12 November 2013
James Cropper plc
the niche specialist paper and materials group, is pleased to announce its
|
Half-year to 28 September 2013 |
Half-year to 29 September 2012 |
Full-year to 30 March 2013
|
Turnover |
£42.3m |
£39.0m |
£79.2m |
|
|
|
|
EBITDA (before net IAS19 pension adjustment) |
£2.2m |
£2.9m |
£5.4m |
Profit before tax |
|
|
|
Trading profit after interest |
£0.6m |
£1.2m |
£2.0m |
IAS 19 pension adjustment |
(£0.4m) |
(£0.2m) |
(£0.2m) |
|
£0.2m |
£1.0m |
£1.8m |
Earnings per share - diluted |
1.8p |
8.9p |
16.5p |
Dividends per share |
2.2p |
2.2p |
7.9p |
Gearing (before IAS 19 pension deficit) |
37% |
31% |
33% |
Gearing (after IAS 19 pension deficit) |
55% |
45% |
46% |
Capital expenditure |
£0.9m |
£1.2m |
£4.1m |
· Speciality Papers sales in H1 were up 10% on the comparable period.
|
|||
· Converting sales in H1 were up 15% primarily due to sales of higher margin products.
|
|||
· TFP's sales in H1 were down 5% as a consequence of customer ordering patterns.
|
|||
· TFP is at an advanced stage of qualification to supply material for a major new airliner programme.
|
|||
· TFP have commissioned a £1.5 million nano-carbon coating line at their facility in the USA.
|
|||
· Speciality Papers has secured major business with a number of global luxury brands and premier wallpaper companies that will materialise as sales in the second half.
|
|||
· Speciality Papers' Reclaimed Fibre plant will allow levels of pulp substitution to be of the order of 12% by the end of the financial year.
|
|||
· Speciality Papers' margins impacted by higher input costs and "green" levies but partially offset by increased used of reclaimed fibre.
|
|||
· Speciality Papers will have established a subsidiary company in mainland China for the purpose of selling and marketing by the end of the financial year.
|
|||
· Impending creation of Operations and Technology & Innovation Directorates. |
"The resurgence of sales in Speciality Papers and further sales growth in Converting is very encouraging. I am looking to sustain this growth in our paper based businesses in the second half. This year the imposition of additional "green" levies, higher energy costs and the rising price of pulp will have a negative effect on the profitability of Speciality Papers. These costs will be partly mitigated by the increasing use of fibre from our new Reclaimed Fibre facility.
"The short fall in TFP sales in the first half was expected, however sales are expected to increase in the final quarter.
"At the Group level, restructuring will be largely complete in the current financial year and will cost in the region of £0.4 million.It is anticipated that Group operating profitability for the second half of the year will be significantly higher than that achieved in the first, however the impact of inflated input costs - namely higher than anticipated rises in NBSK and gas - will not be fully recovered in the second half. I therefore feel that at the present time it is prudent to anticipate an out turn for the full financial year in line with last year's PBT.
"I am very pleased with the progress of our restructuring and investment plans. These are providing us with a strong platform for near and long term growth and our ambitions remain significant. The Group has made a number of significant investments in the current period across all aspects of the business and whilst these have combined with higher input costs to impact the current year's profitability we are confident that they provide a stronger platform to future growth."
Mark Cropper, Chairman
Enquiries: |
|
John Denman, Group Finance Director |
Richard Baty, Director, Corporate Finance |
James Cropper PLC (AIM:CRPR.L) |
Westhouse Securities Limited |
Telephone: +44 (0) 1539 722002 |
Telephone: +44 (0) 20 7601 6100 |
www.westhousesecurities.com |
Summary of Results |
Half-year to |
Half-year to |
Full-year to |
|
28 September |
29 September |
30 March |
|
2013 |
2012 |
2013 |
Profit and Loss Summary £'000 |
|
|
|
Group turnover £'000 |
42,322 |
39,037 |
79,241 |
|
|
|
|
Trading profit |
782 |
1,449 |
2,535 |
Add back: Depreciation |
1,396 |
1,406 |
2,818 |
EBITDA (before IAS 19 pension adjustment) |
2,178 |
2,855 |
5,353 |
|
|
|
|
Trading profit before interest |
782 |
1,449 |
2,535 |
Net interest |
(220) |
(264) |
(483) |
Trading profit before tax |
562 |
1,185 |
2,052 |
(After future service pension contributions paid) |
|
|
|
Net IAS 19 pension adjustments to |
|
|
|
Operating profit |
(113) |
(245) |
(426) |
Net interest |
(233) |
89 |
193 |
Net pension adjustment before tax |
(346) |
(156) |
(233) |
|
|
|
|
Overall Group after pension adjustments |
|
|
|
Profit before interest |
669 |
1,204 |
2,109 |
Net interest |
(453) |
(175) |
(290) |
Profit before tax |
216 |
1,029 |
1,819 |
|
|
|
|
|
|
|
|
Earnings per Share - diluted |
1.8p |
8.9p |
16.5p |
|
|
|
|
Dividends per share |
2.2p |
2.2p |
7.9p |
|
|
|
|
Balance Sheet Summary £'000 |
|
|
|
Non-pension assets - excluding cash |
48,813 |
47,202 |
48,426 |
Non-pension liabilities - excluding borrowings |
(10,394) |
(10,903) |
(10,831) |
|
38,419 |
36,299 |
37,595 |
Net IAS 19 pension deficit (after deferred tax) |
(9,375) |
(9,013) |
(7,972) |
|
29,044 |
27,286 |
29,623 |
Net borrowings |
(10,286) |
(8,477) |
(9,286) |
Equity shareholders' funds |
18,758 |
18,809 |
20,337 |
|
|
|
|
Gearing % - before IAS 19 deficit |
37% |
30% |
33% |
|
|
|
|
Gearing % - after IAS 19 deficit |
55% |
45% |
46% |
|
|
|
|
Capital Expenditure £'000 |
941 |
1,219 |
4,072 |
STATEMENT BY THE CHAIRMAN, M A J CROPPER
Group turnover for the half year was up 8% on the comparable period at £42.3 million. Despite increased revenues the first half of the year saw a fall in Group profits before tax (but after IAS19 pension adjustment), of approximately £800,000 to £216,000. Prior to the IAS19 pension adjustment profit before tax was £562,000 against £1,185,000 last year.
The reduction in profitability was largely anticipated due to higher input costs that the Group was unable to pass through to its customers and an increase in green levies. The higher input costs were partially mitigated by the Group's Reclaimed Fibre plant. This will make a greater contribution going forward as we expect to be able to increase the proportion of recycled feedstock into end product.
Technical Fibre Products ("TFP")
In line with management expectations TFP's first half sales were down 5% overall on last year as a consequence of the ordering pattern of a number of major customers in the Defence sector. Aerospace sales were up 52%. Significantly, TFP is at an advanced stage of qualification to supply material for a major new airliner programme which, on commercialisation will lead to a long term revenue flow. Sales into the fuel cell market were up 100% driven by demand for TFP's material in the construction of phosphoric acid fuel cell standby plants.
All US activities have now been relocated to our new facility inSchenectady, New York State. TFP has recently commissioned a £1.5 million nano-carbon coating line at Schenectady encouraged by the requirements of existing and potential new customers. We believe this investment will place TFP in a leading position with regard to the development of this new technology and will be of long term benefit.
James Cropper Speciality Papers ("Speciality Papers")
In Speciality Papers total sales in the opening half were up 10% on the comparable period. Export sales increased by 17% whilst UK sales were up 5%. Overall volume was up 12%, with export volumes up 16%.
We are beginning to see benefits flowing from our increased market focus. In the first six months we have secured major business with a number of global luxury brands and premier wallpaper companies that will materialise as sales in the second half.
The cost of Northern Bleached Softwood Kraft ("NBSK") pulp opened at US$830/tonne and increased to US$870/tonne at the close of the period and has continued on a rising trend. Pulp costs were up some £0.5 million on the first half of the past financial year.
Considerable progress has been made with regard to pulp substitution by fibre produced from our new Reclaimed Fibre plant, with levels of substitution expected to be of the order of 12% by the end of the financial year. The plant uses innovative technology to extract fibre from specific paper-based consumer products, such as disposable coffee cups, which would otherwise be difficult to recycle. This fibre is extremely high quality which makes it an ideal substitute for wood-pulp and helps us to mitigate the impact of pulp price volatility.
The unit commodity cost of natural gas in the first half was up 17% with the overall cost of consumption being £2.3 million compared to £1.9 million in the comparable period.
Phase 3 of EUETS, a mandatory EU scheme relating to carbon dioxide emissions, was introduced as from 1 January 2013. Under Phase 3 our annual allowances were reduced from 41,000 tonnes to 17,000 tonnes per annum. Given that our annual emissions are in the region of 39,000 tonnes we have had to purchase further allowances for the balance of 22,000 tonnes. In addition, as from 1 April 2013 the Group was also subject to the Carbon Price Floor. This levy is a UK Government "green" tax, which places UK producers at a competitive disadvantage compared with competitors in the rest of EU as well as those in the rest of the world. These two measures will add £0.4 million to Speciality Papers' cost base in the current financial year.
Despite the award of a Regional Growth Fund ("RGF") grant in October 2012 the Board has decided not to proceed with an investment in a steam raising boiler. It was our intention that the plant would be fuelled by a mixture of solid recovered fuel produced from municipal waste and the Group's own paper-making effluent residues. Our decision has been principally influenced by restrictions imposed by EU State Aid rules requiring that the boiler be fuelled by waste wood for a number of years in order to receive the full grant. This fuel option is high risk, even with a RGF grant of £2.9 million, because it would necessitate us having to invest a significant sum of capital to allow us to substitute one expensive source of energy, gas, for another expensive source of energy, waste wood.
James Cropper Converting ("Converting")
Converting traded ahead of the first half of last year. Sales were up 15% primarily due to sales of higher margin products.
Restructuring and Investment
Our restructuring continues with the impending creation of Operations and Technology & Innovation Directorates. Dave Watson will join the Group as Chief Operating Officer in January 2014 being responsible for all global manufacturing activities. It is also anticipated that he will be appointed to the Board of the Company. Dave has a strong manufacturing background with more than 25 years' experience in the Industrial, Automotive, Healthcare and Security markets. He is currently the Site Manager for 3M Personal Safety Division at Aycliffe.
January will also see the appointment of Patrick Willink, currently Operations Director for Speciality Papers, as Chief Technology Officer with a brief to explore, develop and deploy new products and technologies to support both the Group's existing businesses and any future investment in new business opportunities.
We also continue to strengthen the sales and marketing capability of each of our businesses through selective recruitment in order to deliver our growth plans. To increase market awareness of our capability we have staged a number of high profile events in the UK and abroad.
By the latter part of the current financial year Speciality Papers will have established a subsidiary company in mainland China for the purpose of selling and marketing within China. This will allow customers to retain full chain of custody over products supplied and to be invoiced in local currency. The subsidiary will be staffed by Chinese nationals.
Restructuring will be largely complete within the current financial year and will cost in the region of £0.4 million.
In addition we continue to progress our programme of investment to enhance our capacities and capabilities and to improve energy and raw material efficiencies. Total expenditure in the full year is anticipated to be in the region of £2.5 million, including TFP's nano-carbon coating line.
Pensions and International Accounting Standard 19 ("IAS 19")
In accordance with IAS 19 for accounting periods beginning on or after 1 January 2013, the expected return on assets has to be restricted to the discount rate used for valuing liabilities. This does not therefore reflect actual asset performance.
The expected rate of return on assets for the period ending 30 March 2013 was 5.63% p.a. However, for the period commencing 31 March 2013 the return on assets has been restricted to the discount rate of 4.65% p.a. This results in a lower expected return on assets for the period ending 28 September 2013 and therefore a higher finance cost. Thus although the overall liabilities of the Group's two defined benefit pension schemes decreased by 1.0% over the six months, the asset value of the schemes declined by 3.0%. As a result the schemes' combined deficit rose by £1,514,000 to £11,867,000 since the previous year end.
The net adverse impact of IAS 19 on profit for the six months is £346,000, compared to £156,000 for the comparable period. Finance costs were £233,000 adverse compared to £89,000 favourable in the comparable period.
Since 1 April 2011, when future increases in pensionable pay were capped at a maximum of 2% per annum, the combined deficit, net of deferred tax, has increased by £8,336,000 from £1,039,000 to £9,375,000. This deterioration is entirely due to the negative impact of Quantitative Easing, low interest rates and the change of accounting basis relating to expected return on assets.
Cash and borrowings
At 28 September 2013 gross drawn down loans and leases totalled £11.5 million, with £1.2 million held as cash at bank. In addition the Group had un-drawn overdraft facilities of £3.4 million, US$1.0 million and €1.0 million.
Gearing at the half year end, after deduction of the IAS 19 pension deficit, was 55% (before 37%).
Working capital continued to remain under tight control. In the second half gearing will ease upward as a consequence of increased expenditure on major revenue and capital projects.
Outlook
The resurgence of sales in Speciality Papers and further sales growth in Converting is very encouraging. I am looking to sustain this growth in our paper based businesses in the second half. This year the imposition of additional "green" levies, higher energy costs and the rising price of pulp will have a negative effect on the profitability of Speciality Papers. These costs will be partly mitigated by the increasing use of fibre from our new Reclaimed Fibre facility.
The short fall in TFP sales in the first half was expected, however sales are expected to increase in the final quarter.
At the Group level, restructuring will be largely complete in the current financial year and will cost in the region of £0.4 million.It is anticipated that Group operating profitability for the second half of the year will be significantly higher than that achieved in the first, however the impact of inflated input costs - namely higher than anticipated rises in NBSK and gas - will not be fully recovered in the second half. I therefore feel that at the present time it is prudent to anticipate an out turn for the full financial year in line with last year's PBT.
I am very pleased with the progress of our restructuring and investment plans. These are providing us with a strong platform for near and long term growth and our ambitions remain significant. The Group has made a number of significant investments in the current period across all aspects of the business and whilst these have combined with higher input costs to impact the current year's profitability we are confident that they provide a stronger platform to future growth.
Mark Cropper
Chairman
12 November
|
|
|
|
|
|
|
|
Un-audited Statement of Comprehensive Income for the period
|
|
||
|
26 weeks to |
26 weeks to |
52 weeks to |
|
28 September |
29 September |
30 March |
|
2013 |
2012 |
2013 |
|
£'000 |
£'000 |
£'000 |
Continuing operations |
|
|
|
Revenue |
42,322 |
39,037 |
79,241 |
|
|
|
|
Operating profit |
669 |
1,204 |
2,109 |
|
|
|
|
Finance Costs |
|
|
|
Interest payable and similar charges |
(454) |
(264) |
(492) |
Interest receivable and similar income |
1 |
89 |
202 |
Profit before taxation |
216 |
1,029 |
1,819 |
Taxation |
(50) |
(248) |
(374) |
Profit for the period |
166 |
781 |
1,445 |
|
|
|
|
Other comprehensive income: |
|
|
|
Foreign currency translation |
42 |
(32) |
(17) |
Retirement benefit liabilities - actuarial losses |
(1,633) |
(4,373) |
(3,382) |
Deferred tax on actuarial losses on retirement benefit liabilities |
343 |
1,006 |
533 |
Income tax on other comprehensive income |
- |
- |
176 |
Total comprehensive income for the period attributable to equity holders of the Company |
(1,082) |
(2,618) |
(1,245) |
|
|
|
|
|
|
|
|
Earnings per share - basic |
1.9p |
9.2p |
16.8p |
Earnings per share -diluted |
1.8p |
8.9p |
16.5p |
|
|
|
|
Dividend declared in the period - pence per share |
2.2p |
2.2p |
7.9p |
Un-audited Statement of Financial Position at |
|
|
|
|
|
28 September 2013 |
|
29 September 2012 |
30 March 2013 |
|
£'000 |
|
£'000 |
£'000 |
Assets |
|
|
|
|
Intangible assets |
399 |
|
775 |
515 |
Property, plant and equipment |
20,741 |
|
19,714 |
21,219 |
Deferred tax assets |
47 |
|
95 |
- |
Total non- current assets |
21,187 |
|
20,584 |
21,734 |
|
|
|
|
|
Inventories |
12,697 |
|
12,734 |
11,848 |
Trade and other receivables |
14,836 |
|
13,979 |
14,844 |
Cash and cash equivalents |
1,208 |
|
3,022 |
2,249 |
Current tax assets |
140 |
|
- |
- |
Total current assets |
28,881 |
|
29,735 |
28,941 |
|
|
|
|
|
Total assets |
50,068 |
|
50,319 |
50,675 |
|
|
|
|
|
Liabilities |
|
|
|
|
Trade and other payables |
7,921 |
|
8,211 |
8,138 |
Other financial liabilities |
28 |
|
41 |
32 |
Loans and borrowings |
2,401 |
|
3,823 |
4,013 |
Current tax liabilities |
- |
|
54 |
216 |
Total current liabilities |
10,350 |
|
12,129 |
12,399 |
|
|
|
|
|
Long-term borrowings |
9,093 |
|
7,676 |
7,522 |
Retirement benefit liabilities |
11,867 |
|
11,705 |
10,353 |
Deferred tax liabilities |
- |
|
- |
64 |
Total non-current liabilities |
20,960 |
|
19,381 |
17,939 |
|
|
|
|
|
Total liabilities |
31,310 |
|
31,510 |
30,338 |
|
|
|
|
|
Equity |
|
|
|
|
Share capital |
2,220 |
|
2,119 |
2,217 |
Share premium |
822 |
|
575 |
814 |
Translation reserve |
298 |
|
241 |
256 |
Reserve for own shares |
(102) |
|
(102) |
(102) |
Retained earnings |
15,520 |
|
15,976 |
17,152 |
Total shareholders' equity |
18,758 |
|
18,809 |
20,337 |
|
|
|
|
|
Total equity and liabilities |
50,068 |
|
50,319 |
50,675 |
Un-audited Consolidated Statement of Cash Flows
|
|
|
|
|
26 weeks to |
26 weeks to |
52 weeks to |
|
29 September |
29 September |
30 March |
|
2013 |
2012 |
2013 |
|
£'000 |
£'000 |
£'000 |
Cash flows from operating activities |
|
|
|
Net Profit |
166 |
781 |
1,445 |
Adjustments for: |
|
|
|
Tax |
50 |
248 |
374 |
Depreciation |
1,396 |
1,406 |
2,818 |
Net IAS 19 pension adjustments within SCI |
346 |
156 |
233 |
Past service pension deficit payments |
(465) |
(522) |
(960) |
Foreign exchange differences |
191 |
32 |
(55) |
Loss on disposal of property, plant and equipment |
37 |
- |
12 |
Net bank interest expense |
220 |
265 |
483 |
Share based payments |
(7) |
55 |
67 |
Changes in working capital: |
|
|
|
(Increase) / decrease in inventories |
(856) |
(374) |
519 |
(Increase) in trade and other receivables |
(2,340) |
(783) |
(1,546) |
Increase/ (decrease) in trade and other payables |
1,958 |
(1,123) |
(972) |
Interest received |
5 |
- |
9 |
Interest paid |
(233) |
(272) |
(506) |
Tax paid |
(174) |
(4) |
(107) |
Net cash generated from operating activities |
294 |
(135) |
1,814 |
|
|
|
|
Cash flows from investing activities |
|
|
|
Purchase of intangible assets |
(122) |
- |
(157) |
Purchases of property, plant and equipment |
(819) |
(1,219) |
(3,915) |
Proceeds from sale of property, plant and equipment |
3 |
- |
9 |
Net cash (used in) investing activities |
(938) |
(1,219) |
(4,063) |
|
|
|
|
Cash flows from financing activities |
|
|
|
Proceeds from issue of ordinary shares |
11 |
- |
337 |
Proceeds from issue of new loans |
1,372 |
688 |
5,844 |
Repayment of borrowings |
(1,212) |
(1,111) |
(6,385) |
Purchase of LTIP investments |
- |
(112) |
(112) |
Dividends paid to shareholders |
(501) |
(483) |
(677) |
Net cash (used in) from financing activities |
(330) |
(1,018) |
(993) |
Net (decrease) in cash and cash equivalents |
(974) |
(2,372) |
(3,242) |
Effect of exchange rate fluctuations on cash held |
(67) |
(44) |
53 |
Net (decrease) in cash and cash equivalents |
(1,041) |
(2,416) |
(3,189) |
Cash and cash equivalents at the start of the period |
2,249 |
5,438 |
5,438 |
Cash and cash equivalents at the end of the period |
1,208 |
3,022 |
2,249 |
|
|
|
|
Cash and cash equivalents consists of: |
|
|
|
Cash at bank and in hand |
1,208 |
3,022 |
2,249 |
Statement of Changes in Equity
|
|
|
|
|
|
|
Group |
Share capital |
Share premium |
Translation reserve |
Own Shares |
Retained earnings |
Total |
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
At 31 March 2012 |
2,119 |
575 |
273 |
(226) |
19,226 |
21,967 |
|
|
|
|
|
|
|
Profit for the period |
- |
- |
- |
- |
1,445 |
1,445 |
|
|
|
|
|
|
- |
Exchange differences |
- |
- |
(17) |
- |
- |
(17) |
Actuarial losses on retirement benefit liabilities (net of deferred tax) |
- |
- |
- |
- |
(2,673) |
(2,673) |
Total other comprehensive income |
- |
- |
(17) |
- |
(2,673) |
(2,690) |
|
|
|
|
|
|
|
Dividends paid |
- |
- |
- |
- |
(677) |
(677) |
Share based payment charge |
- |
- |
- |
|
67 |
67 |
Proceeds from issue of ordinary shares |
98 |
239 |
- |
- |
- |
337 |
Distribution of own shares |
- |
- |
- |
236 |
(236) |
- |
Consideration paid for own shares |
- |
- |
- |
(112) |
- |
(112) |
Total contributions by and distributions to owners of the Group |
98 |
239 |
- |
124 |
(846) |
(385) |
|
|
|
|
|
|
|
At 30 March 2013 |
2,217 |
814 |
256 |
(102) |
17,152 |
20,337 |
|
|
|
|
|
|
|
Profit for the period |
- |
- |
- |
- |
166 |
166 |
|
|
|
|
|
|
|
Exchange differences |
- |
- |
42 |
- |
- |
42 |
Actuarial losses on retirement benefit liabilities (net of deferred tax) |
- |
- |
- |
- |
(1,290) |
(1,290) |
Total other comprehensive income |
- |
- |
42 |
- |
(1,290) |
(1,248) |
|
|
|
|
|
|
|
Dividends paid |
- |
- |
- |
- |
(501) |
(501) |
Share based payment charge |
- |
- |
- |
|
(7) |
(7) |
Proceeds from issue of ordinary shares |
3 |
8 |
|
- |
|
11 |
Distribution of own shares |
- |
- |
- |
|
|
- |
Consideration paid for own shares |
- |
- |
- |
|
- |
- |
Total contributions by and distributions to owners of the Group |
3 |
8 |
- |
- |
(508) |
(497) |
|
|
|
|
|
|
|
At 28 September 2013 |
2,220 |
822 |
298 |
(102) |
15,520 |
18,758 |
Notes to the Un-audited Interim Results
1. Basis of the preparation of IFRS financial information
a. These interim results have been prepared in accordance with the historical cost convention, as modified by the revaluation of land and buildings, and derivative financial instruments, and in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union (with the exception of IAS 34, Interim Financial Reporting) and International Financial Reporting Interpretations Committee ("IFRIC") interpretations and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS.
Management has chosen to maintain the terminology that readers are familiar with, all references to:
i. "Profit and Loss Account" refers to the Statement of Comprehensive Income.
ii. "Balance Sheet" refers to the Statement of Financial Position.
iii. "Trading Operating Profit" refers to profits prior to income from joint ventures, other income and expenditure, interest on borrowings and "Net IAS 19 pension adjustment"
iv. "Trading Profit before Tax" refers to profits prior to "Net IAS 19 pension adjustment".
v. "Net IAS 19 pension adjustment" in the Profit and Loss Account refer to the net impact on the Profit and Loss Account of the pension schemes' operating costs and finance costs, as described in the IAS 19 section of the Financial Review.
b. The Group's policy is to maintain the ability to continue as a going concern, in order to provide returns to the shareholder and benefits to other stakeholders. Accordingly the going concern basis has been adopted in preparing these interim results.
2. Interim Statement
a. The summarised results for the half-year to 28 September 2013, which have not been audited or reviewed, have been prepared in accordance with the accounting policies adopted in the accounts for the 52 week year ended 30 March 2013.
b. The financial information set out above does not constitute statutory accounts within the meaning of the Companies Act 2006. The figures for the 52 week year ended 30 March 2013 are an extract of the full accounts for that year, which have been filed with the Registrar of Companies and on which the auditors gave an unqualified opinion.
c. A copy of the interim statement is available on our website (www.cropper.com).
3. Earnings per share
Basic and diluted earnings per share for the half year to 28 September 2013 have been calculated by dividing the profits attributable to ordinary shareholders by 8,872,629 (2012: 8,475,667) ordinary shares, being the weighted average number of ordinary shares during the period.
4. Dividend
A net interim dividend of 2.2p per Ordinary Share (2012: 2.2p per share) is proposed and will be paid on 10 January 2014 to holders on the register at the close of business on 13 December 2013. The dividend relating to the 52 week year to 30 March 2013 was made up of an interim payment of £193,000 (2.2p per share) and a final dividend payment of £483,000 (5.7p per share). The dividend is payable in cash. Shareholders have the opportunity to elect to reinvest their cash dividend and purchase existing shares in the Company through a Dividend Reinvestment Plan.
5. Pensions
IAS 19 regards a sponsoring company and its pension schemes as a single accounting entity rather than two or more separate legal entities. The actuarial valuation is the starting point for the creation of the IAS 19 accounting entity. The valuation determines the net position of a pension scheme, i.e. the difference between its assets and liabilities. The net position, surplus or deficit, is brought onto the sponsoring company's Balance Sheet such that Reserves are immediately adjusted by the net position reduced by deferred tax. This obviously results in either an increase or decrease in the net asset value of the sponsoring company. At subsequent period-ends the movement in value from the previous valuation is expressed in the following component parts:
Income Statement
Operating costs
Current service charge, being the cost of benefits earned in the current period shown net of employees' contributions.
§ Past service costs, being the costs of benefit improvements.
§ Curtailment and settlement costs.
Finance costs, being the net of
§ Expected return on pension scheme assets.
§ Interest cost on the accrued pension scheme liabilities.
Actuarial gains and losses arising from variances against previous actuarial assumptions. The above items are offset by actual contributions paid by the employer in the period. IAS19 deficits are shown below at the corresponding Balance Sheet dates.
|
Half-year to |
Half-year to |
Full-year to |
|
28 September |
29 September |
30 March |
|
2013 |
2012 |
2013 |
IAS19 DEFICIT |
£'000 |
£'000 |
£'000 |
Current Service Charge |
(453) |
(623) |
(1,163) |
Future service contributions paid |
340 |
378 |
737 |
Net impact on Operating Profit |
(113) |
(245) |
(426) |
Finance costs |
(233) |
89 |
193 |
Net impact on Profit and Loss Account |
(346) |
(156) |
(233) |
Past service deficit contributions paid |
465 |
522 |
960 |
Actuarial gains or losses |
(1,633) |
(4,373) |
(3,382) |
Opening deficit |
(10,353) |
(7,698) |
(7,698) |
Closing deficit |
(11,867) |
(11,705) |
(10,353) |
Deferred Taxation |
2,492 |
2,692 |
2,381 |
Net - Deficit |
(9,375) |
(9,013) |
(7,972) |
It should be noted that the assumptions underlying the IAS 19 valuation are based on financial conditions at the Balance Sheet date. As market values of the scheme assets and the discount factors applied to the scheme liabilities will fluctuate, this method of valuation will often lead to large variations in the "pension balance" from period to period. Pension liabilities are discounted at the current rate of return on an AA rated quality corporate bond of equivalent currency and term. The actual contributions paid by the Group to its two final salary schemes are determined by the actuaries' "on-going" valuation.
|
Half-year to |
Half-year to |
Full-year to |
|
28 September |
29 September |
30 March |
|
2013 |
2012 |
2013 |
Profit before Tax |
£'000 |
£'000 |
£'000 |
|
|
|
|
Trading profit |
562 |
1,185 |
2,052 |
|
|
|
|
Net pension adjustment |
|
|
|
Current Service Charge |
(453) |
(623) |
(1,163) |
Future service contributions paid |
340 |
378 |
737 |
Net impact on Operating Profit |
(113) |
(245) |
(426) |
Finance costs |
(233) |
89 |
193 |
Net impact on Profit before Tax |
(346) |
(156) |
(233) |
|
|
|
|
As reported |
216 |
1,029 |
1,819 |