REG - Cropper(James) PLC - Final Results
21/06/2022 07:00
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RNS Number : 5591P Cropper(James) PLC 21 June 2022
James Cropper plc ('CRPR', the 'Company' or the 'Group'), the leading advanced
materials and paper products group is pleased to announce its
Preliminary results for the 52 weeks ended 26 March 2022
Revenue achieves new high, entering new financial year with a strong order
book projection.
52 weeks ended 26 March 2022 52 weeks ended 27 March 2021
£'m £'m
Revenue 104.9 78.8
Adjusted operating profit (excluding IAS19 and exceptional items) 4.6 4.5
Operating profit 3.7 2.4
Adjusted profit before tax (excluding IAS19 and exceptional items) 4.0 4.0
Impact of IAS19 on income statement (0.9) (0.8)
Exceptional items (0.3) (1.5)
Profit before tax 2.8 1.7
Earnings per share - basic and diluted 14.2p 16.4p
Proposed final dividend per share 7.5p Nil
Total dividend for the year 10.0p Nil
Net borrowings (12.6) (7.5)
Net borrowings (excluding right-of-use leases) (8.6) (3.7)
Equity shareholders' funds 34.8 29.9
Gearing % - before IAS 19 deficit 28% 17%
Gearing % - after IAS 19 deficit 36% 25%
Capital expenditure 6.8 3.1
Highlights
· Revenues up by 33% and higher than pre-pandemic levels, with
growth in all divisions.
· Profit before tax up by 62%.
· TFP Hydrogen performing better than expectations. TFP revenue up
by 27%.
· Colourform achieves a positive EBITDA and 19% revenue growth.
· Paper impacted with substantial energy costs with 37% revenue
growth but a loss before tax.
· New loan facility of £25m under UK Export Finance to support
sustainable strategic growth plans.
· Investment expenditure doubled to £6.7m, to support growth
plans.
· Return to dividend payments with a proposed 7.5p final dividend,
making a total of 10.0p per share (2021: nil pence per share).
· The Group board strengthened with two new NEDs and appointment of
TFP Managing Director complete.
Mark Cropper, Chairman, commented:
"The green agenda represents a significant growth opportunity for all our
divisions."
"Looking forward the outlook remains positive across the Group."
"Our mantra since the earliest days of the Covid crisis has been to "emerge
stronger" and I am confident that this has truly been the case".
Enquiries:
Isabelle Maddock, Chief Financial Officer Robert Finlay, Henry Willcocks, John More
James Cropper PLC (AIM :CRPR.L) Shore Capital
Telephone: +44 (0) 1539 722002 Telephone: +44 (0) 20 7601 6100
www.jamescropper.com (http://www.jamescropper.com)
The Annual General Meeting of the Company will be held at 11.00am on Wednesday
27 July 2022 at the Bryce Institute, Burneside, Cumbria.
52 weeks ended 52 weeks ended
26 March 2022 27 March 2021
Summary of results £'000 £'000
Revenue 104,922 78,768
Adjusted operating profit (excluding IAS19 and exceptional items) 4,585 4,510
Adjusted profit before tax (excluding IAS19 and exceptional items) 4,045 4,023
Impact of IAS 19 (914) (802)
Exceptional items (354) (1,502)
Profit before tax 2,777 1,719
52 weeks ended 52 weeks ended
27 March 2021 27 March 2021
£'000 £'000
Revenue
James Cropper Paper 70,350 51,376
Colourform 3,363 2,822
Technical Fibre Products 31,209 24,570
104,922 78,768
Adjusted operating profit (excluding IAS19 and exceptional items) 4,585 4,510
Net interest (excluding IAS19 impact) (540) (487)
Adjusted profit before tax (excluding IAS19 and exceptional items) 4,045 4,023
IAS19 pension adjustments
Net current service charge against operating profits (547) (563)
Finance costs charged against interest (367) (239)
(914) (802)
Exceptional items
Restructuring costs - (1,118)
Transaction costs on acquisition of a business - (384)
Increased earn out provisions (354) -
(354) (1,502)
Profit before tax 2,777 1,719
The IAS 19 pension adjustments are explained in detail in the Financial Review
section of the Annual Report. The total amount excluded from the IAS pension
Charge is £914k (2021: £802k). The adjustment, which we refer to in these
accounts as the "IAS 19 impact" represents the difference between the pension
charge as calculated under IAS 19 and the cash contributions for the current
service cost only as determined by the latest triennial valuation. The
Directors consider that the adjusted pension charge better reflects the actual
pension costs for ongoing service compared to the IAS 19 charge. This
adjustment is made internally when we assess performance and is also used in
the EBITDA and EPS targets used in management incentive schemes
The IAS 19 pension adjustment to the income statement of £914k (2021: £802k)
comprises:
Period ended 26 March 2022 Period ended 27 March 2021
£'000 £'000
Current service charge 1,203 1,034
Normal contributions (656) (471)
Interest charge 367 239
IAS 19 pension adjustment 914 802
Balance sheet summary As at 26 March 2022 As at 27 March 2021
£'000 £'000
Non-pension assets - excluding cash 82,302 70,780
Non-pension liabilities - excluding borrowings (25,069) (18,444)
57,233 52,336
Net IAS19 pension deficit (after deferred tax) (9,847) (14,933)
47,386 37,403
Net borrowings (12,572) (7,502)
34,814 29,901
Equity shareholders' funds
Gearing % - before IAS19 deficit 28% 17%
Gearing % - after IAS19 deficit 36% 25%
Capital expenditure 6,761 3,127
Chairman's Letter
Dear Shareholders
The year to 26 March 2022 has been yet again another long and memorable year
for the Company and all those associated with it. The challenges have
continued with the tail end of the pandemic, not so long ago joined by the
onset of the Ukraine war. Both have led to dramatic rises in input costs, in
particular in relation to energy. I am pleased to report the Group has
responded with mitigating actions at every step and as a result our revenues
are back to pre-pandemic levels, profits have risen and demand remains high
across all divisions.
The result has been driven in part by the record performance of the TFP
division, which has seen strong organic sales and the successful integration
of the newly rebranded TFP Hydrogen subsidiary, following the acquisition of
PV3 Technologies Limited ("PV3") in January 2021.
In financial terms, the Group reports a profit before tax of £2.8m for the
period. This was up by 62% versus the prior period with Group turnover rising
by 33%, split between Paper (+37%), TFP (+27%), and Colourform (+19%).
This year has also seen several changes at Board level. James Gravestock was
appointed Managing Director of the TFP division and an Executive Director of
the Group, following the departure of Martin Thompson. On behalf of the Board,
I would like to welcome James and to thank Martin for his significant
contribution over the past 18 years, not least his part in the significant and
sustained growth of the TFP division.
There were also significant changes on the non-executive side of the board.
Our Senior Independent Director Dr Andrew Hosty stepped down during the year
and I would also like to thank him for his valuable contributions in recent
years.
Following on from this the Board chose to appoint two new non-executive
directors in November: Sarah Miles, CEO of Feelunique.com, a market leader in
cosmetics and beauty e-commerce, and Martin Court, Chief Commercial Officer of
Victrex plc, the FTSE 250 advanced materials group. In April 2022 Martin
assumed the role of Senior Independent Director. They both bring with them a
wealth of commercial experience and I am delighted they chose to join us at an
exciting moment in our growth journey.
Turning to other themes, our growth and product development strategies are
also ever more aligned with helping our customers and consumers reduce their
environmental impact, whether via greener papers and packaging or the advanced
materials TFP has developed for a wide range of renewable energy.
Colourform continues to grow, with some highly creative innovative packaging
products launched in the luxury beauty and premium alcoholic beverage markets.
The division has generated a positive EBITDA for the first time as it
continues to grow towards sustainable profitability.
The growth of our new subsidiary TFP Hydrogen has exceeded expectations in the
year. This adds to the strong position TFP has built up over many years as a
maker of materials and components for both fuel cells and hydrogen
electrolysers. This sector is fast gaining traction as a key element of the
global transition away from fossil fuels. Furthermore TFP is on track to shift
the majority of its sales to applications supporting the Global Net Zero
Carbon emissions movement within the next five years; helping us as a business
to safeguard and protect the future of our planet.
Closer to home, we also continue to address our own impacts. During the year
we have progressed our programme to deliver significant decarbonisation by
2030 and the Paper division's ambition to source 50% of its fibre from waste
by 2025. We are also taking further steps, not least via our ESG
sub-committee, to better monitor and measure and ESG targets and further
evolve policies and programmes that align with our Purpose and Values.
The Board is recommending a final dividend of 7.5 pence per share, making a
total dividend for the year of 10.0 pence per share. A final dividend has not
been paid since 2019 owing to the pandemic. Earnings per share have fallen
by 13% to 14.2 pence.
I would like to thank our Board and all of our employees for the resilience
they have shown during what have been very challenging months and years. Our
mantra since the earliest days of the Covid crisis has been to "emerge
stronger" and I am confident that this has truly been the case.
Outlook
Looking forward, the outlook remains positive across the Group as we enter the
new financial year with a record order book. While there are short term
challenges in the Paper division due to external factors, we have put in place
measures to mitigate these and plans are well underway to transition all of
the divisions away from natural gas. The geopolitical climate has cemented and
accelerated Government support for cleaner and greener hydrogen energy and TFP
has the power to help facilitate this energy transition, by reducing costs and
improving accessibility. Overall the green agenda represents a significant
growth opportunity for all our divisions. Colourform will continue to grow
year-on-year and Paper's strategy to enrich margins will also be significantly
underpinned by its environmental initiatives.
Mark Cropper
Chairman
20 June 2022
Chief Executive's Review
I am pleased to report our financial results for the period, which yet again
underline the continued resilience of the Group as we successfully navigated
two unprecedented events - the end of the Covid pandemic, which saw resource
and supply chain challenges, and the Ukraine War, which sparked an energy
crisis and has compounded global inflation.
The Group has experienced strong demand throughout the period and across all
divisions, with over 30% sales growth in the current year to 26th March 2022,
which is ahead of previous market expectations.
Profit in 2021 included £2.9m of Covid-19 related government grants. No
grants were included in 2022, demonstrating a strong underlying Adjusted
profit before tax improvement from £1.1m (excluding grants) in 2021 to £4.0m
in 2022.
While all of the divisions have felt the impact of these events in some way,
the Paper division was significantly affected, as it is, by far, our most
energy-intensive division. The division is accountable for 88% of the Group's
energy expenditure, with costs in the period 70% higher than the pre-Covid
period ending March 2020. Up to the end of the period, the Group had
negotiated a fixed price contract for a significant proportion of the energy
purchased, mitigating the impact of the crisis in the short term. Once this
agreement ended in Q4, the division was exposed to the higher energy prices,
which has impacted Group results in the current period (as announced on 23
March 2022).
As with all energy intensive businesses, the Paper division continues to incur
higher than average energy costs, however, fixed prices for Q1 in the current
period and an energy surcharge to all customers of the division are mitigating
the impact over the medium term. The Paper division saw a strong recovery
following the impact of Covid, with revenues at 93% of pre-pandemic levels and
excellent customer retention rates. Programmes are well in advance to
transition all Group divisions away from natural gas dependence.
The TFP division has had a record year for revenue, including better than
expected results for the recently acquired TFP Hydrogen subsidiary, resulting
in a full earn out payment for year one of the earn out period, and an
increase in provisions for the future earn out expectations. Revenues were up
on the previous period by 27%, surpassing the previous highest turnover by
more than £4m, and higher than the pre-Covid period by 18%. Estimates suggest
hydrogen could eventually account for 18% of primary energy, underlining TFP's
role as an exciting and key growth area for the Group.
The Colourform division continues to grow with revenues up by 19% on the
previous period and 31% higher than the pre-Covid period. The division has
also shown positive EBITDA. With pioneering, award-winning products and high
profile brand partnerships secured for the short to medium term and energy
security from being powered by 100% renewable energy, Colourform is projected
to continue to grow year on year.
Revenue, Operating Profit and Capital Expenditure
Group revenue for the financial period was £104.9m, up 33% on the prior
period (2021: £78.8m), with profits before tax of £2.8m, an increase of 62%
on the prior period (2021: £1.7m). Earnings per share have risen 13% to 14.2p
per share (2021: 16.4p per share).
Revenue for the Paper division rose by 37% in the period to £70.4m generating
an operating loss of £2.4m compared to an operating loss of £0.4m in the
prior period, for reasons previously disclosed. Revenue for the TFP division
rose by 27% in the period to £31.2m generating an operating profit of £8.7m,
compared to an operating profit of £6.9m in the prior period. Revenue for
Colourform grew by 19% in the period to £3.4m, generating an operating loss
of £0.8m, compared to an operating loss of £1.4m in the prior period.
Capital investments during the period amounted to £6.8m compared to £3.1m in
the prior period.
The Group has completed a £25m financing deal with NatWest Bank and HSBC
Bank, supported by UK Export Finance. The funding will be used to invest in
additional investments to support our strategic growth plans and support our
ESG commitments including decarbonisation.
Group Strategy
Our company's Purpose (Pioneering Materials to Safeguard our Future) and
Values (Forward Thinking, Responsible and Caring), provide our guiding
principles for our growth strategies across each business.
Our main markets within each business include:
TFP Paper Colourform
· Clean Energy (Hydrogen) · Packaging · Wines & Spirits
· Defence · Art · Fragrances
· Aerospace · Design & Advertising · Beauty
· Green Technologies · Publishing
While operating under the Group's combined Purpose and Values, each business
division acts independently, focusing on niche markets and growth areas:
TFP
TFP is accelerating sales, particularly in clean energy, and building global
capacity.
Case study: TFP sales into clean energy, such as wind and hydrogen markets,
have grown by 75%, from £5.7m to £10.0m in the past 12 months. The division
has also achieved a 70% reduction in the volume of waste generated, compared
to 2015.
Paper
Paper is growing its market share in luxury packaging and focusing on
delivering improved margins.
Case Study: A key innovation of Paper is creating value from waste. As well as
increasing the level of upcycled material, such as coffee cups, into luxury
paper, the division has launched Rydal Apparel, which is a 100% recycled
packaging product, incorporating 20% used denim fabrics.
Colourform
Colourform has diversified its client base, by evolving from a sustainable
alternative to plastic packaging to delivering sustainable, highly designed,
point of sale outer packaging.
Case Study: The energy used to operate our Colourform factory is now 100%
powered by green electricity, most of which is from community owned solar
panels within our facility generating 1 megawatt - the UK's largest roof
mounted PV system.
Ethical Markets
As each business is focused on growing ethical and environmental markets, we
have undertaken a thorough ethical markets review of our current business and
its supply chain, which has resulted in exiting some markets.
Through an in-depth analysis of our upstream supply chain, we discovered a
small number of products in what we would classify unethical markets. We have
now appropriately exited these over the period and are building our market
pipelines aligned to our values.
Investing in Future Growth
Group investments in the year have doubled year on year, to £6.8m (2021:
£3.1m). In the year the additional production line in TFP became operational,
adding 50% additional capacity for non-woven materials. In addition, TFP's
acquisition of PV3 , rebranded TFP Hydrogen, was completed and provides
catalyse coating capability for hydrogen PEM electrolysers. A new TFP Hydrogen
coating line was started last year at our USA manufacturing facility, which
will be operational later this year and ready to serve the USA hydrogen
market.
Paper's luxury packaging products require unique embossing and sustainable
coatings and, to support market share growth, we began to create additional
manufacturing capability last year and established a new dedicated
manufacturing cell. This increased capacity and capability will be operational
later this financial year. As Colourform is focusing more attention to outer
finished sustainable packaging, there have been investments in both product
design capability and decorative product finishing.
Our People
At James Cropper we have a strong company culture, which is reflected in the
Purpose and Values we have set out and continue to build on and embed into the
entire Group. We have also updated our Code of Ethics, to create clear,
guiding principles that dictate how we engage with our clients, our suppliers,
and our colleagues. We will be supporting and embedding these ethics across
the Group, with further education and training during in the current period.
To demonstrate our commitment to improving the health and wellbeing of our
teams, our employee survey has been improved to provide more targeted and
clearer feedback on areas that are working well and can be replicated across
the Group, and areas in need of improvement.
Over 5% of our employees are starting their first career journey with James
Cropper, including four graduates and 27 apprentices. This, together with
working alongside local schools and colleges on STEM career awareness, helps
to encourage the next generation into our business, bringing with them
innovation and ideas as well as securing our future talent pipeline for the
Group.
To support our strategic ESG ambitions our long-term incentive programme for
senior leaders now incorporates additional non-financial measures, focusing on
ESG improvements.
I would like to take the opportunity to thank all the James Cropper employees
for their hard work during the year, they have showed tremendous commitment
and flexibility, and to demonstrate our thanks, we have awarded an extra day's
holiday to all employees.
The UK has a long history of being at the forefront of the science and
technology revolution - inventing some of the world's best technology, which
we still use to this day. At James Cropper we combine over 177 years of
experience with world leading innovation and pioneering manufacturing
technology, which together can help to safeguard the future of our planet.
Phil Wild
Chief Executive Officer
20 June 2022
From the Chief Financial Officer's Review:
Cash flow
In the period the Group's net cash inflow was £985k (2021: outflow £2,199k).
Investment expenditure commenced in the latter half of the prior year and
continued into this period to enable growth through an increase in capacity
and capability. Cash invested in working capital to support the return to
normal operations also increased. Lease and borrowing facilities increased in
the year to support all activities.
Funding and facilities
The Group funds its operations and investments from operating cash flow and
from borrowings and leases. The Group has a core banking facility in the UK
and further loan support in the USA, along with some lease arrangements, all
with high street banks.
The Group has a core £25m banking facility under UKEF's Export Development
Guarantee scheme which is aimed at enabling additional bank liquidity to
support exporters. This finance arrangement is available for general corporate
purposes and will be used to support strategic growth and innovation, capital
expenditure and decarbonisation programmes. The facility has an availability
period of 3 years and an overall tenor of 8 years, repayments are on a
straight line basis from years 4 to 8. The Group's key financial covenants are
EBITDA: Interest 4x, and the Net Debt: EBITDA 3.5x. A £4m CLBIL was taken out
in Oct 2020 as a safety net during the covid pandemic, this has been repaid in
full. The Group is in compliance with all its banking covenants at the period
end.
Cash and cash equivalents increased from £6,765k to £7,750k in the year.
Long term borrowings (falling due after more than a year) also increased by
£12,761k to £18,727k. The expiry profile of existing borrowings is detailed
in note 19.3 to the financial statements of the annual report. The Group is in
compliance with all its banking covenants at the period end. Undrawn
facilities comprise of unused overdraft facilities of £3,500k plus the total
unused credit facilities of £17,000k, this means a total of £20,500k remains
unutilised at the year-end date. Having taken account of current borrowings to
be paid within 12 months of the balance sheet date the Group has £26,655k
available to the Group beyond 12 months.
Funding 2022 2021 Change
£'000 £'000 £'000
Cash and cash equivalents 7,750 6,765 985
Borrowings: repayable within one year (1,595) (8,301) 6,706
Borrowings: non-current (18,727) (5,966) (12,761)
Net debt (12,572) (7,502) (5,070)
Borrowings: repayable within one year 1,595 8,301 (6,706)
Borrowings: non-current 18,727 5,966 12,761
Facilities drawn down 20,322 14,267 6,055
Undrawn facilities 20,500 11,260 9,240
Facilities 40,822 25,527 15,295
Cash and cash equivalents 7,750 6,765 985
Undrawn facilities 20,500 11,260 9,240
Funds available at year end 28,250 18,025 10,225
Borrowings: repayable within one year (1,595) (8,301) 6,706
Funds available in excess of one year 26,655 9,724 16,931
Net debt
The Group incorporates £3,949k (2021: £3,771k) of right-of-use leases in its
2022 borrowings figure. The Groups banking arrangements monitor net debt
excluding 1FRS 16. On this basis net debt has increased over the year from
£3,731k to £8,623k, an increase of £4,892k largely supporting the capital
and working capital requirements of each business as the Group emerges
stronger from the pandemic. Net debt including Right of use lease
liabilities is £12,572k, an increase of £5,070k on the prior period.
Net Debt before RoU leases 2022 2021
£'000 £'000
Cash and cash equivalents 7,750 6,765
All Borrowings excluding RoU leases (16,373) (10,496)
Net debt on an equivalent comparison basis (8,623) (3,731)
Going concern
The Directors carry out a review of the Group's financial position for the
period up to 12 months after the date of signing the audit report, providing a
comprehensive review of revenue, expenditure and cash flows taking into
account specific business risks, requirements and latest economic forecasts.
These inform the Group's cash and debt requirements. The Group's financial
position, cash flows, liquidity and borrowing facilities are described in the
financial statements. At 26 March 2022, James Cropper had £17m of undrawn
committed facilities. The principal loan arrangements are described in note 18
of the financial statements. The Group has £7.75m of cash available to
support its short term needs.
The Group's 12 month forecast period from the date of signing the audit report
has been tested for plausible downsides scenarios including further expected
effects of the pandemic, hampered market growth, increasing carbon cost and
commodity prices. In the event that a scenario partly or fully takes place
the Group has various options available to maintain liquidity and continue
operations. We have assessed the combined impact of these scenarios on the
Group's key financial metrics of EBITDA, net debt and net debt to underlying
EBITDA. The Group remains within its key financial covenant which is its net
debt to underlying EBITDA ratio must not exceed 3.5 times. The break-even
calculation indicates that EBITDA would need to fall 85% before triggering the
covenant. The Board is satisfied that the Group will be able to respond to
such scenarios through various means which may include a reduced or deferred
capital expenditure programme to ensure that the Group continues to meet its
ongoing obligations.
The Board is satisfied that the Group will have sufficient liquidity to meet
its needs over the 12 month forecast period from the date of signing the audit
report. The Directors have a reasonable expectation that the Group remains a
going concern over the forecast period.
The Board is satisfied it has sufficient cash resources to meet its
obligations as they fall due throughout this duration and the Board has a
reasonable expectation that the Company and the Group has adequate resources
to continue in operational existence for the foreseeable future.
CONSOLIDATED INCOME STATEMENT
52 week period 52 week period to 27 March 2021
to 26 March 2022
£'000 £'000
Revenue 104,922 78,768
Reversal of / (Provision for) impairment 184 (431)
Other income 744 3,036
Changes in inventories of finished goods and work in progress 385 598
Raw materials and consumables used (39,577) (28,290)
Energy costs (7,428) (3,078)
Employee benefit costs (30,535) (28,417)
Depreciation and amortisation (4,051) (4,489)
Other expenses (20,960) (15,252)
Operating Profit 3,684 2,445
Interest payable and similar charges (924) (730)
Interest receivable and similar income 17 4
Profit before taxation 2,777 1,719
Taxation (1,419) (153)
Profit for the period 1,358 1,566
Earnings per share - basic and diluted 14.2p 16.4p
OTHER COMPREHENSIVE INCOME
Profit for the period 1,358 1,566
Items that are or may be reclassified to profit or loss
Exchange differences on translation of foreign operations 49 (80)
Pulp hedge fair value adjustment (501) 501
Cash flow hedges - effective portion of changes in fair value 10 258
Foreign tax adjustment (13) -
Items that will never be reclassified to profit or loss
Retirement benefit liabilities - actuarial gains / (losses) 4,777 (8,750)
Deferred tax on actuarial (gains) / losses on retirement benefit liabilities (179) 1,663
Other comprehensive income / (expense) for the period 4,143 (6,408)
Total comprehensive income / (expense)/ for the period 5,501 (4,842)
Attributable to equity holders of the Company
STATEMENT OF FINANCIAL POSITION
Group Company
As at As at As at As at
26 March 2022 27 March 2021 26 March 2022 27 March 20201
£'000 £'000 £'000 £'000
Assets
Goodwill 1,264 1,264 - -
Intangible assets 1,584 1,946 769 1,013
Property, plant and equipment 30,551 30,696 1,630 1,774
Right-of-use assets 7,358 4,160 343 236
Investments in subsidiary undertakings - - 7,350 7,350
Deferred tax assets 3,534 3,729 3,459 3,706
Total non-current assets 44,291 41,795 13,551 14,079
Inventories 17,593 15,469 - -
Trade and other receivables 22,640 16,053 55,027 50,863
Provision for impairment (777) (961) - (260)
Other financial assets - 501 - -
Cash and cash equivalents 7,750 6,765 4,011 2,861
Corporation tax 1,838 1,425 968 1,384
Total current assets 49,044 39,252 60,006 54,848
Total assets 93,335 81,047 73,557 68,927
Liabilities
Trade and other payables 21,392 15,780 16,324 22,989
Other financial liabilities 6 16 6 16
Loans and borrowings 1,595 8,301 133 94
Total current liabilities 22,993 24,097 16,463 23,099
8,182
Long-term borrowings 18,727 5,966 211
Retirement benefit liabilities 13,130 18,436 13,130 18,436
Deferred consideration on business acquisition 578 401 - -
Deferred tax liabilities 3,093 2,246 123 102
Total non-current liabilities 35,528 27,049 21,435 18,749
Total liabilities 58,521 51,146 37,898 41,848
Equity
Share capital 2,389 2,389 2,389 2,389
Share premium 1,588 1,588 1,588 1,588
Translation reserve 553 504 - -
Reserve for own shares (1,407) (1,151) (1,407) (1,151)
Hedging reserve - 501 - -
Retained earnings 31,691 26,070 33,089 24,253
Total shareholders' equity 34,814 29,901 35,659 27,079
Total equity and liabilities 93,335 81,047 73,557 68,927
The Parent Company reported a profit for the period ended 26 March 2022 of
£4,554k (2021: £4,072k).
STATEMENT OF CASH FLOWS
Group
52 weeks ended 26 March 2022 52 weeks ended 27 March 2021
£'000 £'000
Cash flows from operating activities
Net profit 1,358 1,566
Adjustments for:
Tax 1,419 153
Depreciation and amortisation 4,051 4,489
Transaction costs on business acquisition - 384
Net IAS 19 pension adjustments within SCI 914 802
Past service pension deficit payments (1,443) (498)
Foreign exchange differences - 783
Gain on early termination of Right-of use assets - (19)
Bank Interest income (17) (4)
Bank interest expense 926 491
Share based payments (107) 245
Increase in inventories (2,103) (1,448)
(Increase) / decrease in trade and other receivables (6,448) 3,401
Increase / (decrease) in trade and other payables 5,773 (2,406)
Tax paid (972) -
Net cash generated from operating activities 3,351 7,939
Cash flows from investing activities
Purchase on intangible assets (56) (42)
Purchase of property, plant and equipment (6,705) (3,085)
Acquisition of business net of cash and cash equivalents - (1,359)
Net cash used in investing activities (6,761) (4,486)
Cash flows from financing activities
Proceeds from issue of new loans 9,754 6,390
Repayment of borrowings (3,123) (10,313)
Repayment of lease liabilities (1,111) (818)
Interest received 17 4
Interest paid (768) (353)
Distribution of own shares (256) 100
Dividends paid to shareholders (236) -
Net cash generated / (used) from financing activities 4,277 (4,990)
Net increase / (decrease) in cash and cash equivalents 867 (1,537)
Effect of exchange rate fluctuations on cash held 118 (662)
Net increase / (decrease) in cash and cash equivalents 985 (2,199)
Cash and cash equivalents at the start of the period 6,765 8,964
Cash and cash equivalents at the end of the period 7,750 6,765
Cash and cash equivalents consists of:
Cash at bank and in hand 7,750 6,765
7,750 6,765
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share capital Share premium Translation reserve Own shares Hedging Retained earnings
reserve Total
Group £'000 £'000 £'000 £'000 £'000 £'000 £'000
At 28 March 2020 2,389 1,588 584 (1,251) - 31,087 34,397
Comprehensive income for the period - - - - - 1,566 1,566
Total other comprehensive income - - (80) - 501 (6,829) (6,408)
Distribution of own shares - - - 100 - - 100
Share based payment charge - - - - - 246 246
Total contributions by and distributions to owners of the Group 100 -
- - - 246 346
At 27 March 2021 2,389 1,588 504 (1,151) 501 26.070 29,901
Comprehensive income for the period - - - - - 1,358 1,358
Total other comprehensive income - - 49 - (501) 4,595 4,143
Dividends paid - - - - - (236) (236)
Purchase of own shares - - - (256) - - (256)
Share based payment charge - - - - - (96) (96)
Total contributions by and distributions to owners of the Group -
- - - (256) (332) (588)
1,588 -
At 26 March 2022 2,389 553 (1,407) 31,691 34,814
Share capital Share premium Own shares Retained earnings Total
Company £'000 £'000 £'000 £'000 £'000
At 28 March 2020 2,389 1,588 (1,251) 27,073 29,799
Comprehensive income for the period - - - 4,072 4,072
Total other comprehensive income - - - (7,137) (7,137)
Distribution of own shares - - 100 - 100
Share based payment charge - - - 245 245
Total contributions by and distributions to owners of the Group - - 100 245 345
At 27 March 2021 2,389 1,588 (1,151) 24,253 27,079
Comprehensive income for the period - - - 4,554 4,554
Total other comprehensive income - - - 4,614 4,614
Dividends paid - - - (236) (236)
Purchase of own shares - - (256) - (256)
Share based payment charge - - - (96) (96)
Total contributions by and distributions to owners of the Group - - (256) (332) (588)
At 26 March 2022 2,389 1,588 (1,407) 33,089 35,659
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1 BASIS OF PREPARATION
James Cropper Plc (the Company) is a public limited company incorporated and
domiciled in the United Kingdom and listed on the Alternative Investment
Market (AIM). The condensed consolidated financial statements of the Company
for the 52 weeks ended 26 March 2022, comprise the Company and its
subsidiaries (together referred to as the Group).
Statement of compliance
The condensed consolidated financial statements have been prepared in
accordance with international accounting standards in conformity with the
requirements of the Companies Act 2006. As required by the Disclosure and
Transparency Rules of the Financial Services Authority, the condensed
consolidated set of financial statements have been prepared applying the
accounting policies and presentation that were applied in the preparation of
the Group's published consolidated financial statements for the 52 week period
ended 26 March 2022. They do not include all the information required for full
annual financial statements, and should be read in conjunction with the
consolidated financial statements of the Group for the 52 week period ended 26
March 2022.
The consolidated financial statements of the Group for the 52 week period
ended 26 March 2022 are available upon request from the Company's registered
office Burneside Mills, Kendal, Cumbria, LA9 6PZ or at www.jamescropper.com
(http://www.jamescropper.com) .
The financial information is presented in Sterling and all values are rounded
to the nearest thousand pounds (£'000) except where otherwise indicated.
Going concern
The Directors have performed a robust assessment, including review of the 12
month forecast period from the date of signing the audit report including
consideration of the principal risks faced by the Group and the Company,
including the potential impact of Covid 19 on the business, as detailed in the
Group's Annual Report 2022. Following this review the Directors are satisfied
that the Company and the Group have adequate resources to continue in
operational existence for the foreseeable future. Accordingly they continue to
adopt the going concern basis in preparing the condensed consolidated
financial statements.
Significant accounting policies
The accounting policies applied by the Group in these condensed consolidated
financial statements are the same as those applied by the Group in its
consolidated financial statements as at and for the 52 week period ended 26
March 2022.
2 Accounting estimates and judgements
The preparation of the financial statements requires management to make
judgements, estimates and assumptions that affect the application of
accounting policies and the reported amounts of assets and liabilities, income
and expenses. Actual results may differ from these estimates.
The significant judgements made by management in applying the Group's
accounting policies and the key sources of estimation uncertainty were the
same as those applied to the consolidated financial statements as at and for
the 52 week period ended 26 March 2022.
3 Risks and uncertainties
The principal risks and uncertainties which may have the largest impact on
performance are disclosed in the 2022 Annual Report and are namely:
Pandemic risk; fire; net zero emissions; pension; cyber risk; flood; water
abstraction; energy price volatility and pulp price volatility.
The Board considers that the principal risks and uncertainties set out in the
2022 Annual Report remain relevant for the current financial year.
4 Alternative performance measures
The Company uses alternative performance measures to allow users of the
financial statements to gain a clearer understanding of the underlying
performance of the business.
Profit before tax represents the Group's overall performance and financial
position, however it contains significant non-operational items relating to
IAS 19 that the Directors believe obscure an understanding of the key
performance trend.
Measures used to evaluate business performance are 'Adjusted operating profit'
(operating profit excluding the impact of IAS 19 and exceptional costs), and
'Adjusted profit before tax' (profit before tax excluding the impact of IAS 19
and exceptional costs). The alternative performance measures are reconciled in
note 9.
5 Earnings per share
The calculation of basic earnings per share is based on earnings attributable
to ordinary shareholders divided by the weighted average number of shares in
issue during the year. The calculation of diluted earnings per share is based
on the basic earnings per share adjusted to assume conversion of all dilutive
options.
6 Segmental information
IFRS 8 Operating Segments - requires that entities adopt the 'management
approach' to reporting the financial performance of its operating segments.
Management has determined the segments that are reported in a manner
consistent with the internal reporting provided to the chief operating
decision maker, identified as the Executive Committee that makes strategic
decisions. The committee considers the business principally via the four main
operating segments, principally based in the UK:
• James Cropper Paper Products (Paper): comprising:
• JC Speciality Papers - relates to James Cropper Speciality Papers a
manufacturer of specialist paper and boards.
• JC Converting - relates to James Cropper Converting - a converter of
paper.
• James Cropper 3D Products (Colourform) - a manufacturer of moulded fibre
products.
• Technical Fibre Products (TFP) - a manufacturer of advanced materials.
• Group Services - comprises central functions providing services to the
subsidiary companies.
Revenue Operating profit / (loss)
52 week period ended 52 week period ended 52 week period ended 52 week period ended 27 March
2021
26 March 2022 27 March 2021 26 March 2022
£'000 £'000 £'000 £'000
Paper 70,350 51,376 (2,338) (309)
Colourform 3,363 2,822 (754) (1,542)
TFP 31,209 24,570 8,684 6,482
Group services and other - - (1,007) (2,186)
104,922 78,768 4,585 2,445
7 Dividend
An interim dividend of 2.5p per share was paid in the period and the Board are
recommending a final dividend of 7.5p per share, making a total declared
dividend for the period of 10.0p per share. (2021: nil per ordinary share).
If approved by members at the Annual General Meeting, the final dividend will
be paid on 12 August 2022 to all shareholders on the register on 8 July
2022.
8 Retirement benefit obligations
Movements during the period in the Group's defined benefit pension schemes are
set out below:
52 week period ended 52 week period ended
26 March 2022 27 March 2021
£'000 £'000
Obligation brought forward (18,436) (9,382)
Expense recognised in the income statement (1,570) (1,273)
Contributions paid to the schemes 2,099 969
Actuarial (losses) and gains 4,777 (8,750)
Obligation carried forward (13,130) (18,436)
9 Alternative performance measures
52 week period ended 52 week period ended
26 March 2022 27 March 2021
£'000 £'000
Adjusted operating profit 4,585 4,510
Net IAS 19 pension adjustments:
current service costs (1,203) (1,034)
future service contributions paid 656 471
Exceptional Items:
restructuring costs - (1,118)
Transaction costs on acquisition of business - (384)
Increase in earn out provisions (354)
Operating profit 3,684 2,445
52 week period ended 52 week period ended
26 March 2022 27 March 2021
£'000 £'000
Adjusted profit before tax 4,045 4,023
Net IAS 19 pension adjustments:
current service costs (1,203) (1,034)
future service contributions 656 471
paid
finance costs (367) (239)
Exceptional items:
Restructuring costs - (1,118)
Transaction costs on acquisition of business - (384)
Increase in earn out provisions (354)
Profit before tax 2,777 1,719
10 Related parties
There have been no significant changes in the nature of related party
transactions in the period ended 26 March 2022 from that disclosed in the 2021
Annual report.
Statement of Directors' responsibilities
The Directors confirm that these condensed consolidated financial statements
have been prepared in accordance with International Financial Reporting
standards as adopted by the European Union and that the preliminary report
includes a fair review of the information required by DTR 4.2.7 and DTR 4.2.8,
namely:
(i) An indication of important events that have occurred
during the period and their impact on the condensed set of financial
statements, and a description of the principal risks and uncertainties for the
financial period; and
(ii) Material related party transactions in the period and
any material changes in the related party transactions described in the last
Annual report.
The Directors of James Cropper Plc are detailed on our Group website
www.jamescropper.com (http://www.jamescropper.com)
Forward-looking statements
Sections of this financial report may contain forward-looking statements with
respect to the Group's plans and expectations relating to its future
performance, results, strategic initiatives, objectives and financial
position, including liquidity and capital resources. These forward-looking
statements are not guarantees of future performance. By their very nature, all
forward-looking statements involve risks and uncertainties because they relate
to events that may or may not occur in the future and are or may be beyond the
Group's control. Accordingly, the Group's actual results and financial
condition may differ materially from those expressed or implied in any
forward-looking statements. Forward-looking statements in this financial
report are current only as of the date on which such statements are made. The
Group undertakes no obligation to update any forward-looking statements, save
in respect of any requirement under applicable law or regulation. Nothing in
this announcement shall be construed as a profit forecast.
Content of this report
The financial information set out above does not constitute the Group's
statutory accounts for the 12 months ended 26 March 2022 or 27 March 2021 but
is derived from those accounts.
Statutory accounts for the 12 months ended 27 March 2021 have been delivered
to the Registrar of Companies. The auditor, BDO LLP, has reported on the 2021
accounts; the report (i) was unqualified, (ii) did not include a reference to
any matters to which the auditor drew attention by way of emphasis without
qualifying their report, and (iii) did not contain a statement under section
498 (2) or (3) of the Companies Act 2006.
The statutory accounts for the 12 month period ended 26 March 2022 will be
delivered to the Registrar of Companies following the Annual General Meeting.
The auditor, BDO LLP, has reported on these accounts; their report (i) is
unqualified, (ii) does not include a reference to any matters to which the
auditor drew attention by way of emphasis without qualifying their report, and
(iii) does not include a statement under either section 498 (2) or (3) of the
Companies act 2006.
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