30 April 2024
James Cropper plc
(‘James Cropper’, the ‘Company’ or the ‘Group’)
Full Year Trading Update
FY2024 profitability expected to be slightly ahead of expectations
James Cropper PLC (AIM: CRPR), the Advanced Materials and Paper & Packaging group, is pleased to issue an unaudited trading update for the 52 week period to 30 March 2024 (“FY2024”).
For FY2024, the Board expects, subject to audit, to report revenue in line with, and profits slightly ahead of its previous expectations. The outlook for FY2025 is encouraging, with a return to growth expected across both the Advanced Materials and Paper & Packaging businesses for the full year.
Advanced Materials
The Advanced Materials business saw a year-on-year contraction in revenue, primarily reflecting the slowdown in fuel cell market demand. This was partially offset by growth in the hydrogen electrolyser business where, despite the delays to expected projects reported in January 2024, the business continued to acquire new customers through trials and specification development with electrolyser OEMs. Targeted capital investment has continued in the business to support customers, enhance efficiency, and ensure the Advanced Materials business remains well positioned to meet the expected future growth in this area.
The core (non-hydrogen) Advanced Materials business was underpinned by growth in the aerospace and automotive sectors. The focus remains on delivering growth in these sectors, as well as carbon capture, batteries and other renewables, and defence.
The mid-term outlook for both the hydrogen and the core business remains strong.
In addition, the Board is pleased to announce the appointment of a new managing director for the Advanced Materials business, who will join the Group at the end of July 2024 and be based at the Group’s main site in Burneside. The new managing director comes with over 30 years of experience in the Advanced Materials industry. An announcement containing further details will be made following notice period restrictions.
Paper & Packaging
Within the Paper & Packaging business, supply chain destocking compounded by the impact of high inflation on consumer confidence continued to be felt through the second half of the year.
Despite volume pressures, customer retention remained high as the business benefits from strong relationships at the channel, converter and end customer levels. Lower input costs (energy and carbon tax), mix improvements and productivity initiatives, as well as maintenance of strong average selling prices, are helping to protect margins.
Planned restructuring activity was completed during the third quarter of FY2024 on schedule, and work is ongoing to optimise the new operating model.
The future project pipeline is encouraging and forward indicators, such as order intake, point to early signs of market recovery throughout FY2025.
Notice of results
The Group’s audited results for FY2024 are expected to be announced in July 2024.
Finance and net debt
The Group has managed its working capital and capital expenditure robustly, both of which are lower than the previous year, resulting in a better net debt position at the period end than previously expected.
The Group has continued to operate in compliance with its banking covenants throughout FY2024. Following the challenging trading conditions reported in the second half of FY2024, it is currently seeking temporary covenant adjustments on its UK banking facility to ensure sufficient headroom is retained. Discussions with banks have commenced and a further update will be provided in due course.
Steve Adams, CEO of James Cropper, said:
“I am pleased with the response from our whole organisation to the challenging trading environment over the second half of the year.
“Our priority has been a relentless focus on business development, leveraging our strong product and technology offer. We have addressed the drop in volumes by protecting our pricing, delivering continuous improvement in all our operations, driving down input costs and maintaining tight cost control.
“The Advanced Materials business has continued to strengthen its technological leadership whilst maintaining strong customer relationships, as well as building world class partnerships and identifying future accelerated growth opportunities.
“The Paper & Packaging business continues its focus on driving value growth through operational effectiveness and building on its strong brand and capability leadership in luxury packaging.
“As a Group, we have remained steadfast in focusing on our strategy for accelerated growth and the Board is confident that the growth prospects of the Group, as a whole, remain significant in the coming years.”
| Enquiries:James Cropper plcAndrew Goody, CFOStephen Adams, CEOTel: +44 (0)1539 818 202 |