TIDMCRPR
RNS Number : 6765F
Cropper(James) PLC
23 March 2022
23(rd) March 2022
Trading Update
James Cropper plc (AIM: CRPR)
James Cropper plc ('CRPR' or the 'Group'), the leading advanced
materials and paper products group, today issues an update on
trading and the impact of worldwide wholesale gas price rises.
As previously announced, the Group has experienced strong demand
throughout the year and across all divisions, with over 30% sales
growth in the current year to 26(th) March 2022, which is ahead of
previous market expectations.
However, as a direct result of the wholesale gas price increases
impacting Q4 and subsequently, the profitability of the Paper
division, our expectations for the full year will be for adjusted*
PBT for the Group of GBP3.5M (FY2021: GBP1.1M) against previous
market expectations of adjusted* PBT of GBP4.9M.
While the situation in Ukraine has resulted in uncertainty
concerning the Paper division's input costs in the short term, the
long term opportunity for the Group remains positive, and we are
encouraged by our ability to flex pricing to respond to rising
input costs. Building on a strong track record of growth, the year
is expected to deliver a new sales high across the Group. We
continue to maintain a strong financial position, with
transformation programmes well in advance to transition away from
natural gas across all Group divisions.
The Group has recently secured new credit facilities to support
investments and other growth programmes. The GBP4m Government
provided COVID related loan facility, CLBIL, has been repaid in
full and undrawn facilities stand comfortably at GBP20m.
Technical Fibre Products (TFP)
TFP was nominally impacted during the prior pandemic year and
has demonstrated over 20% growth this year, which will exceed
market expectations whilst maintaining pre-pandemic margin levels.
The outlook for TFP, which is not significantly exposed to energy
costs, remains strong. The new production line, commissioned in
2021 and adding 50% production capacity, is now fully operational
and is being utilised to support additional demand from hydrogen
markets with further capacity required beyond 2024.
TFP Hydrogen, acquired in January 2021, is performing well
compared to our expectations. The strategic rationale for the
acquisition has been proven and it has added a significant new set
of complementary products and services to TFP's core offerings
building further on our hydrogen proposition. Additional production
capacity has been introduced in the US in preparation to support
local markets. Further hydrogen plating capacity is planned for TFP
to meet the needs of strong market demand.
Colourform
Colourform, which had grown by 9% during the previous pandemic
year, is expected to have further sales growth of 20% this year.
New contracts have been awarded and commercialised in the wine,
spirits, and perfume markets, delivering renewable and recyclable
packaging to leading global brands such as Ruinart, L'Oréal and
Dries Van Noten. The outlook for Colourform, which is not
significantly exposed to energy costs, remains unchanged.
The business has invested in product design and print capability
and will continue to invest in further capacity and capability.
Paper
Paper was the most significantly impacted part of the Group
through the previous pandemic year. Nevertheless, all customers
were retained, and demand has quickly returned. With new additional
customers and contracts won, sales have grown over 30% in the
year.
The start of the Russia/Ukraine conflict and the resulting jump
in energy costs has, however, significantly affected Paper, which
is by far our most energy-intensive division, The average wholesale
gas price has moved from 50p/therm to over 250p/therm, peaking at
800p/therm in Q4. This has materially impacted the recent
profitability of the division. Actions have been taken: in addition
to recent price increases, a customer energy surcharge is being
implemented to mitigate the impact moving forward.
Plans to decarbonise the Paper division have already been made.
The plan is to move away from gas entirely by 2030. Towards this
end, s ome technologies have been implemented in the current year.
These, combined with additional advances to come this next year,
will reduce our carbon emissions and our dependence on gas.
Paper will continue to drive the product portfolio towards
higher-value products, supported by investment in additional
embossing capacity.
Other information
The financial information on which this trading statement is
based has not been reviewed and reported on by the external
auditors.
Year-end results
The results for the year ending 26 March 2022 are scheduled for
release on 21 June 2022.
*Adjusted for IAS 19 impact
For further information please contact:
Enquiries:
James Cropper PLC (AIM: CRPR) Shore Capital
Phil Wild, Chief Executive Robert Finlay, Henry Willcocks
Officer John More
Isabelle Maddock, Chief Finance Tel: + 44 (0) 20 7601 6100
Officer
Jim Aldridge, Company Secretary
Tel: +44 (0) 1539 722002
www.jamescropper.com
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