Cropper (J) Regulatory News (CRPR)

James Cropper plc

(the "Company")

The advanced materials and paper products group, is pleased to announce its

Half - year results to 1 October 2016

* Includes Business Insurance Income of £750,000 in full year to 2 April 2016

** Net exceptional costs of £0.77m in full year to 2 April 2016

Highlights

· Sales in TFP up 21% on comparable period, up 5% in Paper

· PBT (prior to IAS 19) £2.4m up 46% on prior comparable period

· EPS (diluted) up 107% to 17.2p from 8.3p on prior period comparative

· 3DP launches business to the market

· Investment remains an important aspect for profitable growth

Mark Cropper, Chairman, commented:

"Innovation, driven from research & development activities, continues to be a major focus across the

 Group, delivering new products, solutions and technologies to the market.

The full year is expected to deliver in line with the Board's expectations and the outlook for the business this year remains encouraging."

Enquiries:

** Net exceptional costs of £765,000 in full year to 2 April 2016

Dear Shareholders

I am pleased to report that, in the first half of this financial year, James Cropper PLC made a 46% increase in profit before tax (excluding the impact of IAS 19), delivering £2.4m, compared to £1.7m in the prior year comparative. After the impact of IAS 19, profit before tax is £2m, up on £1m in the prior comparative period. Group revenues have increased by 8% compared to the prior year comparative, with sterling's depreciation only enriching revenues from export markets in the latter months. Sales, and profit have increased in both trading divisions.

James Cropper Paper ("Paper")

Paper revenues grew by 5% compared to the comparable period last year, driven by growing demand from both new and existing customers. In line with our growth plans, the domestic and overseas markets continue to offer opportunities for our packaging and photo quality papers. This year, the paper division brought several new products and solutions to market, making full use of exhibition presence and marketing media to launch. These include: Dolcelicious, Tailor - Made and Wall Ready Media, each a specialist and niche offering. During the second half, James Cropper Paper will continue to drive these initiatives as well as targeting continued growth.

Technical Fibre Products ("TFP")

TFP grew revenue by 21% compared to the comparable period last year, with demand across aerospace, energy and defence markets continuing to be strong. Commercial opportunities continue to rise in line with our aspirations. These include: providing materials for fuel cell technologies, fire protection, aircraft primary structure solutions and supporting advances in key areas of defence. Our R&D teams are well resourced, with both pilot and production scale equipment, and they are driving innovation internally as well as supporting customer driven developments. TFP expects continued growth in the second half.

James Cropper 3D Products ("3DP")  

3DP was formally launched at the London Packaging Innovations show in September 2016. 3DP showcased its range of sustainable moulded fibre products for use in packaging, an offer that is beginning to capture the attention of domestic and global brands. Subsequently, a number of exciting development projects and prototyping activities have commenced. The first phase of our investment, earlier this calendar year, facilitated the development and has proven a standout ability to create moulded paper packaging in vibrant colour. The second phase of investment, planned for early 2017, will deliver greater capacity with additional production equipment. This safeguards the business's ability to meet initial demand from future customers. The business remains confident that 3DP provides another growth platform for the Group.

Pension

The Group operates three pension schemes with close to 60% of employees holding a defined contribution personal payment plan. The Group operates two funded pension schemes providing defined benefits, for a decreasing number of its employees. The IAS19 valuations, for the defined benefit schemes as at 1 October 2016, revealed a combined deficit of £22.3m, compared with £7.9m as at 2 April 2016. The increase of £14.4m was principally caused by the drop in discount rates from 3.55% to 2.4% in the period. The overall value of the schemes' assets increased by 15% over the period, whilst the schemes' liabilities increased by 28%. The schemes are 83% funded at 1 October 2016 and after deferred taxation the net deficit stands at £18m.

Earnings per share and Dividend

Diluted earnings per share (after the adjustment for IAS19) increased to 17.2 pence, compared to 8.3 pence in the prior year comparative period.

The Board has agreed an interim dividend of 2.5 pence per share, up 13.6% on the prior year interim. The final dividend for the year to 1 April 2017 will be subject to shareholder approval at the AGM on 26 July 2017.

Outlook

Innovation, driven from research & development activities, continues to be a major focus across the Group, delivering new products, solutions and technologies to the market.

Our investment plans for people, development and equipment remain on track, and independent of political changes such as Brexit.

Each business division is expected to grow during the second half, albeit at a higher rate in the TFP division.

The full year is expected to deliver in line with the Board's expectations and the outlook for the business this year remains encouraging.

Mark Cropper

Chairman

JAMES CROPPER PLC

UN-AUDITED STATEMENT OF COMPREHENSIVE INCOME

 * Includes Business Insurance Income of £750,000 for the 53 week period to 2 April 2016

** The 53 week period to 2 April 2016 includes £765,000 net exceptional costs. 

JAMES CROPPER PLC

UN-AUDITED STATEMENT OF FINANCIAL POSITION

JAMES CROPPER PLC

UN-AUDITED STATEMENT OF CASH FLOWS

JAMES CROPPER PLC

STATEMENT OF CHANGES IN EQUITY

JAMES CROPPER PLC

NOTES TO THE UN-AUDITED INTERIM RESULTS

1. Basis of the preparation of IFRS financial information

a. These interim results have been prepared in accordance with the historical cost convention, as modified by the revaluation of land and buildings, and derivative financial instruments, and in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union (with the exception of IAS 34, Interim Financial Reporting) and International Financial Reporting Interpretation Committee ("IFRIC") interpretations and those parts of the Companies Act 2006 applicable to companies reporting under IFRS.

All references to:

 "Net IAS 19 pension adjustment" refer to the net impact on the statement of comprehensive income of the pension schemes' operating costs and finance costs.

b. The Group's policy is to maintain the ability to continue as a going concern, in order to provide returns to the shareholder and benefits to other stakeholders. Accordingly the going concern basis has been adopted in preparing these interim results.

2. Interim Statement

a. The summarised results for the half-year to 2 October 2016, which have not been audited or reviewed, have been prepared in accordance with the accounting policies adopted in the accounts for the 53 week year ended 2 April 2016.

b. The financial information set out above does not constitute statutory accounts within the meaning of the Companies Act 2006. The figures for the 53 week year ended 2 April 2016 are an extract of the full accounts for that year, which have been filed with the Registrar of Companies and on which the auditors gave an unqualified opinion.

c. A copy of the interim statement is available on our website (www.cropper.com).

3. Earnings per share

Basic earnings per share for the half year to 1 October 2016 have been calculated by dividing the profits attributable to ordinary shareholders by 9,284,126 (2015: 9,171,153) ordinary shares, being the weighted average number of ordinary shares during the period.

4. Dividend

A net interim dividend of 2.5p per Ordinary Share (2015: 2.2p per share) is proposed and will be paid on 13 January 2017 to holders on the register at the close of business on 16 December 2016. The dividend relating to the 53 week year to 2 April 2016 was made up of an interim payment of £201,000 (2.2p per share) and a final dividend payment of £648,000 (7.1p per share). The dividend is payable in cash. Shareholders have the opportunity to elect to reinvest their cash dividend and purchase existing shares in the Company through a Dividend Reinvestment Plan.

5. Pensions

IAS 19 regards a sponsoring company and its pension schemes as a single accounting entity rather than two or more separate legal entities. The actuarial valuation is the starting point for the creation of the IAS 19 accounting entity. The valuation determines the net position of a pension scheme, i.e. the difference between its assets and liabilities. The net position, surplus or deficit, is brought onto the sponsoring company's statement of financial position such that Reserves are immediately adjusted by the net position reduced by deferred tax. This obviously results in either an increase or decrease in the net asset value of the sponsoring company. At subsequent period-ends the movement in value from the previous valuation is expressed in the following component parts:

Statement of comprehensive income

Operating costs

Current service charge, being the cost of benefits earned in the current period shown net of employees' contributions.

§ Past service costs, being the costs of benefit improvements.

§ Curtailment and settlement costs.

Finance costs, being the net of

§ Expected return on pension scheme assets.

§ Interest cost on the accrued pension scheme liabilities.

Other comprehensive income

Actuarial gains and losses arising from variances against previous actuarial assumptions.

The above items are offset by actual contributions paid by the employer in the period.

IAS19 deficits are shown below at the corresponding financial position dates.