Final Results

Cropper(James) PLC
19 June 2000




James Cropper PLC 
'Specialist Paper Makers' 
Preliminary Results 
for the year ended 1st April 2000 
 
                                        2000          1999                     
 
 
* Profit before tax                    £3.1m          £2.5m          +22% 
Up 35% excluding prior year's exceptional property profits  
 
 
* Earnings per share                   24.8p          20.3p          +22% 
 
* Dividend
Final                    4.5p                  4.1p          +10% 
Total                    6.3p                  5.5p          +15% 
 
 
* Gearing reduced to               20%                 25% 
 
* Fuel cell development and supply agreement with Johnson Matthey 
'In the Papermaking Division turnover was marginally down on increased volume
with operating profit down by 7% on last year. During the year the price of
pulp increased by more than one third and £ Sterling appreciated by a further
12% against the Euro. In the circumstances it is pleasing to report only a
slightly lower operating profit, helped by further manufacturing
efficiencies'.  
 
'The Converting Division has continued to improve its performance as expected
through operational improvements producing higher margins'. 
 
'Technical Fibre Products has returned to profitability after the
disappointing loss last year with sales from innovative product development
accelerating in the last quarter. Our confidence that this business has an
exciting future ahead of it has been borne out by its return to profitability
and the recently announced agreement with Johnson Matthey on fuel cell
development'. 
 
'The Group continues to enjoy strong positive cashflow leading to a further
reduction in borrowings and gearing'. 
 
'Despite the difficult market conditions in papermaking generally, the Group
is financially in good shape and benefiting from the move taken a number of
years ago to develop the two new businesses of Converting Division and
Technical Fibre Products, which are both growing strongly.' 
James Cropper, Chairman 
 
Enquiries:
John Denman, Finance Director      Tel: [phone] Monday 19 June until
11.30 am
Tel: [phone] from Tuesday 20 June
 
FULL STATEMENT ATTACHED 
 
JAMES CROPPER PLC 
Preliminary Results 
for the year ended 1st April 2000 
 
 
STATEMENT BY THE CHAIRMAN, MR JAMES CROPPER 
 
The Past Financial Year 
 
I am delighted to report a 35% increase in our profit before taxation at
£3,060,000, at a time when the continuing strength of £ Sterling is
contributing to difficult trading conditions for UK manufacturing companies.
This compares with £2,266,000 last year before the exceptional profit of
£232,000 from the sale of most of the Company's remaining houses. We had a
strong opening half year with profit more than double that of last year, with
a similar profit to last year in the second half.
 
The Group turnover increased only marginally from £53,078,000 to £53,365,000
despite increased volume in all three businesses.
 
In the Papermaking Division turnover was marginally down on increased volume
with operating profit down by 7% on last year. During the year the price of
pulp increased by more than one third and £ Sterling appreciated by a further
12% against the Euro. In the circumstances it is pleasing to report only a
slightly lower operating profit, helped by further manufacturing efficiencies.
 
The Converting Division has continued to improve its performance as expected
through operational improvements producing higher margins.
 
Technical Fibre Products has returned to profitability after the
disappointing loss last year with sales from innovative product development
accelerating in the last quarter. Our confidence that this business has an
exciting future ahead of it has been borne out by its return to profitability
and the recently announced agreement with Johnson Matthey on fuel cell
development.
 
The Group continues to enjoy strong positive cashflow leading to a further
reduction in borrowings and gearing. The profit & loss account is also
benefiting with a reduction of interest payable of £351,000.
 
Dividends 
 
The Board decided last November, when it was reporting a much better opening
half year, to rebalance the interim and final dividend payments by increasing
the interim dividend from 1.4p to 1.8p. The Directors now propose that the
final dividend be increased by 0.4p to 4.5p to reflect the continuing strong
financial position of the Group. The total dividend is 6.3p, an increase of
15% which is well covered by earnings.
 
Papermaking Division 
 
This Division operated at a higher capacity than last year with UK sales
volumes up and export sales recovering from the financial turmoil in the Far
East. However the increasing strength of £ Sterling combined with the
resulting competitive pressure has both reduced the volume and value of sales
to Continental Europe and eroded margins in the UK. Margins have also been
under pressure from rising pulp costs. Much progress has been made in
improving operating efficiencies, in particular the minimising of waste,
which has helped to offset the unavoidable cost increases in pulp.
 
The result was a slight decline in the operating profit from £2,758,000 to
£2,574,000.
 
Converting Division 
 
The upward trend in operating profit has continued with an increase from
£678,000 to £871,000. Turnover and volume has been very similar to last year,
with efficiency improvements and changes in product mix delivering
improvements in margins.
 
Technical Fibre Products 
 
It is a pleasure to report an operating profit of £195,000 as against a loss
last year of £207,000. Turnover, particularly in the last quarter, increased
and margins have benefited from a change in product mix.
 
Much effort has gone into working in partnerships with customers and
suppliers to develop bespoke materials for applications offering significant
commercial potential. One successful result of this with exciting prospects
for the future was the signing in May 2000 of an agreement with Johnson
Matthey, the world leader in catalyst components and fuel cells, regarding
the development and supply of materials to be incorporated into fuel cell
products. This collaboration is an important step in the development of high
volume manufacturing of these components and is a very important event for
TFP and the Group. Fuel cells are very efficient and environmentally clean
generators of energy. Through an electro-chemical reaction hydrogen molecules
are split to create an electrical current and then combine with oxygen
resulting in water vapour being emitted as exhaust. The long term growth
potential in domestic and automotive applications is significant. I am very
confident that TFP will be partnering a leading player in this field.
 
Future 
 
The Papermaking Division with its considerable sales to Continental Europe is
being affected by the strength of £ Sterling. In the circumstances the
Division has coped remarkably well with a £ Sterling appreciation of over 30%
in the last three years against European currencies. Our flexibility and wide
range of products coupled with improvements in operational performance have
maintained operating profits. The goal for the Papermaking Division is to
maintain its margins in the face of a continuing increase in the cost of
pulp. There is now a genuine shortage of woodplup world-wide with the result
that the benchmark price of Northern softwood has risen on a year on year
basis by 40% from $480 to $670 per tonne, with more increases forecast for
the current year. It will be difficult to pass on these increases in paper
prices in the present low inflationary climate and there will be inevitable
pressure on our margins, which we will strive to offset by further
productivity improvements. The only good news on pulp is that we have long
standing trading arrangements with our suppliers and we are confident that we
will be able to obtain sufficient supplies to maintain production.
 
We expect the Converting Division's performance to continue to improve with
gains in productivity from continuing operational improvements.
 
Activity levels and performance of Technical Fibre Products are expected to
improve through the year, particularly in the second half with new
developments in composites and fire protection accelerating. After a pause in
its fortunes over the past three years we expect this subsidiary to grow
strongly over the next few years, underpinned by the recent agreement with
Johnson Matthey.
 
We are not expecting any significant change in our borrowings and gearing
over the coming year, with capital expenditure covered by depreciation.
 
Despite the difficult market conditions in papermaking generally, the Group
is financially in good shape and benefiting from the move taken a number of
years ago to develop the two new businesses of Converting Division and
Technical Fibre Products, which are both growing strongly.
 
JAMES CROPPER PLC 
Preliminary Results 
 

                                                           
                    Group Profit and Loss Account          
                    for the 52 weeks ended 1st April 2000  
                                                                   
                           _____________________    ___________________________ 
                                        2000            1999                    
    
                           _____________________    ___________________________ 

   
                                     £'000    £'000      £'000    £'000 
  Turnover                                    53,365              53,078
  Change in stocks of finished                                              
  goods and work in progress                     741               (556)
  Own work capitalised                           328                 133
  Other operating income                         154                 197
                                              54,588              52,852
  Raw materials and consumables     (26,613)            (25,739)         
  Other external charges             (7,652)             (7,013)         
  Staff costs                       (13,479)            (13,612)         
  Depreciation                       (3,204)             (3,259)           
                                              (50,948)            (49,623)
  Operating profit                              3,640               3,229
                                                                              
  Profit on sale of freehold houses                 3                 232
  Income from fixed asset investments              23                  17
  Interest receivable and similar                                             
  income                                           37                  14
  Interest payable and similar charges           (643)               (994)
  Profit on ordinary activities                                               
  before taxation                               3,060               2,498
  Tax on profit on ordinary activities           (988)               (800)
  Profit on ordinary activities after                                         
  taxation                                      2,072               1,698
  Dividends paid and proposed:                                                
  Interim 1.8p                                                                
  (1999 1.4p)                           (150)               (117)         
  Proposed final 4.5p                                                         
  (1998 4.1p)                           (377)               (343)         
                                                 (527)               (460)
  Amount set aside to reserves                  1,545               1,238
  Earnings per Ordinary Share of 25p                                          
  Basic                                         24.8p               20.3p
  Diluted                                       24.8p               20.3p

JAMES CROPPER PLC 
Preliminary Results 
 

                                                                              
                           Balance Sheets                                     
                           As at 1st April 2000                               
                                      Group                     Company       
                                        2000       1999       2000       1999 
                                       £'000      £'000      £'000      £'000 
  Fixed assets                                                                
  Tangible assets                      27,174     28,380     24,946     25,927
  Investments                             738        738        738        738
                                       27,912     29,118     25,684     26,665
  Current assets                                                              
  Stocks                                5,898      5,275      5,250      4,547
  Debtors                              12,187     11,579     11,653     11,235
  Cash at bank and in                      32        641      1,010      3,126
  hand                                                                        
                                       18,117     17,495     17,913     18,908
  Creditors (amounts                                                          
  falling due within one             (11,563)   (10,822)    (9,713)   (10,417)
  year)                                                                       
  Net current assets                    6,554      6,673      8,200      8,491
  Total assets less                    34,466     35,791     33,884     35,156
  current liabilities                                                         
  Creditors (amounts                                                          
  falling due after more              (3,188)    (6,161)    (3,188)    (6,161)
  than one year)                                                              
  Deferred Taxation                     (943)      (840)      (908)      (806)
                                       30,335     28,790     29,788     28,189
  Capital and reserves                                                        
  Called up equity share                2,090      2,090      2,090      2,090
  capital                                                                     
  Share premium account                   454        454        454        454
  Revaluation reserve                     329        471        329        471
  Profit and loss account              27,462     25,775     26,915     25,174
  Equity shareholders'                 30,335     28,790     29,788     28,189
  funds                                                                       
 
JAMES CROPPER PLC 
Preliminary Results 
 

                                                           
                    Group Cash Flow Statement              
                    For the 52 weeks ended 1st April 2000  
                                                                       
                                 _____________________     ___________________
                                           2000                 1999            
              
                                 _____________________     ___________________
                                                                               
                                        £'000      £'000     £'000      £'000 
  Cash flow from operating                          5,184                6,367
  activities                                                                  
  Return on investments and                                                   
  servicing of finance                                                        
  Interest received                         37                   14           
  Interest paid                          (340)                (627)           
  Interest element of finance                                                 
  lease rental payments                  (322)                (386)           
  Dividends received                       13       (612)       17       (982)
  Taxation                                          (924)                (609)
  Capital expenditure                                                         
  Purchase of tangible fixed assets    (2,146)              (4,631)           
  Asset disposal proceeds                 147      (1999)    3,047     (1,584)
  Equity dividends paid                            (493)                (418) 
  Net cash inflow/(outflow) before                                            
  financing                                         1,156                2,774
  Financing                                                                   
  New debt due beyond a year                 -                  750           
  Repayment of Bank Loans              (2,399)              (2,207)           
  Capital element of finance                                                  
  lease payments                        (790)    (3,189)     (710)    (2,167) 
  (Decrease)/Increase in cash in                 (2,033)                  607 
  the period                                                                  
 
 
James Cropper PLC 
Preliminary Results 
For the year ended 1st April 2000 
 
1.     Basic earnings per share have been calculated on the profit after
taxation of £2,072,000 (1999: £1,698,000) divided by the weighted average
number of Ordinary shares in issue during the period of 8,359,114 (1999:
8,359,114).
 
2.     The dividend will, if approved, be paid on 11th August 2000 to all
shareholders on the Register on 28th July 2000.
 
3.     The financial information set out above does not constitute the
statutory accounts for the years ended 1st April 2000 and 1999. Statutory
accounts for 1999 have been delivered to the Registrar of Companies and those
for 2000 will be delivered following the Company's Annual General Meeting.
The auditors have reported on these accounts, their reports were unqualified
and did not contain statements under section 237 (2) or (3) of the Companies
Act 1985.
 
4.     The annual report and accounts for 2000 will be posted to shareholders
on 7th July 2000 and will also be available on request from the Company's
registered office, Burneside Mills, Kendal, Cumbria LA9 6PZ.
 
5.     The Annual General Meeting of the Company will be held at 10.30am on
Wednesday, 2nd August 2000 at the Bryce Institute, Burneside, Kendal, Cumbria.