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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Cropper (james) Plc | LSE:CRPR | London | Ordinary Share | GB0002346053 | ORD 25P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 5.00 | 1.96% | 260.00 | 250.00 | 270.00 | 260.00 | 255.00 | 255.00 | 19,386 | 13:00:51 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Paper Mills | 130.45M | 516k | 0.0540 | 48.15 | 24.84M |
From Apr 2022 to Apr 2024
TIDMCRPR
RNS Number : 3584G
Cropper(James) PLC
15 November 2022
James Cropper plc ('CRPR', the 'Company' or the 'Group'), the leading advanced materials and paper products group is pleased to announce its
Half Year Results to 24 September 2022
"Decisive actions taken combined with the ongoing investments...has strengthened our long term growth prospects"
Hot Features
Premium
Half-year Half-year Full-year
to 24 September to 25 September to 26 March
2022 2021 2022
GBPm GBPm GBPm
Revenue 61.6 50.0 104.9
Adjusted operating profit * 0.5 2.5 4.6
Operating (loss) / profit (0.2) 2.3 3.7
Adjusted profit before tax * (0.0) 2.3 4.0
Impact of IAS 19 (0.3) (0.4) (0.9)
Impact of exceptional items (0.5) 0.0 (0.3)
(Loss) / profit before tax (0.8) 1.9 2.8
(Loss) / earnings per share -
basic and diluted (9.2)p 16.2p 14.2p
Dividend per share declared 2.0p 2.5p 10.0p
Net borrowings (12.2) (9.6) (12.6)
Equity shareholders' funds 34.3 32.3 34.8
Gearing % - before IAS 19 deficit 28% 21% 28%
Gearing % - after IAS 19 deficit 35% 30% 36%
Capital expenditure 2.4 2.9 6.8
* excludes the impact of IAS 19 and exceptional items (per note 8)
Headlines
-- Group revenues for the half year were up on the prior year (H1 2021) by 23%, driven by new customer wins and existing client growth
-- Demand remains strong, with revenue growth across each of the three divisions
-- Adjusted PBT (excluding IAS 19 impact and exceptional items) at GBPnil due to energy inflation and raw material price increases
-- Exceptional cost provision of GBP0.5m for contingent consideration as TFP Hydrogen projections increase
-- Cost of living payments totalling GBP0.7m paid to support employee health and wellbeing -- Interim Dividend declared at 2.0p per share (H1 2021: 2.5p)
-- Expectations for FY23 have been reduced with an adjusted PBT of GBP2.0m against previous market expectations of GBP5.4m, as announced on 31 October 2022
-- Capital investments in energy saving improvements to paper machines delivering 5-7% annualised reduction in site energy consumption
-- Decarbonisation project investment moving to planning application phase
-- Steve Adams appointed as Chief Executive Officer on 10 August 2022
Half-year Half-year Full-year
to 24 September to 25 September to 26 March
2022 2021 2022
Summary of results GBP '000 GBP'000 GBP'000
Revenue 61,583 50,039 104,922
Adjusted operating profit* 453 2,474 4,585
Operating (loss) / profit (213) 2,310 3,684
Adjusted (loss) / profit before
tax * (13) 2,263 4,045
Impact of IAS19 (304) (350) (914)
Exceptional items (note 8) (540) - (354)
(Loss) / profit before tax (857) 1,913 2,777
--------------------------------- ----------------- ----------------- -------------
* excludes the impact of IAS 19 and exceptional items (per note 8)
Half-year Half-year Full-year
to 24 September to 25 September to 26 March
2022 2021 2022
GBP'000 GBP'000 GBP'000
Revenue
Paper division 42,046 34,143 70,350
Colourform division 2,105 1,942 3,363
Technical Fibre Products division 17,432 13,954 31,209
---------------------------------------- ----------------- ----------------- -------------
61,583 50,039 104,922
Adjusted operating profit * 453 2,474 4,585
Adjusted net interest (466) (211) (540)
---------------------------------------- ----------------- ----------------- -------------
Adjusted (loss) / profit before
tax * (13) 2,263 4,045
IAS19 pension adjustments
Net current service charge against
operating profits (126) (164) (547)
Finance costs charged against interest (178) (186) (367)
---------------------------------------- ----------------- ----------------- -------------
(304) (350) (914)
Exceptional items (note 8) (540) - (354)
---------------------------------------- ----------------- ----------------- -------------
(Loss) / profit before tax (857) 1,913 2,777
---------------------------------------- ----------------- ----------------- -------------
* excludes the impact of IAS 19 and exceptional items (per note 8)
Balance sheet summary Half-year Half-year Full-year
to 24 September to 25 September to 26 March
2022 2021 2022
GBP'000 GBP'000 GBP'000
Non-pension assets - excluding
cash 85,113 74,213 81,846
Non-pension liabilities - excluding
borrowings (28,986) (19,482) (24,613)
56,127 54,731 57,233
Net IAS19 pension deficit (after
deferred tax) (9,677) (12,835) (9,847)
------------------------------------- ----------------- ----------------- -------------
46,450 41,896 47,386
Net borrowings (12,156) (9,637) (12,572)
------------------------------------- ----------------- ----------------- -------------
Equity shareholders' funds 34,294 32,259 34,814
------------------------------------- ----------------- ----------------- -------------
Gearing % - before IAS19 deficit 28% 21% 28%
Gearing % - after IAS19 deficit 35% 30% 36%
Capital expenditure 2,360 2,877 6,761
Mark Cropper, Chairman, commented: "While short term profitability has been impacted, the decisive actions taken combined with the ongoing investments across the Group has strengthened our long term growth prospects and we fully expect to return to profitability in the next six months."
"This Company is built on a strong heritage of innovation and a relentless focus on quality, which places us in a very strong position as we evolve and create a sustainable future."
James Cropper Group -- Purpose : Pioneering Materials to Safeguard our Future and Values : Forward Thinking, Responsible and Caring.
Enquiries:
Steve Adams, Chief Executive Officer Robert Finlay, Henry Willcocks,
John More
Isabelle Maddock, Chief Financial Shore Capital
Officer
James Cropper PLC (AIM :CRPR.L)
Telephone: +44 (0) 1539 722002 Telephone: +44 (0) 20 7601
6100
www.jamescropper.com
Media Enquires:
Anna Geffert, MD
HERA Communication Strategies
anna.geffert@heracomms.com / +44 (0) 7773 046 337
Dear Shareholders
The last six months have presented challenges, but I am pleased to report that we have responded well and Group revenues for the half year to 24 September 2022 have increased 23% on the prior year (H1 2021), with all three divisions seeing a rise in demand. The growing cost of energy (increasing 148% on the comparative period) and raw material inflationary headwinds (rising 20% on the comparative period) have resulted in sudden GBPmulti--million cost increases across the Company, which have negatively impacted profits. As a result, the adjusted profit before tax (excluding exceptional costs and the impact of IAS 19) is GBPnil for the first half of the current financial year, compared to GBP2.3m in the prior comparative period.
The Group responded to the impact of these sudden rises with a combination of energy surcharges and price increases but energy prices again spiked, from late July and again in August, with the surcharges unable to keep pace. In the second half of the year, the Group has implemented aggressive pricing actions and, eased by the recently announced Government support on energy prices, the surcharges will remain in place until no longer necessary. Each operating division is projecting volume growth, order books are full and the Company is focused on a range of enabling actions to build a solid foundation for continued future growth and a return to profitability.
Taking into consideration the current unprecedented macro--economic environment and the cost mitigation actions put in place, management expectations for the FY23 have been reduced with a year--end adjusted PBT of GBP2.0m against previous market expectations of adjusted PBT of GBP5.4m.
James Cropper Paper ("Paper")
The Paper division saw a 23% increase in revenue growth on the previous half year, with new contract wins in luxury packaging and strong customer advocacy with existing brands. As the Group's most energy intensive division, it has been hit the hardest by the current economic climate and in response the division is accelerating realignment of its customer and product portfolio, driving revenue to the more profitable core luxury packaging business. T he embossing and varnishing capacity in the Paper division, which provides much needed additional capacity and capability to meet demand in the luxury packaging market, is now installed and commissioned. The swift implementation of customer price rises and increased energy and freight surcharges will mitigate the rising costs seen in the first half of the financial year.
Colourform (TM) ("Colourform")
Colourform continues to grow, with an 8% half year revenue increase on the comparative period. The business is 100% powered by green electricity and is continuing to disrupt the luxury Packaging sector with award winning innovative and sustainable outer packaging. The design credentials earn the highest recognition - Winners of The Dieline Awards and two D & AD awards - and as part of the strategy to deliver aesthetic beauty alongside functionality, the business is currently exploring significant improvements in design and product quality, as well as exploiting the existing synergies with the luxury packaging focus in the Paper division.
Technical Fibre Products ("TFP")
TFP continues to perform well, with record sales and revenue growth up 25% on the prior half year. TFP Hydrogen is performing ahead of expectations, with applications continuing to drive the highest growth rates. The US electrolyser coating capability is now operational, while the new non-woven coating line is already supplying Global customers.
The sector has not been immune to raw material and energy inflation, which continues to be a challenge, but this has been managed through passing price increases directly to customers. The implementation of a dual sourcing programme, which will increase supply chain resilience, is also progressing well with the majority of critical raw materials identified and tested.
ESG
The rising cost of energy has placed renewed importance on our net zero and decarbonisation programmes. I am pleased to report that energy saving investments on paper machines are already delivering between 5-7% annualised reduction in site energy consumption. The Company is also moving the decarbonisation project investment to planning application and grant funding is being sought to help accelerate implementation. We remain committed to being operationally carbon neutral by 2030.
Pension
Overall, the combined funding position on an IAS19 measure for the combined schemes has decreased over the six month period from a deficit of GBP13.1million to a deficit of GBP12.9 million. The decrease has been driven by significant increase in corporate bond yields offset by high inflation and an increase in commutation factors on the works scheme.
Earnings per share and dividend
Basic and fully diluted (loss) / earnings per share decreased to (9.2) pence, compared to 16.2 pence in the prior year comparative period.
The Board has declared an interim dividend of 2.0p per share (2021: 2.5p).
Directorship Change
The appointment of Steve Adams as CEO, as announced on 10 August 2022, creates an opportunity for a division portfolio review, to ensure we deliver on our short and long term goals as we enter a new phase of growth. As an existing Executive Director of the Company and Managing Director of the James Cropper Paper Division, Steve joined the Company in 2017 and is perfectly positioned to oversee this work, which is already underway.
Change of Auditor
The Company is pleased to announce that, following a thorough competitive tender process, it has appointed Grant Thornton UK LLP ("Grant Thornton") as auditor to the Company with immediate effect.
Grant Thornton replaces BDO LLP which has formally resigned as the Company's auditor and has confirmed to the Company that, in accordance with Section 519 of the Companies Act 2006, there are no circumstances in connection with its resignation which it considers need to be brought to the attention of the Company's members or creditors.
Grant Thornton will conduct the audit of the Company's financial statements for the 53 week period ending 1 April 2023 and a proposal to re-appoint Grant Thornton as auditors of the Company will be subject to the approval of shareholders at the next Annual General Meeting of the Company to be held in 2023.
Outlook
With the new electrolyser coating line in the US operational and the new non-woven coating line already servicing clients, TFP is poised for continued growth, as the energy crisis continues to fuel the hydrogen market expansion.
Paper sales remain strong and the outlook is positive, with the customer price increases and energy and freight surcharges mitigating the external cost environment. The embossing and varnishing capacity has been commissioned, supporting a portfolio realignment and driving revenues to the profitable core business of luxury, sustainable packaging. This focus provides a clear and natural synergy with Colourform and we are exploring how we can exploit and capitalise on those synergies, to promote continued future growth and resilience across the Group.
While short term profitability has been impacted, the decisive actions taken, combined with the ongoing investments across the Group, has strengthened our long term growth prospects and we fully expect to return to profitability in the next six months. This Company is built on a strong heritage of innovation and a relentless focus on quality, which places us in a very strong position as we evolve and create a sustainable future.
Mark Cropper
Chairman
Chief Executive's Review
Our financial results for the period underline the strong customer demand and loyalty across each of the Company divisions, as we continue to navigate a challenging economic climate. The unprecedented inflation and energy costs have impacted overall profits in the short term, and while our long term growth and profitability remains very strong, this presents a natural opportunity to review each of the divisions and their operations.
Within the Paper division, as well as the significant price increases implemented to counter the impact of energy and raw materials costs increases, the division is right-sizing its product portfolio around a smaller, more profitable core, with luxury packaging at its centre. The division is also looking at a more productive operating model and a re-alignment of its supply chain organisation to drive end to end customer focus.
In Colourform there is now a concentrated effort on project pipeline acceleration in target segments and continued research and development into added-value capabilities such as novel embellishment techniques being scaled up.
TFP is building the organisational capability for future growth, with a continued strong focus on commercial and operational excellence. The hydrogen market continues to be a major area of growth and therefore focus, with new customer specifications gained in both GDL customers (non-woven) and electrolyser customers (coating). As a result of the future projections for TFP Hydrogen exceeding earlier expectations, additional provisions for contingent consideration have been included.
We aim to build on our foundation of pioneering new solutions, market-leading experience and expertise, long-term sustainable focus and a history of know-how and stewardship.
Our priorities for the mid-term are to increase our focus on new customer acquisition and drive disciplined, profitable growth. Delivering a step change in execution through investment in more capable systems and processes is key to improving response times to our customers.
The rejuvenation of our Technology & Innovation focus through our Innovation Forum is seeking to identify new growth opportunities that sit between our divisions and our pioneering efforts to decarbonise our operations are at the heart of our sustainability goals.
We are investing in our talent and leadership community to help us build modern business practices and ways of working that are efficient, flexible and responsive.
Most importantly, we will build on the strong heritage of James Cropper to position ourselves in a more meaningful way to our customers and the markets we serve.
I am pleased to have been appointed as the Chief Executive Officer at this exciting, but challenging time and remain committed to the work started by my predecessor, Phil Wild, to drive continued sustainable growth and build resilience within the Group.
Steve Adams
Chief Executive Officer
UN-AUDITED CONSOLIDATED INCOME STATEMENT
26 week period 26 week period 52 week period
to 24 September to 25 September to 26 March
2022 2021 2022
------------------------------------------ ---------------- ---------------- --------------
GBP'000 GBP'000 GBP'000
Revenue 61,583 50,039 104,922
Provision for impairment (loss)
/ reversal (69) - 184
Other income 770 379 744
Changes in inventories 1,975 1,772 385
Raw materials and consumables used (23,359) (19,438) (39,577)
Energy costs (8,031) (3,231) (7,428)
Employee benefit costs (18,031) (15,088) (30,535)
Depreciation and amortisation (2,090) (1,975) (4,051)
Other expenses (12,961) (10,148) (20,960)
Operating (loss) / profit (213) 2,310 3,684
Interest payable and similar charges (644) (415) (924)
Interest receivable and similar
income - 18 17
(Loss) / profit before taxation (857) 1,913 2,777
Taxation (26) (363) (1,419)
------------------------------------------ ---------------- ---------------- --------------
(Loss) / profit for the period (883) 1,550 1,358
(Loss) / earnings per share - basic
and diluted (9.2)p 16.2p 14.2p
UN-AUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME COMPREHENSIVE
INCOME
(Loss) / profit for the period (883) 1,550 1,358
------------------------------------------ ---------------- ---------------- --------------
Items that are or may be reclassified
to profit or loss
Foreign currency translation 440 1 49
hedges - effective portion of changes
in fair value 680 33 10
Pulp hedge fair value adjustment - 154 (501)
Foreign tax adjustment - - (13)
Items that will never be reclassified
to profit or loss
Retirement benefit liabilities -
actuarial (loss) / gain (66) 955 4,777
Deferred tax on actuarial loss /
(gain) on retirement benefit liabilities 17 (239) (179)
Other comprehensive income for the
period 1,071 904 4,143
------------------------------------------ ---------------- ---------------- --------------
Total comprehensive income for
the period attributable to equity
holders of the Company 188 2,454 5,501
------------------------------------------ ---------------- ---------------- --------------
UN-AUDITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
24September 25 September 26 March
2022 2021 2022
GBP'000 GBP'000 GBP'000
------------------------------------- ------------- ----------------- ----------------
Assets
Intangible assets 2,219 1,935 1,584
Goodwill 1,264 1,264 1,264
Property, plant and equipment 31,636 31,584 30,551
Right of use assets 7,528 4,219 7,358
Deferred tax assets 3,171 4,279 3,534
------------------------------------- ------------- ----------------- ----------------
Total non-current assets 45,818 43,281 44,291
------------------------------------- ------------- ----------------- ----------------
Inventories 19,638 17,807 17,593
Trade and other receivables 21,242 17,536 22,184
Provision for impairment (846) (901) (777)
Other financial assets 1,653 672 -
Cash and cash equivalents 14,147 7,357 7,750
Current tax assets 833 97 1,838
Total current assets 56,667 42,568 48,588
------------------------------------- ------------- ----------------- ----------------
Total assets 102,485 85,849 92,879
------------------------------------- ------------- ----------------- ----------------
Liabilities
Trade and other payables 24,864 17,061 20,936
Other financial liabilities 415 - 6
Loans and borrowings 1,697 8,548 1,595
------------------------------------- ------------- ----------------- ----------------
Total current liabilities 26,976 25,609 22,537
------------------------------------- ------------- ----------------- ----------------
Long-term borrowings 24,606 8,446 18,727
Retirement benefit liabilities 12,902 17,114 13,130
Contingent consideration on business
acquisition 922 401 578
Deferred tax liabilities 2,785 2,020 3,093
Total non-current liabilities 41,215 27,981 35,528
------------------------------------- ------------- ----------------- ----------------
Total liabilities 68,191 53,590 58,065
------------------------------------- ------------- ----------------- ----------------
Equity
------------------------------------- ------------- ----------------- ----------------
Share capital 2,389 2,389 2,389
Share premium 1,588 1,588 1,588
Translation reserve 993 505 553
Hedging reserve 1,202 655 -
Reserve for own shares (1,407) (1,151) (1,407)
Retained earnings 29,529 28,273 31,691
------------------------------------- ------------- ----------------- ----------------
Total shareholders' equity 34,294 32,259 34,814
------------------------------------- ------------- ----------------- ----------------
Total equity and liabilities 102,485 85,849 92,879
------------------------------------- ------------- ----------------- ----------------
UN-AUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
26 week period 26 week period 52 week period
to 24 September to 25 September to 26 March
2022 2021 2022
--------------------------------------------- ---------------- ---------------------------- ---------------------
GBP'000 GBP'000 GBP'000
Cash flows from operating activities
Net (loss) / profit (883) 1,550 1,358
Adjustments for:
Tax 26 363 1,419
Depreciation and amortisation 2,090 1,975 4,051
Net IAS 19 pension adjustments within
Statement of comprehensive income 304 350 914
Past service pension deficit payments (598) (717) (1,443)
Foreign exchange differences (125) (1) -
Loss on disposal of property, plant 22 - -
and equipment
Net interest expense 464 220 909
Share based payments - (96) (107) Changes in working capital: (Increase) in inventories (1,953) (2,326) (2,103) Decrease / (increase) in trade and other receivables 1,517 (1,571) (6,220) Increase in trade and other payables 3,386 1,274 5,545 Tax received/ (paid) 1,057 - (972) Net cash generated from operating activities 5,307 1,021 3,351 Cash flows from investing activities Purchase of intangible assets (86) (21) (56) Purchases of property, plant and equipment (2,274) (2,856) (6,705) Net cash used in investing activities (2,360) (2,877) (6,761 ) Cash flows from financing activities Proceeds from issue of new loans 5,189 3,321 9,754 Repayment of borrowings (123) (324) (3,123) Repayment of lease liabilities (674) (419) (1,170) Interest received 1 18 17 Interest paid (291) (156) (709) Distribution of own shares - - (256) Dividends paid to shareholders (708) - (236) Net cash generated in financing activities financingactactivitiesactivities 3,394 2,440 4,277 --------------------------------------------- ---------------- ---------------------------- --------------------- Net increase in cash and cash equivalents 6,341 584 867 Effect of exchange rate fluctuations on cash held 56 8 118 --------------------------------------------- ---------------- ---------------------------- --------------------- Net increase in cash and cash equivalents 6,397 592 985 Cash and cash equivalents at the start of the period 7,750 6,765 6,765 Cash and cash equivalents at the end of the period 14,147 7,357 7,750 --------------------------------------------- ---------------- ---------------------------- --------------------- Cash and cash equivalents consists of: Cash at bank and in hand 14,147 7,357 7,750 --------------------------------------------- ---------------- ---------------------------- ---------------------
UN-AUDITED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share Share Translation Own Hedging Retained
capital premium reserve shares Reserve earnings Total
------------------------- --------- -------- ---------------- --------- ----------- -------------- ------------
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 26 March 2022 2,389 1,588 553 (1,407) - 31,691 34,814
Comprehensive (expense)
for the period - - - - - (883) (883)
Total other comprehensive
income - - 440 - 1,202 (571) 1,071
Dividends paid - - - - - (708) (708)
Total contributions by
and
distributions to owners
of the Group - - - - - (708) (708)
------------------------- --------- -------- ---------------- --------- ----------- -------------- ------------
At 24 September 2022 2,389 1,588 993 (1,407) 1,202 29,529 34,294
------------------------- --------- -------- ---------------- --------- ----------- -------------- ------------
29,901
At 27 March 2021 2,389 1,588 504 (1,151) 501 26,070 97
Comprehensive income for
the period - - - - - 1,550 1,550
Total other comprehensive
expense - - 1 - 154 749 904
Share based payment
charge - - - - - (96) (96)
Total contributions by
and
distributions to owners
of the Group - - - - - (96) (96)
------------------------- --------- -------- ---------------- --------- ----------- -------------- ------------
At 25 September 2021 2,389 1,588 505 (1,151) 655 28,273 32,259
------------------------- --------- -------- ---------------- --------- ----------- -------------- ------------
NOTES TO THE CONDENSED CONSOLIDATED HALF YEAR 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) market of the London Stock Exchange. The condensed consolidated half year financial statements of the Company for the twenty six weeks ended 24 September 2022, which have not been audited or reviewed, comprise the Company and its subsidiaries (together referred to as the Group).
Basis of preparation
The condensed consolidated financial statements for the 26 week periods ending 24 September 2022 and 25 September 2021 are unaudited and were approved by the Directors on 14 November 2022. They do not constitute statutory accounts as defined in s434 of the Companies Act 2006. The financial statements for the year ended 26 March 2022 were prepared in accordance with UK adopted international accounting standards and have been delivered to the Registrar of Companies. The report of the auditor on those financial statements was unqualified and did not draw attention to any matters by way of emphasis of matter. The Group's financial statements consolidate the financial statements of James Cropper Plc and its subsidiaries.
Applicable standards
These unaudited consolidated interim financial statements have been prepared in accordance with international accounting standards as adopted by the UK, under the historical cost convention. They have not been prepared in accordance with IAs 34, the application of which is not required to the interim financial statements of companies trading on the Alternative Investment Market (AIM companies). The interim financial statements have been prepared in accordance with the accounting policies applied in the preparation of the Group's published consolidated financial statements 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 .
The half year financial information is presented in Sterling and all values are rounded to the nearest thousand pounds (GBP'000) except where otherwise indicated.
Going concern
The Directors, at the time of approving these interim statements, have a reasonable expectation that the Group has adequate resources to continue in operational existence for at least 12 months from this reporting date.
For the interim going concern review the Group has a 3 year plan against which a number of scenarios assess headroom against facilities and impacts on bank covenants, which showed adequate headroom and no covenant breaches.
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 half year 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, including the estimated future projections for TFP Hydrogen Ltd resulting in higher contingent consideration provisions.
3 Risks and uncertainties
The principal risks and uncertainties which may have the largest impact on performance in the second half of the year are the same as disclosed in the 2022 Annual Report on pages 24-27. The principal risks set out in the 2022 Annual Report were:
Pandemic risk; fire; flood; energy price volatility; pulp price volatility and sustainability; water abstraction; net zero emissions; pension and information security and cyber risk.
The Board considers that all principal risks and uncertainties set out in the 2022 annual report have not changed and remain relevant for the second half of the 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 items) and 'Adjusted profit before tax' (profit before tax excluding the impact of IAS 19 and exceptional items). The alternative performance measures are reconciled in note 9.
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 profit and earnings per share targets used in management incentive schemes.
5 Earnings per share
Six months Six months
ended 24 September ended 25 September Year ended
2022 2021 26 March 2022
----------------------------------- -------------------- -------------------- ----------------
(Loss) / earnings per share
- basic and diluted (9.2)p 16.2p 14.2p
(Loss) / profit for the financial
period (GBP'000) (883) 1,550 1,358
----------------------------------- -------------------- -------------------- ----------------
Weighted average number of
shares -
basic and diluted 9,554,803 9,554,803 9,554,803
6 Dividends
The proposed interim dividend of 2.0p (2021: 2.5p) per 25p ordinary share is payable on 13 January 2023 to those shareholders on the register of the Company at the close of business on 9 December 2022, with the last day for Dividend Reinvestment Plan (DRIP) elections being 20 December 2022.
7 Retirement benefit obligations
26 week period 26 week period 52 week period
ended 24 September ended 25 September ended 26 March
2022 2021 2022
--------------------------------------- ----------------------- ----------------------- -------------------
GBP'000 GBP'000 GBP'000
Obligation brought forward (13,130) (18,436) (18,436)
Expense recognised in the
income statement (568) (718) (1,570)
Contributions paid to the
schemes 862 1,085 2,099
Actuarial (losses) and gains
recognised in Other Comprehensive
Income (66) 955 4,777
--------------------------------------- ----------------------- ----------------------- -------------------
Obligation carried forward (12,902) (17,114) (13,130)
--------------------------------------- ----------------------- ----------------------- -------------------
8 Exceptional items
26 week period 26 week period 52 week period
ended 24 September ended 25 September ended 26 March
2022 2021 2022
---------------------------------- ----------------------- ----------------------- -------------------
GBP'000 GBP'000 GBP'000
Increased earn-out provisions 540 - 354
---------------------------------- ----------------------- ----------------------- -------------------
Exceptional items 540 - 354
---------------------------------- ----------------------- ----------------------- -------------------
Due to increases in future projections exceeding earlier projections estimated at 26 March 2022, additional provisions for contingent consideration are required.
9 Alternative performance measures
26 week period 26 week period 52 week period
ended 24 September ended 25 September ended 26 March
2022 2021 2022
GBP'000 GBP'000 GBP'000
Adjusted operating profit 453 2,474 4,585
Net IAS 19 pension adjustments
- current service costs (126) (164) (547)
Increased earn-out provision (540) - (354)
----------------------------------- ----------------------- ----------------------- -------------------
Operating (loss) / profit (213) 2,310 3,684
----------------------------------- ----------------------- ----------------------- -------------------
26 week period 26 week period 52 week period
ended 24 September ended 25 September ended 26 March
2022 2021 2022
GBP'000 GBP'000 GBP'000
Adjusted (loss) / profit
before tax (13) 2,263 4,045
Net IAS 19 pension adjustments
- current service
costs (390) (532) (1,203)
- future service
contributions
paid 264 368 656
- finance costs (178) (186) (367)
Increased earn-out provision (540) - (354)
----------------------------------------------- ----------------------- ----------------------- -------------------
(Loss) / profit before
tax (857) 1,913 2,777
----------------------------------------------- ----------------------- ----------------------- -------------------
10 Related parties
There have been no significant changes in the nature of related party transactions in the period ended 24 September 2022 from that disclosed in the 2022 annual report.
Statement of Directors' responsibilities
The Directors confirm that these condensed consolidated interim financial statements have not been prepared in accordance with IAS 34 as adopted by the UK and that the interim management 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 first six months and their impact on the condensed set of financial statements, and a description of the principal risks and uncertainties for the remaining six months of the financial year; and
(ii) Material related party transactions in the first six months 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
Forward-looking statements
Sections of this half-yearly 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 half-yearly 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.
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(END) Dow Jones Newswires
November 15, 2022 02:00 ET (07:00 GMT)
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