Cropper (J) Regulatory News (CRPR)

19 Jun 2007 07:30

Cropper(James) PLC19 June 2007 Issued by Citigate Dewe Rogerson Ltd, BirminghamDate: Tuesday, 19 June 2007Embargoed: 7.30am James Cropper PLC Preliminary Audited Results for the year ended 31 March 2007 Full year to Full year to 31 March 2007 1 April 2006 Turnover £69.1m £64.2m +8% Group profit/(loss) before taxPrior to net IFRS pension adjustments £2.5m £0.3mAfter net IFRS pension adjustments £2.1m (£0.1m) Earnings/(Loss) per share 16.2p (1.2p) Dividend per share 7.0p 4.1p +71% Gearing 23% 46% Technical Fibre Products ("TFP") Operating profit increased to £2.1m compared to £0.8m last year Total sales up 34%; sales to North America up 48% James Cropper Speciality Papers ("Speciality Papers") Operating profit increased to £1.4m compared to a loss of £0.2m last year Energy costs down £1.4m; pulp costs up £0.8m Transfer from the Full List to AIM proposed "The Group's recovery was spearheaded by a very significant increase in sales byTechnical Fibre Products, reduced energy costs and through increased turnoverand improved efficiencies within James Cropper Speciality Papers". "Our strong recovery and return to profitability is reflected in the proposedincrease in dividend to shareholders". "TFP's exceptional growth in the past financial year being reported has rewardedour patient, long-term resolve in developing this business. The extent andvaried nature of our current commercial product portfolio and productdevelopment programme gives us increased confidence that TFP will continue togrow profitably, although as shareholders should appreciate, it may beunrealistic to expect growth to be sustainable at the rate achieved in the pastyear". "Cash management continues to be under firm control. Investment over the nexttwo years will be prioritised on business development and projects to minimiseenergy costs and improve operating efficiencies". "We look forward to restoring our progressive dividend policy as we continue tomake further progress with the business". J A Cropper, Chairman FULL STATEMENT ATTACHED Enquiries:Alun Lewis, Chief Executive Fiona Tooley, Director (07785 703523)John Denman, Group Finance Director Keith Gabriel, Account Manager (07770 788624)James Cropper PLC Citigate Dewe RogersonToday: 020 7638 9571 (8.00am - 12.00noon) Today: 020 7638 9571Thereafter: 01539 722002 Thereafter: 0121 455 8370www.cropper.com Ifor Williams, Director Ian Stanway, Director Brewin Dolphin Securities Limited Telephone: 0121 236 7000 -2- -----------------------------------------------------------Summary of Results IFRS basis UK GAAP basis 2007 2006 2005 2005 2004 2003Group turnover £'000 69,085 64,201 64,568 64,568 58,010 56,419 ----------------------------------------------------------- Profit and Loss Summary £'000-------------------------------------------------------------------------------------Trading activities Paper Division(papermaking and retail) 1,077 (6) 2,157 2,207 806 1,011 Converting Division 460 62 385 389 438 551 TechnicalFibre Products 2,053 777 521 522 506 646 Other Group expenses (86) ----------------------------------------------------------- 3,504 833 3,063 3,118 1,750 2,208Director andemployee bonuses (433) ----------------------------------------------------------- "On-going" tradingoperating profit 3,071 833 3,063 3,118 1,750 2,208 Profit on saleof trade investment 116 ----------------------------------------------------------- Trading operatingprofit 3,071 949 3,063 3,118 1,750 2,208 Joint venture (95) (89) (114) (114) (93) (23) Other income/(expenditure) (200) (200) (50) 16 -----------------------------------------------------------Trading profitbefore interest 2,976 860 2,749 2,804 1,607 2,201 Net interest (438) (511) (357) (337) (355) (408) ----------------------------------------------------------- Trading profit before tax 2,538 349 2,392 2,467 1,252 1,793 ----------------------------------------------------------- (After future service pension contributions paid)-------------------------------------------------------------------------------------Net pension adjustments toOperating profit (610) (364) (423) (696) (467) 74 Net interest 179 (114) (330) ------------------------------------------------------------Net pension adjustment before tax (431) (478) (753) (696) (467) 74 ------------------------------------------------------------ ------------------------------------------------------------------------------------Overall Group afterpension adjustments Operating profit 2,461 585 2,640 2,422 1,283 2,282 Joint venture (95) (89) (114) (114) (93) (23) Other (expenditure)/income (200) (200) (50) 16 -----------------------------------------------------------Profit beforeinterest 2,366 496 2,326 2,108 1,140 2,275 Net interest (259) (625) (687) (337) (355) (408) -----------------------------------------------------------Profit/(Loss)before Tax 2,107 (129) 1,639 1,771 785 1,867 ------------------------------------------------------------------------------------------------------------------------------------------------ Earnings/(Loss) per Share 16.2p (1.2p) 12.6p 13.8p 7.6p 15.1p Dividends per Share 7.0p 4.1p 8.2p 8.2p 7.8p 7.5p ----------------------------------------------------------- Balance Sheet Summary £'000 Non-pension assets -excluding cash 45,758 46,668 47,005 46,155 45,759 43,627 Non-pension liabilities -excludingborrowings (13,505) (11,993) (11,524) (12,044) (11,184) (10,376) ------------------------------------------------------------ 32,253 34,675 35,481 34,111 34,575 33,251Net pension(liabilities)/assets (4,306) (7,221) (7,495) 831 (73) 394 ------------------------------------------------------------- 27,947 27,454 27,986 34,942 34,502 33,645 Net borrowings (5,294) (8,595) (8,350) (7,404) (7,427) (6,526) ------------------------------------------------------------Equity shareholders'funds 22,653 18,859 19,636 27,538 27,075 27,119 ------------------------------------------------------------ Gearing % 23 46 43 27 27 24 ------------------------------------------------------------ -3- James Cropper PLC Preliminary Audited Results for the year ended 31 March 2007 STATEMENT BY THE CHAIRMAN, J A CROPPER I am delighted to report that the Group recorded a profit before tax of£2,107,000 for the year (a profit of £2,538,000 prior to net IFRS pensionadjustments). This compares with a loss before tax of £129,000 in 2006 (a profitof £349,000 prior to net IFRS pension adjustments). The Group's recovery was spearheaded by a very significant increase in sales byTechnical Fibre Products, reduced energy costs and through increased turnoverand improved efficiencies within James Cropper Speciality Papers. DividendsOur strong recovery and return to profitability is reflected in the proposedincrease in dividend to shareholders. The Board is proposing a final dividendpayment of 5.1p, making a total dividend for the full year of 7.0p compared to4.1p in 2006, an overall increase of 71%. AIMThe Board, after careful consideration, proposes to move the trading of theCompany's issued share capital from the Official List of the UK ListingAuthority to the Alternative Investment Market ("AIM") of the London StockExchange plc. The Board considers that AIM would provide a regulatory frameworkmore appropriate to a company of James Cropper's size. A Circular explaining the implications of the proposed move to AIM and givingNotice of an Extraordinary General Meeting to approve the de-listing of theCompany's shares from the Official List is expected to be despatched toshareholders at the same time as the Company's Annual Report and FinancialStatements scheduled to be posted on 9 July 2007. It is expected that the Extraordinary General Meeting to approve the de-listingwill be held following the conclusion of the Annual General Meeting, which is tobe held on 1 August 2007. Technical Fibre Products ("TFP")Operating profit for the year was £2,053,000 against £777,000 in 2006, withturnover improving overall by 34% on the previous year to £9,003,000. Given the 11% weakening of the US$ over the year TFP's results are impressive.Sales into the North American market grew by 48% in £Sterling terms and by 61%in US$ terms. Global growth of engineered composite materials, the continuedresurgence of commercial aircraft new-builds and the commercialisation ofconductive components in consumer electronics have been prime drivers behindthis growth. At the average exchange rate for the year, sales to the NorthAmerican market represented approximately 48% of TFP's turnover in £Sterlingterms. Sales to Rest of the World were ahead by 23%, with sales of composite andinsulating materials leading the way. Our position in the European thermalinsulation market has been strengthened as a consequence of TFP's main customerin this market transferring responsibility for converting operations to TFP inthe fourth quarter of the year. continued... -4- James Cropper Speciality Papers ("Speciality Papers")Speciality Papers reported an operating profit of £1,435,000 compared to a lossof £247,000 last year. Sales increased by 5% to £45,967,000, with UK and export sales improving by 7%and 2% respectively. Volume increased by 3%. Although price increases wereachieved, the competitive nature of both UK and export markets limited the fullrecovery of the dramatic cost increases experienced and reported in previousyears. The sudden reversal in the latter part of the year of the steep upward trend inthe cost of natural gas experienced in the previous 12-month period had a verysignificant impact on the profitability of Speciality Papers. Although theaverage cost of natural gas in the first half was 34p per therm, up 15% on theprevious period, prices fell in the second half of the year bringing the averagefor the full year to 31p per therm, down 34%. The fall was driven by increasedUK storage capacity, commissioning of additional pipelines from Europe and amilder winter. Expenditure on gas totalled £2.2m for the year against £3.2m inthe previous year. The saving derived from the fall in energy costs was offset by a steady increasein the cost of pulp. Although the • was relatively stable against £Sterlingthroughout the year, the US$ fell significantly against both currencies. Thisaffected the relative prices of Northern Bleached Softwood Kraft ("NBSK") pulp,the market benchmark priced in US$s and hardwoods priced in •. NBSK opened thefinancial year at US$630 per tonne and increased progressively to US$760 pertonne at the end of the financial year, up 21%. The cost of • priced hardwoodsfluctuated by a much smaller degree during the course of the year. Overall pulpcosts in the year were £0.8m higher than in the previous 12 months. During the year significant progress was made with regard to the reduction ofthe cost base through greater energy efficiency, improved productivity and lowerwastage. James Cropper Converting ("Converting")Converting's turnover increased by 2% to £11,157,000. Operating profit was£460,000 compared to £62,000 in the previous year. (The prior year's profit wasafter a deduction of £250,000 relating to accelerated depreciation attributableto the rationalisation of laminating equipment anticipated in the past financialyear). The incremental improvement in profitability in the year primarily derived fromthe substantial refurbishment of an existing laminating line. This investmentwas commissioned half way through the financial year being reported and hasdelivered a significant increase in capability, output and productivity. Theweakening of the US$ over the year adversely affected margins on mountboardsales to the USA. The Paper Mill ShopThe depressed level of consumer spending across most of the retail sector, whichhas been widely reported, continued to affect The Paper Mill Shop. Turnover was £6,038,000, down 2% on the previous year, whilst the operatingprofit of £241,000 reported last year was reduced to a loss of £358,000.Although only one new outlet was opened during the course of the year, branddevelopment was extended through the launch of an Internet offering whichcommenced trading in the second half-year. During the year we also commissioned external research into the papercraftmarket. The Board, having reviewed the results of this research, has agreed aplan to implement the recommendations made in order to restore this subsidiary'sprofitability. continued... -5- Pensions and International Accounting Standard 19 ("IAS 19")Over the course of the year we have witnessed a significant improvement in thepension position, with the IAS19 deficit declining by £4,163,000 to £6,152,000as at 31 March 2007. (2006 - £10,315,000) Actual future service pension contributions paid in the period by the Group toits two final salary schemes in accordance with the Actuaries' recommendations,resulting from their latest "on-going" valuations, were £988,000. Under IAS 19the charge against profit in the year was £1,419,000, which was £431,000 inexcess of the future service contributions that were actually required. Inaddition, contributions totalling £838,000 were paid to the two schemes inrespect of their past service deficits brought forward. OutlookTFP's exceptional growth in the past financial year being reported has rewardedour patient, long-term resolve in developing this business. The extent andvaried nature of our current commercial product portfolio and productdevelopment programme gives us increased confidence that TFP will continue togrow profitably, although as shareholders should appreciate, it may beunrealistic to expect growth to be sustainable at the rate achieved in the pastyear. The impact of reduced energy costs on Speciality Papers is most welcome. Howevera further significant fall in the price of gas over the coming year is notanticipated, whilst pulp is expected to continue on an upward trend over thisperiod. In the past year Speciality Papers has successfully developed andimplemented plans that have lead to improved productivity and reduced wastage.Our efforts to increase efficiency will continue, along with our drive toincrease sales of higher margin products. The recovery of Converting's fortunes following the commissioning of there-furbished laminating line is gratifying. We believe that the full year impactof this investment will be evident in this new financial year. It is clear from The Paper Mill Shop's detailed research that the papercraftmarket continues to grow and provide opportunities. The research gives the Boardconfidence that this subsidiary can be developed into a substantially biggerretail business and that its profitability can be restored over the next threeyears. Cash management continues to be under firm control. Investment over the next twoyears will be prioritised on business development and projects to minimiseenergy costs and improve operating efficiencies. We look forward to restoring our progressive dividend policy as we continue tomake further progress with the business. -6- James Cropper PLC Preliminary Results Audited Group Profit and Loss Accountfor the period ended 31 March 2007 2007 2006 £'000 £'000-------------------------------------------------------------------------------Continuing operations Turnover 69,085 64,201 Other income 195 247 Changes in inventories of finished goods and work inprogress (87) 210 Raw materials and consumables used (30,425) (27,720) Energy costs (2,833) (4,139) Employee benefit costs (17,269) (16,906) Depreciation and amortisation (3,315) (3,715) Other expenses (12,890) (11,709) Profit on sale of trade investment - 116-------------------------------------------------------------------------------Operating profit 2,461 585 Interest expense (783) (888) Interest income 524 263 Share of post tax loss from joint ventures (95) (89)-------------------------------------------------------------------------------Profit/(loss) before tax 2,107 (129) Taxation (746) 27-------------------------------------------------------------------------------Profit/(loss) for the period attributable to equityholders of the company 1,361 (102)------------------------------------------------------------------------------- Earnings/(loss) per share expressed in pence per share- Basic 16.2p (1.2p) - Diluted 16.2p (1.2p)-------------------------------------------------------------------------------Dividends per share expressed in pence per share - 2007 interim dividend paid 1.9p 1.9p - 2007 final dividend proposed 5.1p 2.2p------------------------------------------------------------------------------- -7- James Cropper PLC Preliminary Results Audited Balance Sheets at 31 March 2007 Group Company 2007 2006 2007 2006 £'000 £'000 £'000 £'000Assets Non-current assets Intangible assets 1,351 1,316 1,351 1,316 Property, plant and equipment 21,517 23,763 1,080 1,295 Investments in subsidiaries - - 7,350 7,350 Investments in joint ventures 58 77 - - Financial assets Deferred tax assets 1,846 3,095 1,846 3,095-------------------------------------------------------------------------------- 24,772 28,251 11,627 13,056--------------------------------------------------------------------------------Current assets Inventories 8,366 8,267 - - Trade and other receivables 14,462 13,399 26,500 28,839 Financial assets- Derivative financial instruments 4 2 4 2 Cash and cash equivalents 3,730 1,762 422 1,087 Current tax assets - - 67 --------------------------------------------------------------------------------- 26,562 23,430 26,993 29,928--------------------------------------------------------------------------------Liabilities Current liabilities Trade and other payables (8,544) (7,727) (3,173) (4,516) Financial liabilities- Borrowings (2,374) (2,244) (2,374) (2,244) Current tax liabilities (1,020) (465) - (104)-------------------------------------------------------------------------------- (11,938) (10,436) (5,547) (6,864)--------------------------------------------------------------------------------Net current assets 14,624 12,994 21,446 23,064--------------------------------------------------------------------------------Non-current liabilities Financial liabilities- Borrowings (6,650) (8,113) (6,650) (8,113) Retirement benefit liabilities (6,152) (10,315) (6,152) (10,315) Deferred tax liabilities (3,941) (3,958) (584) (558)-------------------------------------------------------------------------------- (16,743) (22,386) (13,386) (18,986)--------------------------------------------------------------------------------Net assets 22,653 18,859 19,687 17,134--------------------------------------------------------------------------------Shareholders' equity Ordinary share capital 2,118 2,090 2,118 2,090 Share premium 573 454 573 454 Translation reserve (8) 10 - - Other reserves - 61 - 14 Retained earnings 19,970 16,244 16,996 14,576--------------------------------------------------------------------------------Total shareholders' equity 22,653 18,859 19,687 17,134-------------------------------------------------------------------------------- -8- James Cropper PLC Preliminary Results Audited Cash flow statements for the period ended 31 March 2007 Group Company 2007 2006 2007 2006 £'000 £'000 £'000 £'000--------------------------------------------------------------------------------Cash flows from operating activities Cash generated from/(used by)operations 4,954 3,876 (824) 393 Interest received 549 262 1,822 1,623 Interest paid (760) (854) (740) (753) Tax (paid)/received (87) (198) - (76)--------------------------------------------------------------------------------Net cash from operating activities 4,656 3,086 258 1,187--------------------------------------------------------------------------------Cash flow from investing activities Investment in joint venture (87) (67) - - Purchase of intangible assets (254) (206) (254) (206) Purchase of property, plant andequipment (2,502) (2,683) - (214) Proceeds from sale of trade investment - 311 - 311 Proceeds from sale of property, plantand equipment 1,691 - 10 - Dividends received - - 850 ---------------------------------------------------------------------------------Net cash (used in)/generated frominvesting activities (1,152) (2,645) 606 (109)--------------------------------------------------------------------------------Cash flows from financing activities Net proceeds from issue of new bankloan 1,000 4,000 1,000 4,000 Net proceeds from issue of ordinaryshare capital 147 - 147 - Finance lease capital payments - (96) - - Repayment of borrowings (2,333) (1,843) (2,333) (1,843) Dividends paid to shareholders (343) (686) (343) (686)--------------------------------------------------------------------------------Net cash (used in)/generated fromfinancing activities (1,529) 1,375 (1,529) 1,471--------------------------------------------------------------------------------Effect of exchange rate changes (7) - - ---------------------------------------------------------------------------------Net increase/(decrease) in cash andcash equivalents 1,968 1,816 (665) 2,549 Cash and cash equivalents at the startof the period 1,762 (54) 1,087 (1,462)--------------------------------------------------------------------------------Cash and cash equivalents at the endof the period 3,730 1,762 422 1,087--------------------------------------------------------------------------------Cash and cash equivalents consists of:--------------------------------------------------------------------------------Cash at bank and in hand 3,730 1,762 422 1,087-------------------------------------------------------------------------------- -9- James Cropper PLC Preliminary Results Audited Statements of Recognised Income and Expense for the period ended 31March 2007 Group Company 2007 2006 2007 2006 £'000 £'000 £'000 £'000 Profit/(loss) for the financial period 1,361 (102) 102 580 Currency translation differences on foreigncurrency investment (18) 16 - - Retirement benefit liabilities - actuarialgains/(losses) 3,756 (44) 3,756 (44) Deferred tax on actuarial gains/(losses) onretirement benefit liabilities (1,127) 13 (1,127) 13--------------------------------------------------------------------------------Total recognised income/(expense) for the 3,972 (117) 2,731 549period-------------------------------------------------------------------------------- -10- James Cropper PLC Preliminary Results For the year ended 31 March 2007 1. Basic earnings per share have been calculated on the profit after taxation of £1,361,000 (2006: loss £102,000) divided by the weighted average number of Ordinary shares in issue during the period of 8,376,198 (2006: 8,359,114). 2. The dividend will, if approved, be paid on 10 August 2007 to all shareholders on the Register on 20 July 2007. 3. The principal accounting policies adopted in the presentation of the IFRS financial statements are consistent with the previous year. 4. The financial information set out above does not constitute the statutory accounts for the years ended 31 March 2007 and 1 April 2006. Statutory accounts for 2006 have been delivered to the Registrar of Companies and those for 2007 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. 5. The Annual Report and Accounts for 2007 will be posted to shareholders 10 July 2007 and will also be available on request from the Company's registered office, Burneside Mills, Kendal, Cumbria LA9 6PZ. 6. The Annual General Meeting of the Company will be held at 10.30am on Wednesday 1 August 2007 at the Bryce Institute, Burneside, Kendal, Cumbria This information is provided by RNS The company news service from the London Stock Exchange