Preliminary Results

RNS Number : 9937N
Cropper(James) PLC
22 June 2010
 



                                                                                                                                                                                                       

James Cropper PLC

 

James Cropper plc (AIM:CRPR.L) the niche specialist paper and materials group, is pleased to announce its

Preliminary Audited Results for the year ended 27 March 2010

 

Full year to

Full year to



27 March

28 March



2010

2009

Change


£ms

£ms

%

Turnover

76.2

74.8

+2





Group profit before tax




Prior to net IFRS pension adjustment

3.3

1.1


After net IFRS pension adjustment

2.4

0.9






Earnings/(losses) per share -diluted

21.1p

(1.0p)






Dividend per share

7.5p

5.1p

+47





Gearing (net of cash) %




Prior to net IFRS pension deficit

0

17


After net IFRS pension deficit

0

22


 

·      James Cropper Speciality Papers ("Speciality Papers")

      Turnover increased by £3.1 million to £52.9 million, up 6%

      Operating Profit was £3.4 million against a Loss of £0.3 million in the previous year

·      Technical Fibre Products ("TFP")

Turnover fell by £1.7 million to £10.0 million, down 14%

Operating profit down £0.8 million to £1.3 million

·      Mark Cropper to succeed James Cropper as Chairman in July 2010.

 

James Cropper, Chairman, said:

 

"Speciality Papers traded strongly in the financial year continuing the recovery that began in the second half of the previous financial year".

 

"I am confident that our marketing led growth plans will progress during the coming year. However the upward movement in pulp prices will impact on the profitability of Speciality Papers in the short term. Price increases are currently being agreed with customers although there will be a time lag as regards implementation".

 

"The value of TFP's order book has increased significantly over the level of six months ago indicating that the impact of the recession on down stream customers is easing. As a consequence I anticipate that TFP's sales to the aerospace, defence, security and consumer electronics sectors will build strongly in the next 12 months".

 

"I am very encouraged by the way the Group has managed to weather the vagaries of the recession. Although the outlook for the global economy remains unclear, I am confident, given our plans, that my successor as Chairman has a strong foundation upon which to build".

 

Enquiries:

Brewin Dolphin

John Denman, Group Finance Director

Andrew Kitchingman

James Cropper PLC

Tel: 0845 270 8613

Tel: 01539 722002

Matthew Cheetham

www.cropper.com

Tel: 0845 213 4825


 

Summary of Results

2010

2009

2008

2007

2006

Profit and Loss Summary £'000






Group turnover £'000

76,230

74,803

72,744

69,085

64,201







Trading profit before interest

3,568

1,556

2,365

2,976

860

Depreciation

3,138

3,179

3,280

3,315

3,715

EBITDA (before IAS 19 pension adjustment)

6,706

4,735

5,645

6,291

4,575







Trading activities






Technical Fibre Products

1,327

2,099

1,426

2,053

777

Speciality Papers

3,437

(310)

1,281

1,435

(247)

Converting

446

406

548

460

62

The Paper Mill Shop

(446)

(388)

(358)

(358)

241

Other Group expenses

(321)

(19)

(147)

(86)

-


4,443

1,788

2,750

3,504

833

Director and employee bonuses

(875)

(232)

(324)

(433)

-

Trading operating profit

3,568

1,556

2,426

3,071

833

Profit on sale of trade investment

-

-

-

-

116

Joint venture

-

-

(61)

(95)

(89)

Trading profit before interest

3,568

1,556

2,365

2,976

860

Net interest

(271)

(448)

(402)

(438)

(511)

Trading profit before tax

3,297

1,108

1,963

2,538

349

(After future service pension contributions paid)






Net IAS 19 pension adjustments to






Operating profit

(255)

(476)

(610)

(610)

(364)

Net interest

(626)

226

227

179

(114)

Net IAS 19 pension adjustment before tax

(881)

(250)

(383)

(431)

(478)







Overall Group after pension adjustments






Operating profit

3,313

1,080

1,816

2,461

469

Profit on sale of trade investment

-

-

-

-

116

Joint venture

- 

-

(61)

(95)

(89)

Profit before interest

3,313

1,080

1,755

2,366

496

Net interest

(897)

(222)

(175)

(259)

(625)

Profit/(Loss) before Tax

2,416

858

1,580

2,107

(129)







Balance Sheet Summary £'000






Non-pension assets - excluding cash

43,852

43,753

45,616

45,758

46,668

Non-pension liabilities - excluding borrowings

(15,800)

(12,592)

(12,640)

(13,505)

(11,993)


28,052

31,161

32,976

32,253

34,675

Net IAS 19 pension deficit (after deferred tax)

(10,210)

(6,535)

(1,299)

(4,306)

(7,221)


17,842

24,626

31,677

27,947

27,454

Net borrowings

(31)

(4,452)

(6,016)

(5,294)

(8,595)

Equity shareholders' funds

17,811

20,174

25,661

22,653

18,859

Capital Expenditure £'000

1,228

1,333

2,337

2,756

2,889

 

All references to:

1.     "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"

2.     "Trading Profit before Tax" refers to profits prior to "Net IAS 19 pension adjustment".

3.     "Net IAS 19 pension adjustment" refers to the net impact on profit of the pension schemes' operating costs and finance costs.

4.     "Profit and Loss Account" refers to the Statement of Comprehensive Income.

5.     "Balance Sheet" refers to the Statement of Financial Position.

6.     "Reserves" refers to the Statement of changes in Equity.

 

CHAIRMAN'S REVIEW

 

I am delighted to report that the Group recorded a profit before tax of £2,416,000 for the year compared to £858,000 in the previous year. This was after the IAS 19 net pension charge of £881,000. Prior to the IAS 19 net pension charge the profit was £3,297,000 compared to £1,108,000 in 2008/09.

 

James Cropper Speciality Papers ("Speciality Papers")traded strongly in the financial year continuing the recovery that began in the second half of the previous financial year.

 

By contrast, as I indicated in my Interim statement of 17th November 2009, sales by Technical Fibre Products ("TFP") were down considerably on the previous year with the consequential impact on TFP's profitability.

 

Group turnover for the financial year was up 2% to £76,230,000.

Dividends

In view of the Group's strong performance in the year the Board has decided to increase the final dividend from 4.0 pence to 5.3 pence per share making a total dividend for the full year of 7.5 pence compared to 5.1 pence in 2008/09.

 

James Cropper Speciality Papers ("Speciality Papers")

Speciality Papers reported an operating profit of £3,437,000 against an operating loss of £310,000 in the previous year.

 

Turnover grew by £3,110,000 to £52,934,000, a 6% increase. Overall volume was up 4%, with UK and export volumes growing by 2% and 7% respectively. The average selling price increased by 2%.

 

The price of pulp has been extremely volatile in the past two years. Following the dramatic fall in the price of pulp in 2008/09, Northern Bleached Softwood Kraft ("NBSK") pulp opened the 2009/10 financial year at US$580/tonne. However, since then, the price has been on a rising trend, driven by supply constraints and continuing demand from China. Supply in the run up to the financial year end was badly affected by the impact of the Chilean earthquake. Chile's four pulp mills, which jointly produced 8% of global pulp supply, have been out of action since this natural disaster struck . By the end of the full year the price of NBSK was US$880/tonne, level with its previous peak in mid-2008, and an increase of US$300/tonne on the year, up 52%. Further increases took the price to US$950 by May 2010. Market forecasters believe that the price of pulp is approaching a plateau and that the price will start to fall in the second half of the current year. The strengthening of £Sterling against the US$ during the year dampened the impact of the increasing price of pulp to some extent.

 

Ready supply during the year resulted in relatively benign natural gas prices, with the overall cost of consumption in the year being £2.3 million compared to £4.3 million in the prior year.

 

Technical Fibre Products ("TFP")

TFP's operating profit for the year was £1,327,000 compared to £2,099,000 in 2008/09, with turnover falling overall by 14% on the previous year to £9,989,000 as a consequence of recessionary pressures on customers' inventories and markets. Sales were down in all sectors with the exception of fire protection which showed strong growth.

 

Sales into the North American market fell by 17% in US$ terms. At the average exchange rate for the year, sales to the North American market represented approximately 52% of TFP's turnover in £Sterling terms. Sales to "Rest of the World" were down by 20% in £Sterling terms.

 

James Cropper Converting ("Converting")

Converting's operating profit was £446,000 compared to £406,000 in the previous year. Turnover increased by 1% to £11,130,000, with volume down by 8% resulting from recessionary pressures. Sales into the North American market remained static in US$ terms and at the average exchange rate for the year represented approximately 24% of JCC's turnover in £Sterling terms. New sales of high value added grades contributed to the operating profit.

 

The Paper Mill Shop ("TPMS")

Turnover was £5,516,000, a decrease of £158,000 on the previous year, down 3%. Three under performing outlets closed in the latter part of the year reducing the number of trading outlets to twenty one by the year end. The consequential fall in turnover was partially offset by internet sales, which grew considerably during the year. The operating loss increased by £58,000 to £446,000 over the year. However with only modest investment in capital expenditure cash out flow was restricted to £35,000 as a consequence of a fall in working capital of £317,000 and a depreciation charge of £171,000.

 

Pensions and International Accounting Standard 19 ("IAS 19")

The Group operates two funded pension schemes providing defined benefits for the majority of its full time employees. Dramatic changes in financial markets over the year had a substantial impact on the IAS 19 valuation at the period end. Although asset values increased significantly during the period this was not great enough to offset the impact of the fall in bond rates which caused liabilities to increase by 36.3%. As a consequence of these changes the gross IAS19 deficit increased by £5,104,000 over the year to £14,180,000. The net charge against profit in the year was £881,000 compared with £250,000 for the year to 28th March 2009. These results once again demonstrate the volatility introduced to company results by this accounting standard.

 

Cash and borrowings

The combination of improved profit performance, tight control over working capital and modest capital over the year led to negligible net borrowings at the year end. At 27th March 2010 gross drawn down loans totalled £5.1 million, with £5.1 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 financial year end, after deduction of the IAS 19 pension deficit, was nil%.

 

Outlook

I am confident that our marketing led growth plans will progress during the coming year. However the upward movement in pulp prices will impact on the profitability of Speciality Papers in the short term. Price increases are currently being agreed with customers although there will be a time lag as regards implementation.

 

The value of TFP's order book has increased significantly over the level of six months ago indicating that the impact of the recession on down stream customers is easing. As a consequence I anticipate that TFP's sales to the aerospace, defence, security and consumer electronics sectors will build strongly in the next 12 months.

 

During the current financial year there will be further closures of under-performing TPMS outlets. At the same time the in-store offering will also change placing more emphasis on sales of paper, thus increasing the overall margin at store level. We expect that these two factors, supplemented by further growth of internet sales, will reduce the loss of TPMS in the coming year.

 

Borrowing will increase from its current low level as a consequence of increased capital expenditure. Investment will continue to be focused on enhancing our capabilities and on energy and operating efficiencies in our manufacturing subsidiaries. 

 

I am very encouraged by the way the Group has managed to weather the vagaries of the recession. Although the outlook for the global economy remains unclear, I am confident, given our plans, that my successor as Chairman has a strong foundation upon which to build.

 

 

 

James Cropper

 

Chairman

Audited Statement of Comprehensive Income for the period ended 27 March 2010 (2009:period ended 28 March 2009)

 

 

 

 

 

 



2010


2009




£,000


£,000

Continuing operations






Revenue



76,230


  74,803

Other income



        208


        277

Changes in inventories of finished goods and work in progress



        160


        272

Raw materials and consumables used



(32,338)


(33,895)

Energy costs



(3,111)


(5,199)

Employee benefit costs



(19,909)


(18,211)

Depreciation and amortisation



(3,138)


(3,179)

Other expenses



(14,789)


(13,788)







Operating profit



    3,313


    1,080







Interest expense



(910)


(493)

Interest income



        13


        271

Profit before tax



        2,416


        858

Tax expense



(608)


(945)

Profit/(loss) for the period



1,808


(87)













Other comprehensive income






Foreign currency translation



(267)


546

Retirement benefit liabilities - actuarial losses



(4,849)


(7,734)

Deferred tax on actuarial losses on retirement benefit liabilities



1,358


2,166

Total comprehensive income for the period attributable to equity

 holders of the Company



(1,950)


(5,109)







Earnings/(losses) per share, based on profit/loss for the year after tax and expressed in pence per share






-Basic



21.3p


(1.0p)

-Diluted



21.1p


(1.0p)













Dividends per share expressed in pence per share






-2010 interim dividend paid



2.2p


1.1p

-2010 final dividend proposed



5.3p


4.0p

 

 

 

 

 

 

Audited Statement of Financial Position as at 27 March 2010

(2009: as at 28 March 2009)



Group



Company



2010

2009


2010

2009



£'000

£'000


£'000

£'000







 Restated

Assets














Intangible assets


2,096

    2,012


1,879

    1,713

Property, plant and equipment


16,863

  18,483


    2,258

    2,228

Investments in subsidiary undertakings


            -

            -


    7,350

    7,350

Deferred tax assets


189

-


3,462

    2,541

 Total non-current assets


19,148

20,495


14,949

13,832








Current assets







Inventories


10,195

  10,422


 -

 -

Trade and other receivables


  14,509

  12,836


33,739

  31,132

Cash and cash equivalents


5,050

    2,636


3,420

    2,054

Current tax assets


 -

 -


42

           7

 Total current assets


29,754

  25,894


37,201

  33,193








Total assets


48,902

46,389


52,150

47,025








Liabilities







Trade and other payables


11,081

7,662


18,338

12,815

Loans and borrowings


3,195

2,134


1,525

2,134

Current tax liabilities


749

801


            -

            -

 Total current liabilities


15,025

10,597


19,863

14,949








Long-term borrowings


1,886

4,954


1,886

3,189

Retirement benefit liabilities


14,180

9,076


14,180

9,076

Deferred tax liabilities


-

1,588


-

548

Total non-current liabilities


16,066

15,618


16,066

12,813

Total liabilities


31,091

26,215


35,929

27,762








Equity







Ordinary share capital


    2,118

    2,118


    2,118

    2,118

Share premium


       573

       573


       573

       573

Translation reserve


265

       532


            -

            -

Retained earnings


14,855

  16,951


13,530

  16,572

Total shareholders' equity


17,811

20,174


16,221

19,263

Total equity and liabilities


48,902

46,389


52,150

47,025

 

The 2009 Company figures have been restated such that inter company funding balances, that were previously included within borrowings, are included within receivables / payables. There is no impact to net assets, nor is there any impact to figures previously disclosed for periods prior to 2009.

Audited Statement of Cash Flows for the period ended 27 March 2010

(2009:period ended 28 March 2009)

 

 

Audited Statement of Changes in Equity for the period ended 27 March 2010

 





Group



Company





2010

2009


2010

2009





£'000

£'000


£'000

£'000

Opening shareholders' funds


      20,174

25,661


      19,263

22,803

Profit/(loss) for the period


1,808

(87)


872

2,406

Exchange differences



(267)

546


               -  

               -  

Actuarial losses on retirement

(3,491)

(5,568)


(3,491)

(5,568)

Share-based payments


102

147


102

147

Dividends paid



(515)

(525)


(525)

(525)

Closing shareholders' funds


17,811

20,174


16,221

19,263

 

The movement in shareholders funds solely relates to retained earnings, other than the £267,000 of exchange differences taken directly to the translation reserve.

 

Preliminary Results for the year ended 27 March 2010

 

 

1.             Basic profits per share have been calculated on the profit after taxation of £1,808,000 (2009: loss £87,000) divided by the weighted average number of Ordinary shares in issue during the period of 8,472,368 (2009: 8,472,368).

 

2.             The dividend will, if approved, be paid on 13 August 2010 to all shareholders on the Register on 23 July 2010.

 

3.             The financial information set out above does not constitute the statutory accounts for the years ended 27 March 2010.  Statutory accounts for 2009 have been delivered to the Registrar of Companies and those for 2010 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 498 (2) or (3) of the Companies Act 2006.

 

4.             The Annual Report and Accounts for 2010 will be posted to shareholders on 7 July 2010. They will also be available on the Company's website (www.cropper.com) and 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 11.00am on Wednesday 28 July 2010 at the Bryce Institute, Burneside, Kendal, Cumbria.

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
FR KMGZVNMMGGZM

Companies

Cropper (James) (CRPR)
UK 100
FTSE quotes by TradingView

Latest directors dealings

All directors dealings today