Costs and retail losses hinder James Cropper
NORTH West paper manufacturer James Cropper has benefited from stronger exports but higher costs and its loss-making retail arm hit profits.
The Kendal-based firm said group turnover rose 14% to £86.8m in the year to April 2 with a 19% rise in export sales which represented half of all turnover.
The company made a pre-tax trading profit of £1.6m, down from £3.5m last time.
Its technical fibre products – used in sectors such as energy and electronics – did well, nearly doubling profits to £2.2m thanks to a 37% increase in US sales, but earnings from speciality papers fell from £3.4m to £587,000 due to higher costs, despite a 16% increase in sales.
The 15-outlet Paper Mill Shop retail business – which was closed in January after four years of losses – made a loss of £1.7m, including the costs of winding up the business.
By reducing future service benefits the company has slashed its pension liability from £12.7m to £1.4m. Due to accounting rules it has put this saving on its profit and loss account giving the group a pre-tax profit of £11m.
Chairman Mark Cropper said: “Demand for our products is growing. We have a strong competitive position, underpinned by the sale of service and capability as much as materials. We are more committed than ever to developing the skills of our people and the results of investment in this area are beginning to be felt. We are carefully recruiting to strengthen teams when the need is demonstrable. Although challenges lie ahead I am confident that our business prospects are bright.”
