP'000 GBP'000
Obligation brought forward (22,648) (19,472) (19,472)
Expense recognised in the
income statement (806) (826) (1,955)
Contributions paid to the
schemes 992 991 2,037
Remeasurement gains and
(losses) 352 (509) (3,258)
------------------------------- ----------------------- ----------------------- -------------------
Obligation carried forward (22,110) (19,816) (22,648)
------------------------------- ----------------------- ----------------------- -------------------
8 Alternative performance measures
26 week period 26 week period 52 week period
ended 28 September ended 29 September ended 30 March
2019 2018 2019
GBP'000 GBP'000 GBP'000
Adjusted operating profit 2,826 2,054 4,262
Net IAS 19 pension adjustments
- current service
costs (547) (542) (1,386)
- finance costs 275 270 532
----------------------------------------------- ----------------------- ----------------------- -------------------
Operating profit 2,554 1,782 3,408
----------------------------------------------- ----------------------- ----------------------- -------------------
26 week period 26 week period 52 week period
ended 28 September ended 29 September ended 30 March
2019 2018 2019
GBP'000 GBP'000 GBP'000
Adjusted profit before tax 2,557 1,956 3,962
Net IAS 19 pension adjustments
- current service
costs (531) (556) (1,423)
- future service
contributions
paid 258 284 569
- finance costs (275) (270) (532)
----------------------------------------------- ----------------------- ----------------------- -------------------
Profit before tax 2,009 1,414 2,576
----------------------------------------------- ----------------------- ----------------------- -------------------
9 IFRS 16 - Right of use assets and leases
Right of use assets
Carrying amount
--------------------------------- -------------------------------------
Land and Plant, equipment
Buildings and vehicles Total
--------------------------------- ---------- ---------------- -------
GBP'000 GBP'000 GBP'000
Balance at 30 March 2019 - - -
Adjustment on transition to IFRS
16 3,378 321 3,699
--------------------------------- ---------- ---------------- -------
Balance at 31 March 2019 after
adoption of IFRS 16 3,378 321 3,699
Additions 441 - 441
Depreciation (235) (66) (301)
Effects of movements in foreign
exchange 177 - 177
--------------------------------- ---------- ---------------- -------
Balance at 28 September 2019 3,761 255 4,016
--------------------------------- ---------- ---------------- -------
Right of use leases
28 September 29 September 30 March
2019 2018 2019
--------------------------------- ------------- ------------- ---------
GBP'000 GBP'000 GBP'000
Balance at 30 March 2019 - - -
Adjustment on transition to IFRS
16 4,167 - -
--------------------------------- ------------- ------------- ---------
Balance at 31 March 2019 after
adoption of IFRS 16 4,167 - -
New leases 441 - -
Interest charges 79 - -
Repayments (358) - -
Effects of movements in foreign
exchange 177 - -
--------------------------------- ------------- ------------- ---------
Balance at 28 September 2019 4,506 - -
--------------------------------- ------------- ------------- ---------
Lease liabilities (current) 637 - -
Lease liabilities (non-current) 3,869 - -
--------------------------------- ------------- ------------- ---------
4,506 - -
--------------------------------- ------------- ------------- ---------
Amounts recognised in profit and loss
The Group has elected not to recognise a lease liability for
short term leases (leases with an expected term of 12 months or
less) or for leases of low value assets. Payments made under such
leases are expenses on a straight line basis. During the six months
to 28 September 2019, in relation to leases under IFRS 16 the Group
recognised the following amounts in the consolidated income
statement:
26 weeks
to 28 September
2019
-------------------------- ------------------
GBP'000
Depreciation charge 301
Interest expense 79
Short term lease expense 44
-------------------------- ------------------
424
-------------------------- ------------------
The principal operating lease agreements in place that now fall
under IFRS16 include the following:
Factory and offices USA:
The Group entered into a building lease agreement for a
non-cancellable term of 10 years from September 2011, with an
option to extend for a further 5 years. In June 2018, the Group
re-negotiated the lease term to extend the lease until September
2031, with an option to extend for a further 5 years.
Factory and offices in Crewe:
The Group entered into a building lease agreement for a term of
6 years from December 2018. The lease agreement may be terminated
after December 2021 by giving the landlord not less than six
months' previous written notice on 6 June 2021.
Warehouse in Milnthorpe:
The Group entered into a building lease agreement for a term of
10 years from May 2015. The lease agreement may be terminated from
May 2020 subject to not less than six months' prior written
notice.
Warehouse in Milnthorpe:
The Group entered into a building lease agreement for a term of
5 years from February 2019.The lease agreement may be terminated
from February 2021 subject to not less than six months' prior
written notice.
Company cars:
The Group has entered into a number of lease agreements for
company cars with terms varying from 3 years to 5 years.
10 Related parties
There have been no significant changes in the nature of related
party transactions in the period ended 28 September 2019 from that
disclosed in the 2019 Annual report.
Statement of Directors' responsibilities
The Directors confirm that these condensed consolidated interim
financial statements have been prepared in accordance with IAS 34
as adopted by the European Union 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.
During the period since approval of the Annual Report for the 52
weeks ended 30 March 2019, David Wilks retired as a Non-Executive
Director on 31 July 2019 and Lyndsey Scott was appointed as a
Non-Executive Director on 1 August 2019.
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.
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
IR LLFLDLFLTLIA
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