James Cropper, a Kendal-based advanced materials and paper and packaging group, has reported a positive start to its new financial year, following disappointing full-year results last July. In a trading update for the 18-week period ending July 27, 2024, the company indicated signs of recovery from the difficult market conditions experienced in the latter half of its financial year 2024.
The group’s performance has aligned with the board’s expectations, albeit slightly below the previous year’s performance, which had seen particularly strong revenues in the Advanced Materials sector, especially in fuel cells. Despite this, new sales opportunities in the Advanced Materials business remain robust. There is ongoing investment in the hydrogen electrolyser business to expand capacity and meet anticipated demand.
The luxury packaging market continues to experience softness. However, the Paper & Packaging division has shown signs of recovery, with the business securing several new key contracts. The board expressed confidence in the mid-term prospects of both the Advanced Materials and Paper & Packaging divisions, maintaining their full-year expectations.
Steve Adams, Chief Executive Officer, noted, “We have made a positive start to the financial year across both Advanced Materials and Paper & Packaging, with revenue run-rates and profitability improving against the performance seen during difficult market conditions in the second half of FY24. We continue to focus on adding value for our customers and remain resolute in the delivery of our accelerated growth strategy.”
The group had revealed in July that a challenging second half led to a full-year loss, compounded by sluggish market conditions. The annual results for the year ending March 30, 2024, showed a drop in revenues by 21% to £102.968 million, and a pre-tax loss of £5.261 million, compared to a pre-tax profit of £1.313 million the previous year. The group faced exceptional costs of £5.3 million, including £2.3 million in restructuring costs and a £4.4 million non-cash asset impairment charge, partly offset by a £1.4 million credit from the settlement of a pensions-related legal claim.
Moreover, given the financial strain, no final dividend was proposed, resulting in a total dividend for the year of 3p per share, down from 6p per share in 2023. Despite progress in its repositioning strategy, the group’s promising growth opportunities, particularly in hydrogen and fuel cells, have been slower to materialise than expected due to delayed market growth.
Overall, while James Cropper navigates through market challenges, its strategic investments and recovery signs offer a relatively optimistic outlook for the mid-term prospects of its Advanced Materials and Paper & Packaging divisions.