Interim Results

Cropper(James) PLC 18 November 2003 Issued by Citigate Dewe Rogerson Ltd, Birmingham Date: Tuesday, 18 November 2003 Embargoed: 7.30am James Cropper PLC 'Specialist Paper Makers' Interim Results for the 26 weeks ended 27 September 2003 Half-year to Half-year to Full year to 27 September 2003 28 September 2002 29 March 2003 Group profit before £0.1m £1.1m £1.9m tax Earnings per share 0.8p 9.2p 15.1p Dividend per share 1.9p 1.9p 7.5p Gearing 29% 23% 24% Paper Division recorded a small operating loss Continuing growth in Technical Fibre Products fire protection and composite materials Interim dividend maintained despite the challenging trading environment 'The Paper Division's difficulties arise from the subdued economic activity in export markets, margin pressures and from the higher cost of pulp'. 'Despite the current situation, the Board believes that considerable expansion opportunities exist for the Paper Division in the UK and certain of its export markets'. 'Display board volumes have started to recover as Converting Division recaptures market share'. 'Two new 'Paper Mill Shop' retail outlets were opened in the period taking the total number of shops to nine. The results from this venture are encouraging, particularly from those outlets that have become well established'. 'TFP and Converting are expected to benefit from the recovery in the US economy'. 'The Divisional management teams are focused on profit improvement through business development, cost control and greater efficiency in the medium term'. 'In the absence of unforeseen circumstances it is the Board's intention to maintain the level of the full year dividend reflecting both the confidence we have in the future prospects of the Group and the strength of the balance sheet'. 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 27 September 2003 STATEMENT BY THE CHAIRMAN, J A CROPPER I am disappointed to report that the Group recorded a Profit before Tax of £95,000 for the first half of the current financial year compared to £1,121,000 in the previous year. The decline in profitability was primarily due to the difficult trading conditions that confronted the Paper Division, which as a consequence has incurred a small operating loss in the period. These difficulties were highlighted in the AGM Statement issued in the summer and re-iterated in the Trading Statement on 30 October 2003. Group turnover was broadly in line with last year at £27.5 million. Across the Group all Divisions have been affected by certain recent cost increases, such as those associated with National Insurance contributions, insurance premiums, effluent treatment and regulatory compliance that are largely outside the Group's control. Reduced cash flow from trading and capital expenditure in the first six-months gave rise to an increase in gearing from 24% to 29%. Despite the challenging trading environment the Directors have decided to maintain the interim dividend at 1.9p per share. Paper Division The Paper Division's difficulties arise from the subdued economic activity in export markets, margin pressures and from the higher cost of pulp. The cost of Northern Softwood Bleached Kraft pulp, the market benchmark, fell from its first quarter peak of US$560 per tonne to US$520 per tonne and then contrary to expectations it started to climb back towards the previous level in the latter part of the second quarter, where it is now expected to remain for the rest of the financial year. The weakened US$ mitigated the impact as regards US$ priced pulp. However this was more than offset by the increase in cost of raw materials denominated in Euros as this currency strengthened. Two new 'Paper Mill Shop' retail outlets were opened in the period taking the total number of shops to nine. The results from this venture are encouraging, particularly from those outlets that have become well established. Overall the retail business is trading profitably. Further 'Paper Mill Shops' will be opened in the next six months. Technical Fibre Products ('TFP') TFP's growth continues across its principal markets, this being particularly so in fire protection and composite materials. Despite the dampening impact of the weak US$ on the margins on sales to the USA, TFP is trading at a similar level to last year. There has been an increase in development costs chargeable against profit arising from the commissioning of equipment to manufacture new specialist materials. These materials will come to market in later years. The Division also continues to make steady and focused progress in meeting the requirements of Johnson Matthey's fuel cell component programmes. Converting Division The slowdown in demand for marketing, advertising and promotional materials in the UK and European markets is continuing to depress margins of display board sales. Display board volumes have started to recover as Converting Division recaptures market share. The weakness of the US$ continues to erode margins on sales of picture mounting board into export markets. Progress is being made in implementing cost reduction measures. continued... -3- Outlook The Divisional management teams are focused on profit improvement through business development, cost control and greater efficiency in the medium term. Despite the current situation, the Board believes that considerable expansion opportunities exist for the Paper Division in the UK and certain of its export markets. These are presently being vigorously pursued but are unlikely to have a major impact in the current financial year. The immediate priority for the Converting Division is to stabilise its recovery and build upon that base. TFP and Converting are expected to benefit from the recovery in the US economy. In the absence of unforeseen circumstances it is the Board's intention to maintain the level of the full year dividend reflecting both the confidence we have in the future prospects of the Group and the strength of the balance sheet. James Cropper Chairman -4- James Cropper PLC Interim Results Group Profit and Loss Account for the 26 weeks ended 27 September 2003 Half-year to Half-year to Full Year to 27 September 28 September 29 March 2003 2002 2003 £'000 £'000 £'000 Turnover 27,553 27,486 55,010 ----------- ------------ ---------- Operating Profit - continuing 300 1,313 2,282 operations Share of operating loss in Joint (38) - (23) Venture ----------- ------------ ---------- Total operating profit 262 1,313 2,259 Other non-operating income - 16 16 Net interest payable and similar (167) (208) (408) charges ----------- ------------ ---------- Profit on ordinary activities before 95 1,121 1,867 taxation Taxation (348) (603) (29) ----------- ------------ ---------- Profit on ordinary activities after 66 773 1,264 taxation Dividend (159) (159) (627) ----------- ------------ ---------- (Loss)/retained profit for the (93) 614 637 period ----------- ------------ ---------- 0.8p 9.2p 15.1p Earnings per share - basic and diluted (Note 3) ----------- ------------ ---------- Dividend pence per share (Note 4) 1.9p 1.9p 7.5p ----------- ------------ ---------- -5- James Cropper PLC Interim Results Group Balance Sheet as at 27 September 2003 Full year Half-year to Half-year to to 27 September 28 September 29 March 2003 2002 2003 £'000 £'000 £'000 Tangible assets 25,989 26,017 25,826 Investments 445 445 445 Investments in Joint Venture:- Share of gross assets 134 - 167 Share of gross liabilities (5) - - ------------ ------------ ---------- Fixed assets 26,563 26,462 26,438 ------------ ------------ ---------- Stocks 6,389 5,993 5,798 Debtors 11,910 12,199 11,785 Cash at bank and in hand 659 24 6 ------------ ------------ ---------- Current assets 18,958 18,216 17,589 Creditors (Amounts falling due (8,603) (9,562) (8,099) within 1 year) ------------ ------------ ---------- Net current assets 10,355 8,654 9,490 ------------ ------------ ---------- Total assets less current 36,918 35,116 35,928 liabilities (5,737) (3,932) (4,654) Creditors (Amounts falling due after more than 1 year) Deferred taxation (4,155) (4,088) (4,155) ------------ ------------ ---------- 27,026 27,096 27,119 ------------ ------------ ---------- Called up share capital 2,090 2,090 2,090 Share premium account 454 454 454 Revaluation reserve 177 226 177 Profit and loss account 24,305 24,326 24,398 ------------ ------------ ---------- Capital and Reserves 27,026 27,096 27,119 ------------ ------------ ---------- -6- James Cropper PLC Interim Results Group Cash Flow Statement for the 26 weeks ended 27 September 2003 Half-year to Half-year to Full Year to 27 September 28 September 29 March 2003 2002 2003 £'000 £'000 £'000 Operating Profit 300 1,313 2,282 Depreciation charges 1,685 1,883 3,449 Profit on fixed asset disposals - - (1) (Increase)/decrease in stocks (591) (618) (423) (Increase)/decrease in debtors (125) (490) (84) (Decrease)/increase in creditors (78) 493 (320) ------------ ------------ ---------- Cash flow from operating 1,191 2,581 4,903 activities Interest received 22 51 100 Interest paid (including interest (163) (193) (539) element of finance leases) Dividends received - 16 16 Tax paid (103) (37) (765) Purchase of tangible fixed assets (1,850) (923) (2,299) Proceeds from disposal of tangible 2 4 6 fixed assets Investment in Joint Venture - - (190) Equity dividends paid (468) (435) (594) ------------ ------------ ---------- Net cash (outflow)/inflow before (1,369) 1,064 638 financing Financing New debt due beyond 1 year 2,000 - 1,500 Repayment of bank loans (649) (772) (1,580) Capital element of finance lease - - (698) payments ------------ ------------ ---------- (Decrease)/increase in cash in (18) 292 (140) period ------------ ------------ ---------- Reconciliation of net cash flow to movement in net debt £'000 £'000 £'000 (Decrease)/increase in cash for the (18) 292 (140) period (Increase)/decrease in debt and finance (1,351) 772 778 leases ------------ ------------ ---------- Movement in net debt in the period (1,369) 1,064 638 Net debt at start of period (6,526) (7,164) (7,164) ------------ ------------ ---------- Net debt at end of period (7,895) (6,100) (6,526) ------------ ------------ ---------- -7- James Cropper PLC Interim Results Notes 1. The summarised results for the half-year ended 27 September 2003, which have not been audited or reviewed, have been prepared in accordance with the accounting policies adopted in the accounts for the year ended 29 March 2003. 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 29 March 2003 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 27 September 2003 has been calculated on the profit available for distribution and on 8,359,114 (2002: 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 (2002: 1.9p per share) is proposed and will be paid on 9 January 2004 to holders on the register at the close of business on 19 December 2003. The dividend for the year to 29 March 2003 was made up of a paid interim dividend of £159,000 (1.9p per share) and a proposed final dividend of £468,000 (5.6p 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 This information is provided by RNS The company news service from the London Stock Exchange

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