Lake District paper specialist preparing for post-pandemic growth
James Cropper, the Kendal-based paper firm, accelerated its restructuring plans due to the coronavirus pandemic and said today that it expects to emerge a stronger and fitter business focused on further growth.
Announcing its half year results to September 26, today, it revealed a 36% fall in revenues, to £34m, while last year’s £2m pre-tax profit was wiped out.
However, net borrowings were reduced from £15.3m to £5.2m.
Restructuring costs are estimated at £200,000, but the firm said it expects to make £2m savings per year, thereafter.
The company has liquidity of more than £14m, including cash and available overdraft facilities, and it said capital investments for future growth will restart in the second half of the year.
However, to protect liquidity, no interim dividend has been declared.
Payment of the bonuses earned from last year’s record results have been deferred until the second half of the year, and no bonuses or annual incremental pay increases will be implemented in the current year.
The group said it has weathered the initial impact of the pandemic, despite all divisions in the business being impacted to varying degrees.
And while markets are improving it is too early to say whether the group may be affected by further lockdowns.
The restructuring plans mainly affected the paper and group operations divisions and are now, mostly, completed, impacting less than 10% of the firm’s staff.
Chairman, Mark Cropper, said: “Each division is seeing signs of recovery with most markets trending back to normality.
“The restructuring plans are nearing completion with a small net cost anticipated for the year but anticipated savings of £2m pa in future years.
“The restructuring has affected less than 10% of the workforce but will result in a leaner, stronger group. Capital investment was suspended during the first half of the year and is planned to resume in the second half.”
He added: “The group has weathered a major challenge during the period.
“The actions of our employees to meet and overcome the challenge has been exceptional across the group. I am proud of their actions and commitment, as ever, and would like to thank them all for their continued efforts to protect themselves, their fellow employees and the business as we plan to come out of this pandemic a stronger, fitter group and continue our plans for growth.”