Walker Greenbank and James Cropper count cost of Storm Desmond
Wednesday, December 16, 2015
Fabric printer Walker Greenbank has issued a profit warning after suffering “substantial flooding” during Storm Desmond.
The 200-staff company’s Standfast & Barracks fabric printing site on the river Lune suffered “substantial flooding” and electricity cuts after the storm hit last weekend.
The company has now warned of a likely 15% drop in pre-tax profits before exceptional items in the current financial year to 31 January, compared to previous forecasts.
Trading in the following financial year will also be impacted until full printing capacity is restored, it said, but this will be on a phased basis, with digital being the first to come back online. It is expected to take until the end of April for the majority of capacity, which includes traditional rotary and flatbed processes, to resume.
It is also in the process of outsourcing some fabric printing in the short term.
The site prints wallpaper and fabric for high end consumers and corporate buyers. Brands include Sanderson, Morris & Co, Harlequin, Zoffany, Scion and Anthology.
Walker Greenback has appointed a project manager and specialist contractors to bring the factory back into normal production as soon as possible, although it said it was still early on in its assessment of the damage to printing machinery, stock and other business assets.
“Management's current best advice is that digital printing will be restored in the early part of 2016 and that other printing processes will resume sequentially with the intended result that the majority of printing capacity will be back on stream by the end of April 2016,” the company said in a statement.
It added that it expected to recover the profits shortfall in full from its insurers in due course.
Meanwhile Cumbrian papermaker James Cropper is back in production following a week of cleaning up after the storm. The company has said utilities have been fully restored to the majority of the Burneside operation.
However it expects to report a £1m one-off exceptional cost relating to Storm Desmond in its financial results in the year to 2 April 2016, once excess limits on the relevant insurance policies are taken into account.
It said that the deployment of emergency procedures minimised the disruption.
Production of paper products resumed fully last week and TFP production has been partly restored with full resumption expected in early January, it added.
Chief executive Phil Wild said he was delighted so much of the operations have been able to restart so quickly.
“This is testament to the preventative procedures and the outstanding commitment of our staff, who have put in so much effort over the last week and to whom I am most grateful," he said.
The company makes Colorplan for GF Smith. Gf Smith joint managing director James Haslam said he did not expect any disruption to supplies.
“Everything’s fine. We’ve met with James Cropper and everything is under control,” he said.
“They’ve worked around the clock to get everything back up and running."
Aside exceptionals item, the board expects the company's performance for the year to 2nd April 2016 to reflect its expectations as they were prior to the storm.
Lancaster based Pagefast Print & Publishing, which had almost all its machinery and £9,000 worth of completed work ready for dispatch ruined by the flood, faces a long process of insurance assesments, claims and plant replacement before production can begin again and has engaged a loss assessor to assist with what is likely to be a six-figure claim.
It is outsourcing its work to Kent Valley Colour Printers and MTP Media in Kendal and ECM Print Finishers in Preston meanwhile.
Managing director Keith Simpson said: "Between them we're holding everything together. All our customers have been great. They keep bringing in cakes and biscuits for us. The press guys have cleaned up as much as they can and we've sent 20 tonnes of wet paper to recycling. The insurers have sent a scientist in to look at our machines.
"We've been very straight with our customers and by and large they are working with us. We've yet to see any money or any offer but the staff have been absolutely first class. I've been assured that our business interruption insurance will allow me to keep paying them. Our landlord has also been great."
Accountancy firm PricewaterhouseCoopers has estimated the cost of Storm Desmond damage will be £500m.