In an update relating to the six month period ended 30 September 2023 released this morning (9 November), the Cumbrian paper maker said its adjusted operating profit increased to £3m, compared to £0.5m at the same stage a year ago, with gross margin performance and cost management improvement.

Pre-tax profit was up to £2.4m, compared to a pre-tax loss of £0.9m a year ago, supported by improved margins, a reduction in IAS 19 pension adjustments and exceptional items.

Net debt of £13.3m in the first half of FY24 was down £3.3m from the £16.6m figure for FY23 as a whole. At H1 FY23 it stood at £12.2m.

The group said its accelerated growth strategy is on track, and it has made continued progress as it unifies its business identity under the James Cropper name, with launch ready for Q4 of FY24.

It has seen a solid performance in its Advanced Materials division; with Future Energy’s hydrogen offer continuing to exceed management’s expectations, and Technical Fibres remaining healthy, with growth in its core customer base. The restructuring and consolidation of Paper and Colourform is also progressing well, the group said.

There is a new leadership team in place across market-facing segments as well as at a group level; and the group’s decarbonisation project is advancing to phase one construction, supported by grant funding.

Looking ahead, James Cropper said it is expecting to see continued growth in its Advanced Materials division, with ongoing investment for expansion in the electrolyser manufacturing operations and an opportunity pipeline and exploration into new growth markets such as carbon capture and electrolyser OEM.

Meanwhile, restructuring in its Paper Products division is due to complete in Q4 FY24, delivering further margin improvement. The group said its share in target markets has been maintained and it is well positioned for anticipated recovery in global demand during FY25.

The group said the actions taken to date give the board confidence that it is well positioned to deliver increased profitability in FY24 consistent with its expectations and, in line with the accelerated growth strategy, it said revenue growth will be delivered from FY25 onwards.

James Cropper CEO Steve Adams said: “We have achieved a healthy first half performance with benefits from our accelerated growth strategy now becoming evident, following considerable hard work and commitment by the James Cropper team.

“In spite of ongoing wider macro-economic pressures and softer demand across Paper, the actions taken to streamline the business and focus on higher margin opportunities have helped deliver an improvement in profitability. Advanced Materials continues to perform well with Future Energy again exceeding expectations.

“The continued focus on our unique recovered fibre upcycling capability, moulded fibre luxury packaging offer and pioneering activities in decarbonisation keep us differentiated and relevant with our current and future customers.

“Our access to the high growth Future Energy markets with an equally differentiated product and technology offer in Advanced Materials, brings significant opportunity for further growth. We are committed to ongoing investment in our capabilities and capacity with a new phase of expansion in our electrolyser manufacturing operations.

“We have also built significant strength in our talent and leadership over the last year and will complement this with more agile systems and processes.

“With the new leadership team, and our talented global workforce, we are well positioned for greater success; from redefining our Paper Products offer to satisfying global demand for a low carbon economy through cutting edge materials and components in renewable energy.”

The company’s earnings per share was 19.4p, compared to a loss per share of 9.2p at the same stage a year ago.

It has declared an interim dividend at 3p per share, compared to a 2p per share interim dividend at the same stage last year, which the board said reflected its confidence in the ongoing implementation of the accelerated growth strategy.

Its share price was down by 3.12% to 746p in early trading this morning (52-week high: 975p, low: 560p).

Cropper added: “While still in the midst of our transformation, we are confident in the future prospects of the business which is reflected in the increase in interim dividend and I look forward to achieving further value for our shareholders as we start the journey to reposition ourselves as one company, unified under the group name, James Cropper.”