Cropper (J) Regulatory News (CRPR)

21 Jun 2005 07:30

Cropper(James) PLC21 June 2005 Issued by Citigate Dewe Rogerson Limited, BirminghamDate: Tuesday 21 June 2005Embargoed: 7.30am James Cropper PLC Preliminary Results for the year ended 2nd April 2005 2005 2004Turnover £64.6m £58.0m +11% Group profit before tax £1.8m £0.8m +126% Earnings per share 13.8p 7.6p +82% Dividend Final 6.3p 5.9p +6.8% Total 8.2p 7.8p +5.1% Gearing 27% 27% All Divisions traded profitably Energy costs up £0.6m, 28% Operating profit in Technical Fibre Products ("TFP") down 4% to £0.5m Total US sales up 33% Metal-coated carbon fibre materials accounted for 39% of US sales Margins on US sales dampened by weaker US$ Continued progress on fuel cell component development Operating profit in Paper up 301% to £1.7m Sales by Speciality Papers up 11% Seven new Paper Mill Shop outlets opened during the year Operating profit in Converting down 23% to £0.3m Margins on US sales dampened by weaker US$ UK display board market very competitive Trade investment written down by £0.2m "I am pleased to report that the recovery of the Group continued in the secondhalf of the financial year with all Divisions trading profitably. This hasresulted in a profit before tax of £1,771,000 for the full year compared to£785,000 in the previous year. The improvement was sales led with Group turnoverincreasing 11% to £64.6 million against £58.0 million last year". "In view of the Group's improved performance in the past financial year, theBoard is proposing a final dividend payment of 6.3p, making a total dividend forthe full year of 8.2p compared to 7.8p in 2004, an overall increase of 5.1%". "Energy costs are expected to rise further during the course of 2005. Pulp costsare currently on a rising trend, particularly those relating to hardwoods. Thesefactors are likely to depress profitability of James Cropper Speciality Papersin the current financial year to below the levels achieved in the past year". "The Paper Mill Shop will continue to expand the number of outlets during thecourse of the next twelve months building upon its success to date". "Given the Group's sound financial position and its portfolio of related nichebusinesses, I am confident that despite the short-term challenges we can developand exploit future opportunities in our areas of expertise at home and abroad". James Cropper, Chairman Enquiries:Alun Lewis, Chief ExecutiveJohn Denman, Group Finance Director Katie DaleJames Cropper PLC Citigate Dewe Rogerson01539 722002 Today: 0207 282 8000 Mobile: 07770 788624 Thereafter: 0121 455 8370 JAMES CROPPER PLC Preliminary Results for the year ended 2nd April 2005 STATEMENT BY THE CHAIRMAN, MR JAMES CROPPERI am pleased to report that the recovery of the Group continued in the secondhalf of the financial year with all Divisions trading profitably. This hasresulted in a profit before tax of £1,771,000 for the full year compared to£785,000 in the previous year. The improvement was sales led with Group turnoverincreasing 11% to £64.6 million against £58.0 million last year. The improvement in profitability was achieved against the background ofsignificant increases in the cost of crude oil, natural gas and wholesaleelectricity. In my Interim Statement of November 2004 I indicated that theunprecedented rise in the cost of natural gas would inevitably dampen theGroup's profitability in the second half, particularly that of James CropperSpeciality Papers. This statement was based upon forward market projections atthe time, suggesting that the cost in the second half of the financial yearwould be substantially higher than that in the first half. Although the cost ofnatural gas continued to rise during the second half, that projection proved tobe overly cautious. However, it should be noted that the cost of energyconsumption increased over the previous year by £587,000 to £2,696,000, up 28%.The cost of natural gas is projected to rise further during the course of 2005. The charge against profit in the year relating to the combined past servicepension deficits of the Group's two final salary schemes was £672,000. Thisreflects the full year charge based upon the accounting standard SSAP 24. Thecharge in the previous period was £336,000. Although US$ sales grew in all Divisions over the year, profitability from bothTechnical Fibre Products ("TFP") and James Cropper Converting continue to beadversely affected by the weak US$. Since 1989 the Group has held a 35% holding in Pacofa, a converting companylocated in northern France. Over recent years the performance of this businesshas been disappointing and, therefore, the Directors have decided to take theprudent step of writing down the cost of the investment by £200,000 to reflectmore closely its current recoverable value. DividendIn view of the Group's improved performance in the past financial year, theBoard is proposing a final dividend payment of 6.3p, making a total dividend forthe full year of 8.2p compared to 7.8p in 2004, an overall increase of 5.1%. Paper DivisionThe Division's operating profit increased from £415,000 to £1,663,000 over theyear. Sales by James Cropper Speciality Papers increased by 11% during the financialyear. Activity in the packaging, business and industrial paper sectors was up,reflecting growth in the UK, the USA and China. The price of pulp fluctuated during the course of the year. Northern SoftwoodBleached Kraft ("NSBK") pulp, the market benchmark, opened the year at US$640per tonne and rose to US$680 by the end of the first quarter. Then over thesecond quarter it fell to US$590, before resuming an upward trend in the secondhalf year to end at US$645. A similar pattern emerged for • priced hardwoods.The weakness of the US$ mitigated the impact of these increases. The • wasrelatively stable against £Sterling throughout the year. The Paper Mill Shop business continued to grow during the year with seven newoutlets opening across the UK taking the total number of stores to eighteen. Inorder to manage the expansion of this business, warehousing and distributionactivities were relocated to a larger facility. Converting DivisionConverting Division's turnover grew by 1%, with volume up 15%. However,operating profit declined from £394,000 to £302,000. The Division continued tomaintain its position as the leading UK manufacturer of display board. Thedemand for mount board continues to be positive but the weakness of the US$eroded margins on sales into the USA. The development of digital imagingproducts progressed during the year leading to the launch of a full range ofpapers and boards in the second half. This new range is marketed to the trade inparallel to the general public, the latter through a dedicated website,www.papermilldirect.com. The development and launch costs relating to thedigital imaging range affected overall profitability of the Division. Technical Fibre ProductsOperating profit for the year was £457,000 against £474,000 with turnover up 3%on the previous year. At the current exchange rate, sales to the US marketrepresented approximately 40% of TFP's turnover in £Sterling terms. The declinein the value of the US$ over the two years disguises progress in the US marketwhere US$ sales were 33% higher in the past financial year compared with theprevious period. The growth in the US market was largely attributable to composite materialscontaining metal-coated carbon fibres. As reported last year, nicheopportunities for highly conductive metal-coated carbon fibre materials havegrown steadily in recent years. Applications include the use of these materialsin electronic, medical and flexible heating devices. The majority of thesefibres are now supplied by Electro Fiber Technologies LLC ("EFT"), the jointventure company in which TFP has a 50% share. The primary objective of EFT is toprovide TFP with control of quality and security of supply in order to servicethese technically demanding applications. EFT incurred a loss in line with thatof the previous year. Early in the year the Department of Trade and Industry awarded funds to assistResearch & Development by TFP, Johnson Matthey and other UK companies to ensurethat the UK becomes a world centre for fuel cell technology. This was followedby the Board's decision to construct a dedicated Research & Development facilityto support new product and market development. I am pleased to report that thisfacility, which incorporates a state of the art pilot line, has now beencommissioned. OutlookIn recent years the Group has had to absorb increases in overheads that werelargely outside its control. These have included increases in energy, pensioncontributions, National Insurance contributions, insurance premiums, effluenttreatment charges and the cost of regulatory compliance. The growth in Groupturnover is therefore very encouraging and reflects our efforts to develop newproducts, markets and new routes to markets. TFP's sales in the US marketcontinue to grow and early indications suggest that our plans to grow sales inJames Cropper Speciality Papers are being achieved. Growth in the USA and othernon-European export markets is an important element of our overall strategy. Tomitigate the impact of the weak US$ on our improving US$ revenues we continue tooptimise our internal currency hedging strategy in order to lower exposure. Increasing energy costs, driven by major distortions in the European natural gasmarket and international events, are affecting all manufacturing basedindustries. Energy costs are expected to rise further during the course of 2005.Pulp costs are currently on a rising trend, particularly those relating tohardwoods. These factors are likely to depress profitability of James CropperSpeciality Papers in the current financial year to below the levels achieved inthe past year. The Paper Mill Shop will continue to expand the number of outlets during thecourse of the next twelve months building upon its success to date. Given the Group's sound financial position and its portfolio of related nichebusinesses, I am confident that despite the short-term challenges we can developand exploit future opportunities in our areas of expertise at home and abroad. James Cropper PLC Preliminary Results Group Profit and Loss Account for the 53 weeks ended 2nd April 2005 53 weeks ended 52 weeks ended 2nd April 2005 27th March 2004 (as restated - see Note 1) 2005 2004 £'000 £'000 £'000 £'000 £'000 £'000 --------------------------------------------------------------Turnover (including shareof Joint Venture) 64,616 58,015 Less share of Joint Venture (48) (5) ---------------------------------------------------------------Turnover - continuingoperations 64,568 58,010 Change in stocks offinished goods and work inprogress 1 699 Own work capitalised 422 357 Other operating income 235 152 -------------------------------------------------------------- 65,226 59,218 --------------------------------------------------------------Raw materials andconsumables (27,500) (25,547) Energy (2,696) (30,196) (2,109) (27,656) ------- ------Other external charges (12,351) (11,495) Staff costs (17,001) (15,717)Depreciation (3,256) (3,067) ------------------------------------------------------------- (62,804) (57,935) -------------------------------------------------------------Group operating profit -continuing operations 2,422 1,283 Share of operating loss inJoint Venture (114) (93) -------------------------------------------------------------- Total operating profit Group and share of JointVenture 2,308 1,190 Other interest receivableand similar income 136 59 Amounts written offinvestments (200) (50) Interest payable andsimilar charges (473) (414) -------------------------------------------------------------- Profit on ordinaryactivities before taxation 1,771 785 Tax on profit on ordinaryactivities (616) (154) -------------------------------------------------------------- Profit on ordinaryactivities after taxation 1,155 631 Dividends paid andproposed: Interim paid 1.9p (2004 1.9p) (159) (159) Proposed final 6.3p (2004 5.9p) (527) (493) ------------------------------------------------------------- (686) (652) -------------------------------------------------------------Amount set aside to/(from)reserves 469 (21) ------------------------------------------------------------- Earnings per Ordinary Shareof 25p Basic 13.8p 7.6pDiluted 13.8p 7.6p James Cropper PLC Preliminary Results Balance Sheets as at 2nd April 2005 Group Company 2005 2004 2005 2004 £'000 £'000 £'000 £'000Fixed assetsTangible assets 25,808 25,836 2,546 2,519 Trade investments 195 395 195 395 Investment in SubsidiaryCompanies - - 7,350 7,350 Investments in JointVenture Share of gross assets 109 129 - - Share of gross liabilities (26) (11) - - -------------------------------------------------- 26,086 26,349 10,091 10,264 -------------------------------------------------- Current assetsStocks 7,663 7,166 - - Debtors 13,237 12,507 26,841 31,319 Cash at bank and in hand 938 1,240 857 74 -------------------------------------------------- 21,838 20,913 27,698 31,393 --------------------------------------------------Creditors (amounts fallingdue within one year) (9,368) (9,409) (5,527) (9,416) --------------------------------------------------Net current assets 12,470 11,504 22,171 21,977 -------------------------------------------------- Total assets less currentliabilities 38,556 37,853 32,262 32,241 Creditors (amounts fallingdue after more than one year) (6,548) (6,589) (6,548) (6,589) Deferred taxation (4,470) (4,189) (736) (445) -------------------------------------------------- 27,538 27,075 24,978 25,207 --------------------------------------------------Capital and reservesCalled up equity sharecapital 2,090 2,090 2,090 2,090 Share premium account 454 454 454 454 Revaluation reserve 100 138 23 32 Profit and loss account 24,894 24,393 22,411 22,631 --------------------------------------------------Equity shareholders' funds 27,538 27,075 24,978 25,207 -------------------------------------------------- James Cropper PLC Preliminary Results Statement of Group Total Recognised Gains and Lossesfor the 53 weeks ended 2nd April 2005 53 weeks ended 52 weeks ended 2nd April 2005 27th March 2004 --------------------------------- ---------------------------------Profit for the year 1,155 631Currency translation differences on foreigncurrency investment (6) (23) ---------------------------------Total recognised gains and losses relatingto the year 1,149 608 --------------------------------- Note of Group Historical Cost Profits and Lossesfor the 53 weeks ended 2nd April 2005 53 weeks ended 52 weeks ended 2nd April 2005 27th March 2004 ---------------------------------Reported profit on ordinary activitiesbefore taxation 1,771 785 Difference between historical costdepreciation charge and the actualdepreciation charge for the year calculatedon the revalued amounts 38 39 -------------------------------- Historical cost profit on ordinaryactivities before taxation 1,809 824 ---=----------------------------Historical cost profit for the year aftertaxation and dividends 507 18 -------------------------------- Reconciliation of Movements in Group Shareholders' Fundsfor the 53 weeks ended 2nd April 2005 Group Company 53 weeks 52 weeks 53 weeks 52 weeks ended ended ended ended 2nd April 27th March 2nd April 27th March 2005 2004 2005 2004 £'000 £'000 £'000 £'000 -------------------------------------------Openingshareholders'funds 27,075 27,119 25,207 26,095 Profit/(loss)for the year 1,155 631 457 (236) Dividends (686) (652) (686) (652) Otherrecognisedgains andlossesrelating tothe year (6) (23) - - ---------------------------------------------Closingshareholders'funds 27,538 27,075 24,978 25,207 --------------------------------------------- James Cropper PLC Preliminary Results Group Cash Flow Statement for the 53 weeks ended 2nd April 2005 2005 2004 £'000 £'000 £'000 £'000 ------------------------------------------------Cash flow from operating 3,963 3,557activities Returns on investments andservicing of finance Interest received 125 46 Interest paid (490) (394) ------- ------- (365) (348) Taxation received/(paid) 385 (316) Capital expenditurePurchase of tangible fixed (3,228) (3,101)assets Asset disposal proceeds 5 (3,223) 2 (3,099) ------- ------- AcquisitionsInvestment in Joint Venture (85) (68) Equity dividends paid (652) (627) ------ -------Net cash inflow/(outflow)before 23 (901)financing FinancingNew debt due beyond a year 1,600 4,000Repayment of bank loans (1,949) (1,461) ------- ------- (349) 2,539 ------ -------(Decrease)/increase in cashin the (326) 1,638year ------ ------- James Cropper PLC Preliminary Results For the year ended 2nd April 2005 1. The 2004 turnover figures of the Paper and Converting Divisionshave been restated to reflect the inclusion of delivery costs invoiced tocustomers. These delivery costs had previously been netted off against the costof transport in the other external charges section of the Profit and LossAccount. The restatement for 2004 increases turnover and other external chargesby £1,445,000 and represents a consistent accounting treatment across the Group. 2. Basic earning per share have been calculated on the profit aftertaxation of £1,155,000 (2004 £631,000) divided by the weighted average number ofOrdinary shares in issue during the period of 8,359,114 (2004 8,359,114). 3. The dividend will, if approved, be paid on 12th August 2005 toall shareholders on the Register on 22nd July 2005. 4. The financial information set out above does not constitute thestatutory accounts for the years ended 2nd April 2005 and 27th March 2004.Statutory accounts for 2004 have been delivered to the Registrar of Companiesand those for 2005 will be delivered following the Company's Annual GeneralMeeting. The auditors have reported on these accounts, their reports wereunqualified and did not contain statements under section 237 (2) or (3) of theCompanies Act 1985. 5. The Annual Report and Accounts for 2005 will be posted toshareholders on 11th July 2005 and will also be available on request from theCompany's registered office, Burneside Mills, Kendal, Cumbria LA9 6PZ. 6. The Annual General Meeting of the Company will be held at10.30am on Wednesday, 3rd August 2005 at the Bryce Institute, Burneside, Kendal,Cumbria This information is provided by RNS The company news service from the London Stock Exchange