James Cropper plc (AIM: CRPR), a global market leader in advanced materials, luxury packaging and paper products, announces its results for the six months ended 30 September 2023
James Cropper plc
(“James Cropper”, the “Company” or the “Group”)
Interim Results
Accelerated growth strategy on track
Financial and operational performance drives gross margin expansion and increased profitability in the Group
James Cropper plc (AIM: CRPR), a global market leader in advanced materials, luxury packaging and paper products, announces its results for the six months ended 30 September 2023 (‘H1 FY24’).
Financial Headlines:
· Group revenue broadly in line with the Board’s FY24 expectations despite ongoing market headwinds in Paper Products
· Adjusted operating profit increased to £3.0m (H1 FY23: £0.5m) with gross margin performance and cost management improvement
· Profit before tax up to £2.4m (H1 FY23: loss £(0.9)m) supported by improved margins, a reduction in IAS 19 pension adjustments and exceptional items
· Earnings per share up to 19.4p (H1 FY23: loss per share (9.2)p)
· Interim dividend declared at 3.0p per share (H1 FY23: 2.0p), reflecting the Board’s confidence in the ongoing implementation of the accelerated growth strategy
· Net debt of £13.3m, down £3.3m from £16.6m at FY23 (H1 FY23: £12.2m).
Operational Headlines:
· Accelerated growth strategy on track with progress achieved during the period under review
· Continued progress made as the Group unifies its business identity under the James Cropper name, with launch ready for Q4 FY24
· Solid performance in Advanced Materials division;
§ Future Energy’s hydrogen offer continues to exceed management’s expectations
§ Technical Fibres remains healthy with growth in core customer base
· Restructuring and consolidation of Paper and Colourform is progressing well
· New leadership team in place across market-facing segments as well as at a Group level
· Decarbonisation project advancing to phase one construction, supported by grant funding
· Luxury Packaging wins internationally acclaimed Formes de Luxe award
Future Outlook:
· Continued growth in Advanced Materials division:
§ Ongoing investment for expansion in the electrolyser manufacturing operations
§ Opportunity pipeline and exploration into new growth markets such as Carbon Capture and Electrolyser OEM
· Ongoing progress in Paper Products division:
§ Restructuring due to complete in Q4 FY24, delivering further margin improvement
§ Share in target markets maintained and well positioned for anticipated recovery in global demand during FY25.
· The actions taken to date give the Board confidence that the Group is well positioned to deliver increased profitability in FY24 consistent with its expectations and that, in line with the accelerated growth strategy, revenue growth will be delivered from FY25 onwards.
Commenting on the half year results, 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.
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.”