James Cropper more positive following previous second half disappointment
Kendal-based advanced materials and paper and packaging group, James Cropper, said it has made a positive start to its new financial year, after delivering worse than expected full year results in July this year.
The business issued a trading update for the 18-week period to July 27, 2024, ahead of its annual general meeting later this morning (September 4).
It said its performance, so far, indicates a recovery from the “challenging market conditions” experienced in the second half of its 2024 financial year.
Trading is in line with the board’s expectations, albeit behind the performance seen over the same period last year where Advanced Materials fuel cell revenue was particularly strong.
New sales opportunities in the Advanced Materials business remain strong, where investment continues to be made in the hydrogen electrolyser business to build capacity to meet anticipated demand.
While the luxury packaging market remains soft, order intake levels in Paper & Packaging point to continuing recovery over the current financial year, where the business has secured some new key contracts, it revealed.
The board said it remains confident in the mid-term prospects of both the Advanced Materials and Paper & Packaging business, and its full year expectations remain unchanged.
Chief executive, Steve Adams, said: “We have made a positive start to the financial year across both Advanced Materials and Paper & Packaging, with revenue run-rates and profitability improving against the performance seen during difficult market conditions in the second half of FY24.
“We continue to focus on adding value for our customers and remain resolute in the delivery of our accelerated growth strategy under our recently repositioned James Cropper branding.”
The group said a tough second half to its 2024 financial year dragged it into a full year loss due to sluggish markets, when it unveiled its annual results in July.
In an April trading update it had forecast it would see annual profits “slightly ahead” of previous expectations.
However, its annual results for the year to March 30, 2024, which was a week shorter than the previous reporting period, revealed revenues had plummeted by 21% to £102.968m, while a pre-tax loss of £5.261m was in comparison with a pre-tax profit of £1.313m a year ago.
The group incurred exceptional costs of £5.3m, including restructuring costs in the paper and packaging business of £2.3m and a non-cash asset impairment charge of £4.4m, partly offset by £1.4m credit from settlement of a pensions-related legal claim.
No final dividend was proposed, resulting in a total dividend for the year of 3p per share, against 6p per share in 2023.
The group said that, despite progress in its repositioning strategy, some of its most promising growth opportunities, not least those in hydrogen and fuel cells, were taking longer to bear fruit than previously expected, due to delayed market growth.
