Interim Results
Cropper(James) PLC
19 November 2002
Issued by Citigate Dewe Rogerson Ltd, Birmingham
Date: Tuesday, 19 November 2002
Embargoed: 7.30am
James Cropper PLC
'Specialist Paper Makers'
Interim Results
for the 26 weeks ended 28 September 2002
Half-year to Half-year to Full year to
September 2002 September 2001 March 2002
• Group profit before tax £1.1m £0.8m £1.5m
• Earnings per share 9.2p 6.2p 9.2p
• Dividend per share 1.9p 1.8p 7.0p
• Gearing 23% 36% 27%
• All divisions have traded profitably in the first six months
• Encouraging growth of TFP's fire protection materials in European
and Far Eastern markets
• TFP's joint development of fuel cell components with Johnson Matthey
continues to meet expectations
• Papermaking Division's pilot retail business extended to six stores
• Interim dividend increased by 5.6% to 1.9p
'TFP has continued the sharp recovery that started in the first quarter of this
calendar year with sales and operating profit substantially up on this time last
year'.
'Despite the huge increase in insurance premiums reported at the AGM and other
unfavourable factors, we are confident, in the absence of unforeseen
circumstances, that all three divisions will continue to trade at similar levels
in the second half'.
'Positive cash flow will continue for the rest of the financial year with
borrowings maintained at the current level.'
J A Cropper, Chairman
FULL STATEMENT ATTACHED
Enquiries:
Alun Lewis, Chief Executive
John Denman, Finance Director Alan Cooke
James Cropper PLC Citigate Dewe Rogerson
Today: 020 7282 8000 (8.00am-11.00am) Today: 020 7282 8000
Thereafter: 01539 722002 Thereafter: 0121 455 8370
www.cropper.com Mobile: 07767 771533
-2-
James Cropper PLC
Interim Results
for the 26 weeks ended 28 September 2002
STATEMENT BY THE CHAIRMAN, J A CROPPER
I am pleased to report that the Group's three divisions have traded profitably
in the opening half of the current financial year.
Group turnover is similar to last year at £27.5m with profit before tax
increasing by 47% to £1,121,000 (2001: £763,000) with a similar increase in
earnings per share to 9.2p (2001: 6.2p).
Strong cash flow in the first six months has reduced gearing from 27% to 23%
over the period.
The Directors have decided to reflect the improvement in profitability by
increasing the interim dividend by 5.6% from 1.8p to 1.9p per share.
Papermaking Division
Papermaking's increased operating profit was mainly attributable to lower raw
material costs and efficiency improvements. Suppliers' attempts to move the
price of pulp upward in the summer faltered reflecting subdued demand worldwide.
Naturally the Division is not immune from the current difficult trading
conditions affecting the UK paper industry and has consequently experienced a
slight decrease in volume and turnover. However we have had some success in
refocusing our business sector mix in favour of high value book publishing,
luxury packaging and design grades. This has improved the Division's average
sales unit price.
Converting Division
Converting's operating profit is down against the same period last year. Sales
were marginally up but there has been some reduction in volume. Profitability
on sales to the USA has been adversely affected by the weakening of the Dollar
against Sterling. In an extremely competitive marketplace it has not proved
possible to pass on raw material and other cost increases.
Technical Fibre Products ('TFP')
TFP has continued the sharp recovery that started in the first quarter of this
calendar year with sales and operating profit substantially up on this time last
year. There has been an improvement in all markets with encouraging growth of
TFP fire protection materials in European and Far Eastern markets. The joint
development with Johnson Matthey of fuel cell components continues to meet
expectations. However, TFP's profitability has also suffered from the weaker
US$.
The Paper Mill Shop Company Limited
In 2000 the Papermaking Division formed a new subsidiary known as 'The Paper
Mill Shop Company Limited', which by the end of the last financial year was
operating three retail outlets selling a wide variety of off-cut paper to the
general public.
This is another element in the diversification of the Group's business using
some of our existing competencies. We have been encouraged by the progress to
date and have decided to extend the pilot scheme to six outlets. This will
allow us to gain further experience before we can make a decision on further
expansion in this direction.
continued...
-3-
Outlook
Despite the huge increase in insurance premiums reported at the AGM and other
unfavourable factors, we are confident, in the absence of unforeseen
circumstances, that all three divisions will continue to trade at similar levels
in the second half. Additional capacity is available from existing facilities
to meet increases in turnover when more favourable market and economic
conditions return.
The Papermaking Division is realising increasing benefits from the Division's
improved efficiency based on a reduction in the usage of raw materials and
modernised working practices. It is regrettable that such savings are being
matched by cost increases in areas outside our control such as insurance and
natural gas, our main form of energy. Pulp prices are expected to remain close
to the bottom of the cycle for the time being.
The Converting Division will be further affected by the general slowdown across
all markets in the UK and the weaker US$. It will be difficult to maintain
profits at a similar level to last year.
We expect the current good trading conditions in TFP to continue in the
foreseeable future although the weaker US$ will affect margins on sales to the
USA.
The effect of currency movements in the last six months has been broadly neutral
to the Group as a result of our policy of matching currency receipts and
payments wherever possible.
Positive cash flow will continue for the rest of the financial year with
borrowings maintained at the current level. Capital expenditure will be more
than covered by depreciation.
J A Cropper
Chairman
-4-
James Cropper PLC
Interim Results
Group Profit and Loss Account for the 26 weeks ended 28 September 2002
Half-year to Half-year to Full Year to
September 2002 September 2001 March 2002
£'000 £'000 £'000
Turnover 27,486 27,578 54,451
Operating Profit 1,313 1,080 2,426
Other non-operating income 16 21 22
Amounts written off investments - - (293)
Net interest payable and similar charges (208) (338) (629)
Profit on ordinary activities before taxation 1,121 763 1,526
Taxation (348) (244) (760)
Profit on ordinary activities after taxation 773 519 766
Dividend (159) (150) (585)
Retained profit for the period 614 369 181
Earnings per share (Note 3) 9.2p 6.2p 9.2p
Dividend pence per share (Note 4) 1.9p 1.8p 7.0p
-5-
James Cropper PLC
Interim Results
Group Balance Sheet as at 28 September 2002
September 2002 September 2001 March 2002
£'000 £'000 £'000
Tangible assets 26,017 27,610 26,981
Investments 445 738 445
Fixed assets 26,462 28,348 27,426
Stocks 5,993 6,152 5,375
Debtors 12,199 11,449 11,709
Cash at bank and in hand 24 77 75
Current assets 18,216 17,678 17,159
Creditors (Amounts falling due within 1 year) (9,562) (10,867) (9,473)
Net current assets 8,654 6,811 7,686
Total assets less current liabilities 35,116 35,159 35,112
Creditors (Amounts falling due after more than 1 year) (3,932) (4,525) (4,542)
Deferred taxation (4,088) (3,964) (4,088)
27,096 26,670 26,482
Called up share capital 2,090 2,090 2,090
Share premium account 454 454 454
Revaluation reserve 226 292 226
Profit and loss account 24,326 23,834 23,712
Capital and Reserves 27,096 26,670 26,482
-6-
James Cropper PLC
Interim Results
Group Cash Flow Statement for the 26 weeks ended 28 September 2002
Half-year to Half-year to Full Year to
September 2002 September 2001 March 2002
£'000 £'000 £'000
Operating Profit 1,313 1,080 2,426
Depreciation charges 1,883 1,905 3,598
Profit on fixed asset disposals - - 1
(Increase)/decrease in stocks (618) 71 848
(Increase)/decrease in debtors (490) 1,016 774
Increase/(decrease) in creditors 493 (2,456) (1,986)
Cash flow from operating activities 2,581 1,616 5,661
Interest received 51 24 29
Interest paid (including interest (193) (276) (703)
element of finance leases )
Dividends received 16 21 22
Tax paid (37) (25) (40)
Purchase of tangible fixed assets (923) (1,591) (2,750)
Proceeds from disposal of tangible 4 3 98
fixed assets
Equity dividends paid (435) (377) (527)
Net cash inflow/(outflow) before financing 1,064 (605) 1,790
Financing
New debt due beyond 1 year - - 1,500
Repayment of bank loans (772) (652) (1,203)
Capital element of finance lease - - (625)
payments
Increase/(decrease) in cash in period 292 (1,257) 1,462
Reconciliation of net cash flow to movement in net debt
£'000 £'000 £'000
Increase/(decrease) in cash for the period 292 (1,257) 1,462
Decrease in debt and finance leases 772 652 328
Movement in net debt in the period 1,064 (605) 1,790
Net debt at start of period (7,164) (8,954) (8,954)
Net debt at end of period (6,100) (9,559) (7,164)
-7-
James Cropper PLC
Interim Results
Notes
1. The summarised results for the half-year ended 28 September 2002, which
have not been audited or reviewed, have been prepared in accordance with the
accounting policies adopted in the accounts for the year ended 30 March 2002.
2. The financial information set out above does not constitute statutory
accounts within the meaning of the Companies Act 1985. The figures for the
year to 30 March 2002 are an extract from the full accounts for that year
which have been filed with the Registrar of Companies and on which the
auditors gave an unqualified opinion.
3. Earnings per share for the six months ended 28 September 2002 has been
calculated on the profit available for distribution and on 8,359,114 (2001:
8,359,114) Ordinary Shares, being the weighted average number of shares in
issue during the period.
4. The interim dividend of 1.9p per Ordinary Share (2001: 1.8p per share) is
proposed and will be paid on 10 January 2003 to holders on the register at
the close of business on 20 December 2002. The dividend for the year to 30
March 2002 was made up of a paid interim dividend of £150,000 (1.8p per
share) and a proposed final dividend of £435,000 (5.2p per share).
5. The above information is being sent to all shareholders and is available from
the Company's registered office:
James Cropper PLC
Burneside Mills
Kendal
Cumbria
LA9 6PZ
or website: www.cropper.com
END
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