The Cumbria-based James Cropper group faced a tough second half of the fiscal year. The company revealed a full-year loss, with market conditions being sluggish. The group’s pre-tax loss stood at £5.261 million, a significant downturn from a pre-tax profit of £1.313 million the previous year.
Furthermore, restructuring costs and exceptional charges heavily impacted the company’s finances. The total amount reached £5.3 million, with notable costs in restructuring the paper and packaging business and non-cash asset impairments. This situation led to a reduction in total annual dividends to 3p per share, a significant drop from 6p per share in 2022. Delays in growth opportunities, especially in the hydrogen and fuel cell markets, added to the challenges.
Challenges in the Second Half
The second half of the fiscal year proved challenging for the Cumbria-based James Cropper group. The company reported a full-year loss due to sluggish market conditions, recording a 21% decline in revenues. The group’s pre-tax loss was £5.261 million, a sharp contrast to its £1.313 million pre-tax profit the previous year.
Restructuring Costs and Exceptional Charges
James Cropper faced substantial restructuring costs and exceptional charges, amounting to £5.3 million. These costs included £2.3 million for restructuring the paper and packaging business and a £4.4 million non-cash asset impairment charge. The group managed to offset some of these costs with a £1.4 million credit from a pensions-related legal claim.
Impact on Dividends
Due to the challenging market conditions and associated costs, the company has proposed no final dividend for the year. This results in a total annual dividend of 3p per share, halved from 6p per share in 2023. This move underscores the financial strain the company has faced over the last fiscal year.
Delayed Growth in Key Markets
Despite progress in its repositioning strategy, James Cropper noted delays in growth opportunities, especially in the hydrogen and fuel cell markets. The slower-than-expected market growth in these sectors has impacted the company’s revenue projections. This slowdown was attributed to sluggish demand for hydrogen-powered passenger cars.
Electrolyser Business and Infrastructure Delays
Although there was growth in the electrolyser business, it was below the board’s expectations. Delays in significant infrastructure projects have hampered progress. The company had initially expected higher demand, but this has been pushed back due to various external factors affecting project timelines.
Future Market Focus
Looking ahead, James Cropper is increasingly focusing on markets with strong growth trends like clean energy, lightweighting, and sustainability. The restructuring has led to a more efficient operating model in the paper and packaging business. Strong customer relationships and lower input costs have supported pricing resilience and improved margins.
Executive Leadership and Strategic Focus
The company has applied rigorous capital investment, cost, and cash disciplines across its operations. A refreshed executive leadership team is now in place, aimed at driving the company’s growth strategy. Current trading for the fiscal year 2025 is in line with expectations, although input costs remain high.
Opportunities in Advanced Materials
James Cropper sees a strong pipeline of opportunities in advanced materials. Despite slower end-market growth in hydrogen fuel cells in 2024, the mid-term outlook for energy and composite solutions is positive. The company is optimistic about the potential for recovery and growth in the paper and packaging business.
CEO’s Perspective
CEO Steve Adams highlighted the company’s efforts to protect prices and margins despite difficult market conditions. He praised the team for concluding significant restructuring and adopting a new continuous running operating model. Adams expressed pride in the team’s commitment and focus on innovation and customer service.
Future Outlook
The company aims to capitalise on national government funding and support programmes for green hydrogen. Early signs of recovery in order intake levels for the paper and packaging business are encouraging. The new operating model is already delivering improved margins, setting a strong foundation for the future.
James Cropper faced a difficult fiscal year, marked by sluggish market conditions and significant restructuring costs. Their strategic repositioning efforts and focus on new growth markets demonstrate resilience. The company’s future outlook remains cautiously optimistic, with a strong emphasis on clean energy and sustainability sectors. Early recovery signs in paper and packaging offer some hope for the next fiscal year.