| 24 August 2023 | |
James Cropper plc
(‘James Cropper’, the ‘Company’ or the ‘Group’)
Full Year Results
Transformational Year with Good Progress Achieved
James Cropper plc (AIM: CRPR), a global market leader in advanced materials, luxury packaging and paper products, today announces its results for the year ended 1 April 2023.
Headlines:
Financial
· Strong recovery in a transformational year, with a 24% increase in revenue to £129.7m (2022: £104.9m) driven by high demand and retained contracts
· Despite the significant inflationary cost headwinds, adjusted operating profit increased 4% to £4.8m (APM1*) (2022: £4.6m)
· £3.2m adjusted profit before tax, 21% lower (2022: £4.0m) (APM2**) due to an increase in net finance costs
· Exceptional costs of £1.1m which reflects outperformance at TFP Hydrogen and consequent reassessment of the value of contingent consideration (2022: £0.4m)
· Profit before tax of £1.3m, 53% lower (2022: £2.8m) due to an increase in net finance costs and exceptional costs
· Net debt of £16.6m up 35% (2022: £12.3m)
· Earnings per share 5.4p down 62% (2022: 14.2p)
· Full year dividend proposal 6.0p per share in line with expectations (2022: 10.0p)
*APM1 “Adjusted operating profit” refers to operating profit before interest and prior to the impact of IAS 19
and exceptional items
**APM2 “Adjusted profit before tax” refers to profit before tax prior to the impact of IAS 19 and exceptional items
Operational
· Strong global pipeline in Future Energy sector
· TFP Hydrogen exceeded our expectations
· Well advanced in the transformation of the Paper division post year end
· Significantly tighter scope around decarbonisation project: 40% lower capital investment requirement
· Ongoing energy saving actions contributed to 8% annualised reduction in site fuel consumption
· Strengthened the Board and Executive leadership team
· Strengthened broader organisational leadership to drive strategy
Outlook
· Future Energy and Luxury Packaging to deliver high market growth and value, respectively
· Integration of Colourform with Paper to drive a unique and compelling Luxury Packaging proposition
· Consolidation across the organisation and estate to reduce costs and improve efficiency
· Streamlined Paper Product offer to drive margin improvements and productivity
· Continued technological leaders in recycled content and responsible sourcing
· Strengthen our sector leadership in carbon reduction
· Sharper focus with better clarity and assessment of our climate risks
· Strong leadership team to reposition James Cropper
· Drive brand value, recognition and preference in each market focused segment
Commenting on the full year results, James Cropper CEO Steve Adams said:
“We achieved a good performance for the year with 24% revenue growth in spite of unprecedented market headwinds. In FY2023, significant progress was made in repositioning James Cropper to capitalise on growth opportunities within its core and emerging end-markets, such as the fast-growing renewable energy and decarbonisation markets which are in need of novel high-performance materials and sustainable fibres.
We will aim to drive increased value for our shareholders through accelerated growth in each of our market focused segments; Creative Papers, Luxury Packaging, Technical Fibres and Future Energy by leveraging our potential as one Company under the James Cropper name.
I am excited by the many opportunities and have confidence in our strategy to accelerate growth and in our exceptional team worldwide to make a real difference. The foundations are in place to create a greater global presence for James Cropper, by repositioning ourselves to better serve our existing and target customers.”
Enquiries:
| James Cropper plcRosina MerrettMob: +44 (0) 7500 083559rosina.merrett@cropper.com Shore Capital – NOMAD and BrokerRobert Finlay, Henry Willcocks, Lucy BowdenTel: +44 (0) 207601 6100 Buchanan Communications – Financial PRChris Lane, Charles Ryland, Jamie Hooper, Verity Parkerjamescropper@buchanancomms.co.ukTel: +44 (0) 207 466 5000 |
Notes for editors:
James Cropper is a market leader in advanced materials and paper products. Led by the Cropper family for six generations, the business has an international workforce and an operational reach in over 50 countries.
Established in 1845, the Group manufactures paper, packaging and advanced materials incorporating pioneering non-wovens and electrochemical coatings.
James Cropper is a specialist provider of niche solutions tailored to a unique customer specification, ranging from substrates and components in hydrogen electrolysis and fuel cells to bespoke colours and textures in paper and moulded fibre packaging designed to replace single use plastics.
The Group operates across multiple markets from luxury retail to renewable energy. It is renowned globally for service, capability, pioneering and multi award-winning commitment to the highest standards of sustainability.
James Cropper’s goal is to be operationally carbon neutral by 2030 and to reduce carbon through its entire supply chain to net zero by 2050.
Chairman’s Letter
Dear Shareholders
As I look back over the last year what stands out is less the circumstances, which were challenging as ever in some quarters, but more the broad range of positive actions we have taken to reposition the Company over this period. These actions have strengthened our foundations for sustained growth in every corner.
I must thank all our customers for their support in the year. Even then, at times it was challenging to keep up with the inflationary environment.
The resulting impact was lessened by outperformance in Technical Fibre Products and its Hydrogen business unit. Overall, however, significant credit is due to our workforce who addressed the unfolding situation with exceptional urgency and dedication.
Adapting to circumstance always leads to change and accordingly within the year we have comprehensively reviewed our growth plans and the foundations required to ensure we maximise opportunities and minimise risks as these roll forwards.
This has enabled us to bring to life our strategy in realigning the business to be centred around our customers.
Our products and markets will remain broadly the same, but we will start the journey to reposition ourselves operating as one Company. To move from three separate divisions (James Cropper Paper, Technical Fibre Products and Colourform™) into four market-facing segments, all unified under the Group name, James Cropper:
· Creative Papers
· Luxury Packaging
· Technical Fibres
· Future Energy
My greatest desire for James Cropper is that while we remain proud of our great heritage, we always feel young, and achieve this balance by seamlessly combining generations of know-how with a relentless appetite for renewal.
The reorganisation truly encapsulates this blend from our historic roots in papermaking to cutting edge materials and components in renewable energy.
Importantly, across this range it is no longer accurate to refer to us as a paper-mill or paper business, as has been the norm since our outset in 1845. Today, James Cropper is successfully transitioning to an advanced materials and paper products group across everything it does, committed to pioneering innovation in traditional markets alongside breakthrough areas.
We are determined to stay modern and relevant, which will lead us to spend more over the coming years as we invest in our processes and systems. This will enable smarter access to data, leaner working practices and cost savings.
In the same vein, we will also look to invest further in innovation to meet the anticipated demands of future markets and customers, whether technical, environmental or economic.
We have ambitious plans to decarbonise the Group’s operations, the first phase will be to cut natural gas use by 25% by 2025, keeping us on track to achieve net zero across our entire supply chain by 2050. This includes novel approaches to heat generation that we hope can blaze the way for other energy intensive manufacturers.
We are also investing to enhance our position in hydrogen electrolysis, fuel cells, carbon capture and other fast-growing markets. The growth potential is significant, but we will only earn a share through step changes in performance and cost reduction. This will involve both technology advances and operational investments. For example, we have recently commissioned a hydrogen component line in the United States, taking production closer to a large share of our customer base whilst at the same time cutting freight and duty costs.
Our paper and packaging partnerships within luxury and premium retail sectors remain strong, whether designing new tailor-made papers or Colourform™ products or offering customers more sustainable options and recycled fibres.
On this note, we are proud to have been involved in the recent creation of the first-ever 100% plastic-free remembrance poppy for the British Legion, whom we have proudly partnered with since 1978.
We have also launched our FibreBlend Upcycled Technology programme, offering a choice of different recovered fibre categories. This builds on our award-winning CupCycling proposition which gives used coffee cups a second life as a valuable fibre source for high quality paper. At present, over 75% of our custom-made paper products contain a blended fibre source. Our plans in this area include developing a unique technique to separate cotton, recyclable into paper, from artificial fibres.
Dividend
In financial terms, the Group reported a profit before tax of £1.3m for the period ended 1 April 2023. This was down by 53% versus the prior period with the Group revenue rising by 24% split between Paper (+25%), Colourform™ (+29%) and Technical Fibre Products (+19%).
In line with expectations, the Board is proposing a final dividend of 4.0 pence per share, making a total dividend for the year of 6.0 pence per share.
Board changes
This year has seen several changes to our leadership team. In August 2022, Steve Adams was appointed CEO, following the departure of Phil Wild.
Since the year end, we have also seen the departure of Isabelle Maddock, our CFO, who resigned in June 2023. I would like to personally thank both Phil and Isabelle for their dedicated service to James Cropper.
Transitioning to a brighter future
As ever, James Cropper continues to earn its future by building a diversified business across multiple markets and geographies and by adapting with pace, when required. I am very conscious that this has included the hard choice to restructure our Paper division from four machines to three with associated headcount reductions.
The decision was not taken lightly but has been essential to address years of headwinds and margin pressures and create a more resilient, profitable business.
Overall, we are blessed with a talented team and a range of materials and products that have never been more relevant in a world that rapidly needs to learn to live in greater balance with nature. Common to all our activities is the opportunity to accelerate the transition to greener economies and societies, and grow a vibrant group around this. I am hopeful these actions will position us better than ever to truly deliver on this.
Everyone in the Company is playing a part in this journey and I would like to thank all who work for us and with us for their continued commitment to James Cropper.
Mark Cropper
Chairman
23 August 2023