Profit pain for paper maker Cropper

NORTH West paper maker James Cropper today revealed a fall in profits but said it is well placed to capitalise on an upturn in the economy.

The Kendal-based group’s speciality papers business dived into the red with an operating loss of £310,000 compared to a profit of £1.3m last time following a slide in UK sales.

Turnover in the division rose by 3% to £49.8m, while energy and raw material costs soared 13% to £3.4m.

Chairman James Cropper said the division has made significant progress in reducing its first half losses, and despite uncertainties surrounding the forward trend in exchange rates, quoted energy prices and pulp costs, speciality papers is expected to continue in its recovery.

Overall, in the year to March 28, pre-tax profits at the group fell from £1.6m to £858,000, while turnover nudged up from £72.7m to £74.8m.

The group’s technical fibre products business saw a record 47% hike in operating profit to £2.1m, with turnover rising 15% to £11.6m.

Mr Cropper said the division’s strong performance it expected to continue as it is seeing increasing demand from aerospace, security and fuel cell markets.

He added that sales of technical fibres in the first half of the new financial year will be depressed as a consequence of re-structuring at a major customer, but it is anticipated that strong growth will resume in the second half.

Turnover at the group’s Paper Mill Shop fell 9% to £5.6m, however a growth in internet sales and a rationalisation of overheads resulted in losses remaining at £388,000 in line with the previous year.

Mr Cropper added: “The downturn in the global economy creates a challenging trading climate for the group.

“Nevertheless, I am confident that in the short-term our existing management approach will enable the group to capitalise on opportunities when the economic climate becomes more favourable thus leading to significant growth in the medium to long-term.”