James Cropper posts improved half-year profits

By Max Goldbart, Tuesday 14 November 2017

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James Cropper has posted improved interim results in the face of rising costs.

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Adjusted operating profit and pre-tax profit both experienced double-digit growth

In its half-year results to 30 September 2017, the group posted revenues of £47.4m, a 4.4% increase on last year’s figure of £45.4m.

Adjusted operating profit excluding the impact of its IAS 19 pension adjustments and exceptional costs was up 15.4% to £3m (2016: £2.6m), adjusted pre-tax profit rose 16.7%, from £2.4m to £2.8m and earnings per share were also up sharply to 23.1p. Net borrowing also fell, down 28.8%, from £6.6m to £4.7m. 

In its annual results published in the summer, the group hailed a "watershed" year for sales and profits. 

For its James Cropper Paper (JCP) division, which comprises the majority of its sales, revenues were flat at £35.3m. Chairman Mark Cropper said that a small downturn in UK sales had been offset by new US contracts in digital and packaging. He said that profit growth for the full year would be challenging when faced with rising pulp prices and downward pressures on margins. PrintWeek reported recently on the year’s third major paper price rise. 

JCP has also recently launched CupCycling, a closed-loop system that recycles consumer coffee cups. The technology is being utilised by GF Smith for its new Extract range and Selfridges for a new range of luxury bags. 

After heavy investment last year, revenues for James Cropper’s Technical Fibre Products (TFP) division were up 19.8%, from £10.1m to £12.1m, hailed by Cropper as its best ever half-year performance with continued growth expected. Double-digit growth was experienced in the aerospace, defence and fuel cell markets. 

In its newly developed 3D Products (3DP) division, including its Colourform recyclable moulded fibre packaging product, revenues were at £43,000. It is aiming for a sharply improved performance in its 3DP full-year results, with production lines currently fulfilling a number of commercial contracts and also a number of larger projects “in the development pipeline".

“3DP is still at an early stage but its potential is being proven with commercial contracts and increasing interest in the sustainable and aesthetically superior alternative it offers over plastic packaging,” said Cropper. 

After ballooning last year, the group’s IAS 19 pension deficit fell slightly to £18m, compared with £18.8m in April 2017, with net pension deficit at £14.7m after deferred tax, down 18.5% on the same period last year. It operates three pension schemes with close to 60% of employees holding a defined contribution personal payment plan and two funded pension schemes providing defined benefits, for what it said was a decreasing number of its employees.

Cropper finished: “Within the group we continue to invest significantly in people, markets, innovation and equipment. This will ensure that over the long term the group has the potential to sustain growth across all its businesses.

“In the nearer term, the full year is expected to deliver in line with the board's expectations.”

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