James Cropper is looking ahead to a positive financial year thanks to a “promising” first quarter that follows a year in which pre-tax profits were halved.
In a trading update following the paper manufacturer’s AGM yesterday (31 July), it was indicated that the company had traded profitably for Q1 of its 2019/20 financial year, which started on 31 March. Sales for the quarter were up 4% year-on-year for the quarter.
This follows a tough 2018/19 period in which record sales of £101.1m were reported, but pre-tax profit had fallen from £4.5m to £2.6m. This was attributed to pulp prices, which had outstripped market expectations for the second year in a row and increased cost pressures.
Chair Mark Cropper indicated that pulp prices had “softened” somewhat in Q1 and James Cropper’s Paper division had been buoyed by recent price increases and a focus on higher-value niche markets such as luxury packaging.
Looking to the other segments of the group, Cropper said the commercialisation of the Colourform plastic-free packaging division remained “on-track”, with hopes that an increasing book order will continue to build over the year.
The groups’ Technical Fibre Products (TFP) division was said to be benefiting from a continued focus on the defence, industrial and fuel cell markets.
“Overall, the outlook for the group remains in line with management expectations,” Cropper said. “TFP will continue to utilise available manufacturing capacity to accelerate sales and will be increasing capacity by an additional 50% by end 2020 to meet future demand.
“Paper will continue to focus on high value segments and provide increased independence from pulp price with the expanded use of recycled content such as CupCycling.
“Colourform will be focused on continued growth of the sales pipeline.”
He concluded: “I am pleased with the progress we are making and confident the group will perform in line with the board's expectations for the year.”
A publicly traded company, James Cropper’s share price stands at 1,178p at the time of writing, down 2.64% from 1,211p before the AGM yesterday.