The paper and advanced materials group filed sales down 24.7% at £78.77m in the year to 27 March 2021.
Sales at its Paper division were most affected by the pandemic, falling by 32% to £51.38m. Sales at its Technical Fibre Products (TFP) wing were down 7% at £24.57m, while the fledgling Colourform (3D Products) business grew sales by 9%, to £2.82m.
The group had already flagged that trading in the second half had improved, and its year-end profits would be above previous market expectations.
Adjusted operating profit excluding exceptionals and IAS 19 pension adjustment was £4.5m, down from £7.3m the prior year.
Exceptional items of £1.5m for restructuring, and an £800,000 IAS 19 charge took the pre-tax profit figure to £1.7m (2020: £5.5m).
The restructuring programme was brought forward because of the pandemic and has seen the group switch from a matrix structure to something “closer to vertically integrated” by division.
Chairman Mark Cropper said: “I am pleased to report that in the event the year has passed as well as we might have hoped. We have managed to keep operating throughout and most importantly our workforce has stayed safe.”
Regarding the restructure, he said: “As it happened more than 90% of those leaving chose voluntary redundancy. Many had worked for James Cropper for decades and the number included our COO Dave Watson, who played a critical role in the transformation of the group since joining us in 2014. I wish to thank everyone who left for everything they have contributed over many years and their goodwill and support for a process that is never easy.”
The group said Brexit had been “successfully managed” with no lasting material impact.
“Our mantra since the earliest days of the Covid crisis has been to 'emerge stronger'. This time last year it was far from a foregone conclusion that we could. However, I can now say with some confidence that we have every chance to do so, even while the pandemic and its aftershocks are far from over,” Cropper added.
The group also held its first company-wide workshops about its future purpose and values last summer.
A new ESG (Environmental, Social & Governance) sub-committee of the board is to oversee future steps, including “a programme to deliver significant decarbonisation by 2030 and Paper's ambition to use 50% waste fibre by 2025”.
“Our growth and product development strategies are also ever more aligned with helping our customers and consumers reduce environmental impact, whether via greener papers and packaging or the advanced materials TFP has developed for a wide range of renewable energies,” Cropper stated.
James Cropper benefited from £2.9m of government support in the UK and USA. It also took out a £4m CLBILS loan, of which £3.9m was unutilised at the year-end, but which gives the business “additional cash protection should it be required in the face of continued uncertainty”.
Net debt decreased by £3.6m to £7.7m.
The group also announced that Martin Thompson, the managing director of the TFP business for the past eight years and an 18-year veteran at the group, had resigned and is set to leave in April 2022. A search for a replacement is underway.
Cropper thanked Thompson for his “significant contribution” to the business: “He has been a pleasure to work with and will leave with best wishes from all of us at James Cropper,” he said.
James Cropper’s share price rose from 1,210p to 1,250p following the news (52 week high: 1,445p, low: 781p)
Separately, Bristol’s ‘For Cup's Sake’ recycling scheme is being expanded to hospitals in the region from this month.
More than 465,000 cups have been recycled and turned into new paper by James Cropper since the scheme began in February 2020.
The firm’s CupCycling facility has the capacity to upcycle 500m cups a year.
