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 30 September 2017

Highlights

· Adjusted PBT (prior to IAS 19 impact) at £2.8m, up 17% on prior year comparative

· PBT at £2.3m, up 14% on prior year comparative

· EPS (diluted) up 33% to 22.9p from 17.2p on prior year comparative

· Revenue in TFP up 20% on prior year comparative. Total revenue up by 4.5%

· TFP is benefitting from increased activity in the sales of products for fuel cells

· Paper launches CupCycling™ and focused on strategy to develop mix

· Paper endures high pulp prices and has remained resilient in the first half

· 3DP launches Colourform™ and has commenced commercial orders

Mark Cropper, Chairman, commented:

"TFP has delivered its best ever sales performance for a half year and is set to continue growth in the second half. Although Paper is facing severe headwinds from the price of pulp this year, it has so far remained resilient and I am confident that future growth prospects continue to strengthen. 3DP is still at an early stage but its potential is being proven with commercial contracts and increasing interest in the sustainable and aesthetically superior alternative it offers over plastic packaging.

Within the Group we continue to invest significantly in people, markets, innovation and equipment. This will ensure that over the long term the Group has the potential to sustain growth across all its businesses. In the nearer term, the full year is expected to deliver in line with the Board's expectations."

Enquiries:

Dear Shareholders

I am pleased to report that James Cropper PLC recorded a 17% increase in adjusted profit before tax (excluding the impact of IAS 19) of £2.8m for the first half of the current financial year. This compares to £2.4m in the prior year. After the impact of IAS19, profit before tax is £2.3m, up from £2m in the prior comparative period. Meanwhile, Group revenues have increased by 4.5%.

The Group continues to experience increased pulp prices as first noted at the AGM in July. Since then prices have continued to rise, with corresponding impacts on margins in the Paper division. Nevertheless, Paper has so far been able to sustain profit levels compared to the prior year. Meanwhile, TFP profits have grown in the period. Finally, 3DP has commenced full-scale production on receipt of its first commercial contracts.

James Cropper Paper ("Paper")

Paper revenues have been maintained compared to the comparable period last year, with the UK experiencing a small planned downturn in sales and the US picking up contracts in digital and packaging, which are delivering growth.

The paper division has recently launched CupCycling™, a closed loop system which recycles post-consumer coffee cups into luxury bags. Our launch partner for this new capability was Selfridges and the offer is generating significant interest from industry and customers.

As noted above, during the first half and into the second half, pulp prices have placed downward pressure on our margins. Accordingly, profit growth for this business for the full year will be challenging.

Technical Fibre Products ("TFP")

TFP grew revenue by 20% over the comparable period last year. Double digit growth was achieved in aerospace, defence and fuel cell markets.

With regards to the latter, TFP supplies carbon fibre based substrates, which are used as the basis for manufacturing GDL (Gas Diffusion Layer) parts for fuel cells. TFP supplies substrate for various fuel cell technologies predominantly in Europe and the USA. After many years of development, this market is beginning to deliver commercial products.

TFP has over 30 years of experience in designing and manufacturing bespoke advanced non-woven materials for a variety of end uses and market sectors and continues to see significant growth potential through partnerships with corporations and institutions. The group has outstanding technical and marketing expertise and expects continued growth in the second half and beyond.

James Cropper 3D Products ("3DP")  

3DP has launched Colourform™, a product range offering renewable, recyclable moulded fibre packaging in almost limitless colours, shapes and surface finishes. Colourform™ provides a sustainable alternative to plastic packaging and is beginning to catch the imagination of global and domestic brands.

The production lines are fulfilling a number of commercial contracts which will aid this year's start up performance. The Division has a larger number of projects in the development pipeline. Capacity with existing production equipment is satisfactory to meet initial demand however the Group fully expects to invest further in due course as the attention and demand for the differentiated product offer grows. The Board remains confident that 3DP provides another significant 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 30 September 2017, revealed a combined deficit of £18.0m, compared with £18.8m as at 1 April 2017. After deferred taxation the net deficit stands at £14.7m.

Earnings per share and Dividend

Diluted earnings per share increased to 22.9 pence, compared to 17.2 pence in the prior year comparative period.

The Board have declared an interim dividend of 2.5p per share (2016: 2.5p). The final dividend for the year to 31 March 2018 will be subject to shareholder approval at the AGM on 25 July 2018.

Outlook

TFP has delivered its best ever sales performance for a half year and is set to continue growth in the second half. Although Paper is facing severe headwinds from the price of pulp this year, it has so far remained resilient and I am confident that future growth prospects continue to strengthen. 3DP is still at an early stage but its potential is being proven with commercial contracts and increasing interest in the sustainable and aesthetically superior alternative it offers over plastic packaging.

Within the Group we continue to invest significantly in people, markets, innovation and equipment. This will ensure that over the long term the Group has the potential to sustain growth across all its businesses. In the nearer term, the full year is expected to deliver in line with the Board's expectations.

Mark Cropper

Chairman

JAMES CROPPER PLC

UN-AUDITED STATEMENT OF COMPREHENSIVE INCOME

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:

 Non GAAP measures "(excluding IAS19 impact)" have been used to understand and compare the performance of the Group excluding the volatility of the pension adjustments under IAS19.

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 30 September 2017, which have not been audited or reviewed, have been prepared in accordance with the accounting policies adopted in the accounts for the 52 week year ended 1 April 2017.

b. The financial information set out above does not constitute statutory accounts within the meaning of the Companies Act 2006. The figures for the 52 week year ended 1 April 2017 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 30 September 2017 have been calculated by dividing the profits attributable to ordinary shareholders by 9,470,339 (2016: 9,284,126) 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 (2016: 2.5p per share) will be paid on 12 January 2018 to holders on the register at the close of business on 30 November 2017, with the last day for DRIP elections being 15 December 2017. The dividend relating to the 52 week year to 1 April 2017 was made up of an interim payment of £233,000 (2.5p per share) and a final dividend payment of £864,000 (9.3p 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

IAS19 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 IAS19 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.