REG - Cropper(James) PLC - Full Year Results
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RNS Number : 3811R Cropper(James) PLC 17 July 2025
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17 July 2025
James Cropper plc
('James Cropper', the 'Company' or the 'Group')
Full Year Results
Robust performance with new strategic direction
James Cropper plc (AIM: CRPR), the Advanced Materials and Paper &
Packaging group, today announces its audited results for the year ended 29
March 2025 ("FY25").
HEADLINES
Financial
· Group revenue of £99.3m (FY24: £103.0m):
- 3% growth in Advanced Materials
- 7% decline in Paper & Packaging due to a change in product mix.
· Adjusted EBITDA of £6.7m (FY24: £6.6m), driven by robust cost management.
· Adjusted Operating Profit* up 32% to £2.6m (FY24: £2.0m), with the benefit
of a lower depreciation charge
· Adjusted profit before tax** up 77% to £1.3m (FY24: £0.8m).
· Exceptional costs of £7.2m (FY24: £5.3m) due to non-cash asset impairment.
· Loss before tax of £6.7m (FY24: £5.3m).
· Net debt reduced 17% to £12.9m (FY24: £15.5m) driven by disciplined capital
expenditure and strong working capital management.
· Net cash generated from operating activities up 7% to £7.6m (FY24: £7.2m).
· Basic and diluted loss per share increased 32% to -55.1p (FY24: -41.8p).
Strategic
· David Stirling appointed Chief Executive Officer in February 2025, leading a
comprehensive business review and the development of the strategy.
· Revised Group strategy presented at Capital Markets Event on 18 June 2025,
focusing on:
- Driving underlying double-digit revenue growth over the medium term in
Advanced Materials by leveraging technology platforms, developing the
opportunity in established markets and targeting high-potential markets.
- Delivering sustainable profitability in through operational stability in
Paper & Packaging with growth based on a '3 Peaks' model to improve asset
utilisation and product mix.
- Clear capital allocation approach along with strong financial discipline to
support long-term shareholder value creation.
CURRENT TRADING AND OUTLOOK
For FY26, the Board expects to see the initial results from the implementation
of the new strategy and is confident that the Group will deliver significant
growth in Adjusted EBITDA profitability against FY25. Trading in the first
quarter was ahead of the Board's expectations and at a similar level to the
strong start recorded in FY25. Despite headwinds from the loss of business at
a merchant customer, as previously announced, expectations are for Paper &
Packaging to deliver a significant improvement in Adjusted EBITDA against
FY25, and to achieve run-rate Adjusted EBITDA breakeven in the final
quarter. The Advanced Materials business is expected to report high
single-digit revenue growth for full year FY26, with planned operational cost
investments during the period focused on revenue growth beyond FY26.
Commenting on the full year results, James Cropper CEO David Stirling said:
"This is a period of change for the Group, and after six months as CEO, I am
encouraged by the progress we have made in laying the groundwork for future
success. We have a clear strategic direction, a focused plan of execution, and
a stronger foundation from which to build.
"At our Capital Markets Event in June, we set out a refreshed Group strategy,
one that positions Advanced Materials for organic growth by unlocking the
potential of our technology platforms and concentration of resources on
certain high-value opportunities. In Paper & Packaging, a focus on
operational stability and clarity on priorities, along with product mix
adjustments is already helping to drive more efficient operations and more
resilient outcomes. Backed by a disciplined capital allocation framework, we
are committed to creating long-term value for our shareholders."
*Alternative Performance Measure 1 (APM1) "adjusted operating profit" refers
to operating profit before interest and prior to the impact of IAS 19 and
exceptional items.
**Alternative Performance Measure 2 (APM2) "adjusted profit before tax" refers
to profit before tax prior to the impact of IAS 19 and exceptional items.
-ENDS-
Enquiries:
James Cropper plc Tel: +44(0)1539 722002
David Stirling, Chief Executive Officer
Andrew Goody, Chief Financial Officer
Shore Capital - Nominated Adviser and Broker Tel: +44 (0)207 408 4090
Daniel Bush, David Coaten, Henry Willcocks, Lucy Bowden
IFC Advisory - Financial PR Tel: +44 (0) 203 934 6630
Graham Herring, Tim Metcalfe, Zach Cohen james.cropper@investor-focus.co.uk
About James Cropper plc
James Cropper plc is globally recognised for its specialist capabilities in
the design and manufacture of advanced materials and paper products. Operating
through two principal businesses - Advanced Materials and Paper &
Packaging - and built upon 180 years of innovation, the Group serves a diverse
range of customers with high-performance solutions tailored to specialised
applications.
The Advanced Materials business develops cutting-edge nonwoven materials and
electrochemical coatings for sectors including aerospace, clean energy, and
defence. The Paper & Packaging business offers premium creative papers and
bespoke moulded fibre packaging together with leading recycled-fibre
capabilities and products, supporting the transition to a circular economy.
Headquartered in Burneside (UK), with additional manufacturing sites in Crewe
(UK), Launceston (UK), and Schenectady (USA), James Cropper leverages deep
expertise in material science and longstanding partnerships with
industry-leading businesses and brands to develop bespoke solutions that meet
complex technical and aesthetic specifications.
Chair's Letter
Dear Shareholders
The financial year ended 29 March 2025 was a significant year for James
Cropper, marked by changes in the Group's executive leadership and an
evolution of our strategy, focused on stability and growth.
PERFORMANCE OVERVIEW
Performance in the period was largely consistent with the prior year, with a
slight reduction in revenue, balanced by rigorous management of our cost base
against a backdrop of economic uncertainty. Adjusted EBITDA remained level
with the prior year with a modest improvement in the Group's adjusted
operating profit and adjusted profit before tax, linked to lower levels of
depreciation. The Group's net debt saw a significant improvement owing to
robust cash management driving a reduction in working capital.
CEO SUCCESSION
In October 2024, following a thorough succession process led by the Nomination
Committee, the Board was delighted to announce the appointment of David
Stirling as Chief Executive Officer Designate. David joined the business in
January 2025 and was appointed Chief Executive Officer in February 2025.
David brings a wealth of experience, having previously served as CEO of
Zotefoams plc for 24 years, following
his time as a chartered accountant with KPMG in the UK and
PricewaterhouseCoopers in the US and Europe.
His deep operational, commercial, financial and technical experience, along
with a proven track record in delivering growth and developing new products
across diverse markets, will be instrumental as the Company embarks on its
next phase.
David succeeded Steve Adams, who retired as CEO and stood down from the Board
in February 2025 after a short handover period. Steve first joined James
Cropper as Managing Director of the Paper & Packaging business in 2017 and
was appointed CEO in August 2022. He navigated the Group through a challenging
period
and led a restructure in FY24, resulting in operational changes and a
significant reduction in the Company's cost base. On behalf of the Board, I
thank Steve for his contributions and wish him the best in retirement.
STRATEGY DEVELOPMENT
Following his appointment as CEO, David Stirling led a detailed review into
the business and the development
of a revised strategy for the Group. The revised strategy has full Board
endorsement and was presented to analysts and institutional investors at a
Capital Markets Event on 18 June 2025. A recording of the event is available
to view on the Company's website at https://jamescropper.com/investors/
(https://jamescropper.com/investors/) .
BOARD SUCCESSION
During the year, we welcomed Jon Yeung as an independent Non-Executive
Director and Chair of the
Audit Committee (now the Audit & Risk Committee) following our AGM in
September 2024. Jon is a
chartered accountant with significant experience in finance, leadership and
business transformation.
Jon succeeded Jim Sharp, who stood down as a Non-Executive Director and Audit
Committee Chair
following the AGM. On behalf of the Board, I thank Jim for his significant
contributions over 15 years and welcome Jon to James Cropper.
At the end of the financial year, as part of a structured retirement process,
Patrick Willink stood down from the Board and as Chief Innovation Officer on
29 March 2025. Patrick joined James Cropper in 1990 and has served on the
Board since 1998. He will continue to support the company as a Strategic
Advisor and member
of the Executive Committee until April 2026. Patrick's contributions over the
past 35 years have been considerable, including the development of key
innovations such as CupCycling® and Colourform® in the Paper & Packaging
business. On behalf of the Board, I extend our sincere thanks to Patrick for
his exceptional leadership and dedication, which have significantly shaped the
company's development.
I also confirm that Sarah Miles has informed the Board that she will not stand
for re-election at the Company's AGM in September 2025 and will therefore step
down as a Non-Executive Director following the AGM. The Board is grateful
for Sarah's contribution since being appointed in November 2021 and wishes her
every future success.
RISK MANAGEMENT
To enhance its oversight and management of risks, during the year the Board
introduced an enhanced strategic risk management framework. This framework is
designed to provide robust management of risks and support the delivery of our
strategic objectives. Additionally, the Board expanded the remit of the Audit
Committee, to become the Audit & Risk Committee. This change strengthens
our approach to strategic risk management and enhances Board oversight,
enabling us to better navigate the complexities of the current economic
environment.
STAKEHOLDER ENGAGEMENT
Stakeholder engagement is a crucial aspect of our business. Section 172 of the
Companies Act 2006 requires the Directors to promote the success of the Group
for the benefit of its members, having regard to the interests of broader
stakeholders. During the year, I and other members of the Board engaged
closely with our largest shareholders to discuss the Group's business, current
performance challenges, changes on the Board and to our Executive leadership,
and strategy. These meetings and discussions provided valuable insights into
the views of our investors, and the Board is grateful for the level of
engagement and feedback offered. We look forward to welcoming shareholders at
our forthcoming AGM in September 2025.
GROUP FACILITIES AND DIVIDENDS
In June 2024, the Board announced temporary adjustments to the covenants under
its UK banking facility (the UK Facility) which would apply for the period to
31 December 2024. The Group complied with these adjusted covenants during that
period and has complied with the original covenants since. No further covenant
relief is expected to be required. Following the year end, on 9 June 2025,
the Board announced that revised repayment terms had been agreed under the UK
Facility, which would provide greater liquidity headroom to support
implementation of the Company's strategic plans.
At the time of the Group's interim results on 19 November 2024, the Board
determined that no interim dividend would be paid to shareholders for the
first half of FY25 in the light of financial performance during that period.
As announced on 9 June 2025, the Board does not intend to pay dividends during
the period through to September 2026. No final dividend will therefore be
recommended to shareholders at the AGM in September 2025. The Board is
confident that retaining earnings will at this stage better support the
Board's strategic objectives.
LOOKING AHEAD
The Board is confident that the revised strategy, developed under the
leadership of David Stirling, provides a clear and credible roadmap for
delivering sustainable performance improvement. With disciplined capital
allocation, the Board believes both divisions are well placed to deliver
against their strategic objectives and create enduring value for shareholders.
I would like to thank our employees for their unwavering support and
dedication over the last 12 months. We look forward to updating you on
progress against our strategic objectives in the coming year.
Mark Cropper
Non-Executive Chair
Chief Executive Officer's Review
I am pleased to present my first review as Chief Executive Officer of James
Cropper, covering the financial year ended 29 March 2025.
Following my appointment as Chief Executive Officer in February 2025, I have
identified the priorities for the Group and for the two Business Units:
Advanced Materials and Paper & Packaging. This was based on a
comprehensive review of the business which, in the case of Advanced Materials,
was well progressed by the business' management and which - following review
and endorsement by the Board - was presented at a Capital Markets Event held
on 18 June 2025.
The revised strategy, which is described further below, incorporates plans to
develop organic growth in the Advanced Materials business together with a
structured programme of work to improve the performance and robustness of the
Paper & Packaging business, supported by a disciplined approach to cash
and capital management.
As we make progress to deliver these priorities, there will undoubtedly be
challenges which will test the resilience of our business, our people and the
strategy. James Cropper has a team of talented and resilient people ready to
face these challenges.
FY25 Performance
Group
Group revenue was marginally lower than the prior year, with Advanced
Materials growing 3% and Paper & Packaging declining 7%, much of this
decline being attributable to product mix with sales tonnage in Paper &
Packaging being similar to the prior year.
Despite lower revenue, Adjusted Operating Profit improved by 32%, although
this was substantially due to lower depreciation as a result of asset
impairment in the prior period. With further asset impairment in relation to
Paper & Packaging assets this year, the Board has decided that Adjusted
EBITDA (explained more fully in the CFO review) is a metric more reflective of
underlying business profitability and performance. Adjusted EBITDA of £6.7m
was at a similar level to the prior year (FY24: £6.6m).
The mechanism for recharging Group costs to Business Units was amended in the
period, to better reflect the ownership of these costs, leading to a lower
recharge to the two Business Units which is more in line with the services
used.
Excluding the impairment of assets in Paper and Packaging, the balance sheet
strengthened in the period, with a significant reduction in Net Debt resulting
from a reduction in capital expenditure coupled with effective management of
working capital.
Metric FY25 FY24 Change
Revenue £99.3m £103.0m -4%
Adjusted EBITDA £6.7m £6.6m +1%
Adjusted Operating Profit £2.6m £2.0m +32%
Adjusted Profit Before Tax £1.3m £0.8m +77%
Net Debt £12.9m £15.5m -17%
After the year end, on 1 May 2025, the Group announced the sale of certain
non-core intellectual property assets, in a transaction which generated an
initial cash consideration of €1.75 million, and the potential for further
deferred and royalty-based income over the next nine years. The intellectual
property assets remain available to the Group under licence without fee for
internal use.
Subsequently, on 9 June 2025, the Group announced that revised repayment terms
had been agreed with its lenders under its principal UK banking facility.
Each of these transactions provides enhanced liquidity headroom to support
delivery of the Board's strategy.
Advanced Materials
Metric FY25 FY24 Change
Revenue £35.7m £34.5m +3%
Adjusted EBIDTA £10.6m £9.3m +14%
Adjusted Operating Profit £9.0m £7.7m +17%
Advanced Materials manufacture nonwoven materials and electrochemical coating
solutions. Our customers are in two main categories: Composites and Energy,
with most products being sold into complex supply chains, often with 3-5
layers before being incorporated into the final product. Nonwoven papers, made
using carbon, glass, polymer or other fibres are predominantly used in
Composites markets, with some applications in energy transition, while
electrochemical coatings are almost exclusively sold into Energy markets.
Many of our customers are in markets which are relatively immature and usually
developing rapidly - we term these 'nascent markets' - while the majority of
revenue comes from more established markets. Nascent markets offer higher
levels of growth and return, with commensurately higher risk levels and are
often more volatile and difficult to predict. The Energy markets in which we
operate, such as battery technology and hydrogen fuel-cells and electrolysis,
are largely nascent markets while Composite markets are typically more
established and would be expected to deliver lower, but more predictable,
growth.
Revenue in the Advanced Materials business increased by £1.2m or 3% in the
period. Composites, which represents around 70% of sales, grew by 13% with
pricing being the main factor. Sales in Energy declined by 17%, delivering
good growth momentum in the second half of 2025 while recognising the strong
comparative in the first half of FY24 when fuel cell revenue was at an
elevated level. Across the business unit, operational improvements helped
improve margins.
Paper & Packaging
Metric FY25 FY24 Change
Revenue £63.7m £68.5m -7%
Adjusted EBITDA £(2.1)m £(2.5)m +16%
Adjusted Operating Loss £(4.1)m £(5.1)m +19%
Paper & Packaging operates in a number of segments globally, with the UK,
Continental Europe and the USA being the main geographic markets where James
Cropper supplies merchants and packaging fabricators in the creative, luxury
packaging and speciality papers business. These markets are, for the most
part, declining and our performance is partly market related. However, the
business' share of the addressable paper market is small and delivering sales
growth through agility and improved service is possible.
Overall, sales volumes were at similar levels to FY24 but a sharp decline in
Colourform moulded fibre products, to 2.1% of Business Unit revenue (FY24:
6.2%), where the business is more linked to luxury packaging markets and is
project driven, together with other product mix changes led to the decline in
revenue.
Depreciation declined to £2.1m (FY24: £2.7m) due to impairment of assets in
the prior accounting period, and the mechanism for allocating Group costs to
Business Units was refined in the period to better reflect the services used,
both of which contributed to the lower Adjusted Operating Loss in the Business
Unit.
Business Review and Revised Strategy
Upon joining the business, I was impressed by the depth of technical expertise
and commitment across our teams. However, it was also clear that performance
had been inconsistent. A more focused, disciplined, and commercially driven
approach was required to strengthen the operational and commercial
foundations, ensure consistent performance and ultimately drive value for
shareholders and broader stakeholders.
To address this, we conducted a comprehensive review of the business. This
review assessed the business model, commercial and strategic positioning,
operational effectiveness and long-term potential. This led to the
development of a revised strategy for the Group, which has the full support of
the Board, and was presented at our Capital Markets Event on 18 June 2025.
A recording of the Capital Markets Event together with copies of the materials
presented are available to view on the Group's website at
https://jamescropper.com/investors/
(https://url.avanan.click/v2/r02/___https:/jamescropper.com/investors/___.YXAxZTpzaG9yZWNhcDphOm86ODA5YTU2MTJmZDgwZjlkZjc2MTQ2NjI2MDU1YWI1YWY6NzozZWNiOjc5NmRmYWZhMWYwNDI1ODk5ZjQwOTMyNDFlM2UyNTRlNjE2YjE4NGI5ZGY5YzAxNWRhMDdiN2U4OGQ5NTAwMjk6cDpGOk4)
.
The revised strategy is designed to reset the business for long-term success
and is built around three core pillars:
1. Organic Growth in Advanced Materials
While the Advanced Materials business has historically delivered strong
margins, it has lacked consistent top-line growth. Our revised strategy aims
to deliver underlying double digit revenue growth over the medium term by
focusing on high-potential markets where we either have a competitive edge or
potential to develop one. These markets include established sectors, such as
aerospace and defence, where we have long-standing customer relationships,
qualified product specifications, and proven product performance, as well as
nascent sectors like hydrogen and carbon capture, which offer significant
long-term growth potential but are inherently more volatile and less
predictable.
To support growth, we are aligning more closely with customers in our focus
markets, ensuring that our technical capabilities are tightly matched to
customer needs and market dynamics. We are implementing a more structured
approach to opportunity development, including deeper engagement with existing
customers, replication of proven applications across adjacent markets, and
proactive identification of new use cases where the attributes of our
materials can deliver differentiated value.
This strategy is underpinned by a more agile operating model and investment in
technical leadership, enabling us to scale effectively as demand increases. By
focusing our efforts on a defined set of markets and opportunities, we are
building a more resilient and growth-oriented business positioned to deliver
long-term sustainable value.
2. Profitability in Paper & Packaging
The Paper & Packaging business has faced persistent challenges in recent
years, including decline in certain segments of our markets, inflationary cost
pressures, and operational complexity. While previous restructuring efforts
delivered cost savings in some areas, predominantly direct operational labour,
they did not address deeper structural issues, such as unclear accountability
and the need for improved management systems to drive broader operational and
cost efficiencies. Additionally, operating below optimal asset utilisation has
increased operational gearing risks.
To address these challenges, we have introduced a new '3 Peaks' model, that
rebalances our operations and commercial positioning across three distinct
product categories: (i) commodity papers, (ii) core products, and (iii)
technical papers.
In the near term, our focus is on stabilising performance through Peaks 1 and
2, commodity and core products. These categories provide the volume and
flexibility needed to optimise asset utilisation, improve cost recovery, and
support consistent service levels. There is ample opportunity to operate more
effectively and efficiently in delivering these products, with reductions in
fixed and operating costs, such as labour, energy, material utilisation and
procurement, expected to contribute substantially to improvements in the Paper
and Packaging business profitability. Over time, we will increasingly invest
in Peak 3, technical papers, to develop higher-value, innovation-led products
that more closely align to our Advanced Materials business. This will enable
us to open new market opportunities and deliver differentiated solutions to
customers seeking sustainable, fibre-based alternatives.
The 3 Peaks model also improves our ability to absorb and reuse recycled fibre
and internal waste streams, supporting both cost efficiency and our customers'
sustainability goals. A balanced, flexible product mix strengthens our ability
to respond to market dynamics while driving operational efficiency. Alongside
these structural changes, we are embedding stronger commercial discipline,
improving margin management, and focusing on customer segments where we can
deliver the greatest value. We expect this revised approach to improve
performance in FY26, and to play a key role in restoring long-term
profitability.
Along with operational efficiency, commercial positioning and discipline,
increased asset utilisation the other primary lever to improve profitability.
Increasing revenue through growth in sales volume is therefore an important
objective. The recent announcement, that a significant merchant customer of
the Paper & Packaging business would no longer source certain coloured
paper ranges from the Company, decreases expected asset utilisation in the
near future. While unexpected and unwelcome, this does not change our
strategy or intent and an assessment of optimal operational structures, which
also considers our business growth pipeline and expected outcome from this, is
currently being undertaken.
The profit performance of the Paper & Packaging business has meant that,
in the last two financial years, we have had consecutive asset impairment
charges of £4.4m and £7.2m. These non-cash charges reflect the expected
returns of the business based on its financial position as at the relevant
reporting date, and do not take into account the revised strategy outlined
above and presented at our Capital Markets Day on 18 June 2025 or other events
since that time.
3. Disciplined Capital Allocation
Financial discipline is a core component of any robust business strategy. In
addition to stabilising the balance sheet in FY25 and improving the repayment
profile on our UK facility, our immediate priorities are to maintain capital
expenditure, working capital and cash management disciplines, and to embed
leverage at <2x EBIDTA. Subject to this, we will look to support
investment in growth, primarily expected to be in the Advanced Materials
business, and to reinstate dividends when appropriate. We are working with
the Trustee to develop a strategy to eliminate the deficit in the defined
benefit pension schemes.
Looking Ahead
I am confident that our new strategy provides a clear and credible roadmap for
delivering sustainable performance improvement across the Group. Our focus
now is on disciplined execution, embedding accountability at every level,
aligning our teams around clear priorities, and delivering measurable value to
our customers and stakeholders.
In Advanced Materials, our strategy is to deliver consistent, modest growth in
our established markets, such as aerospace, while positioning ourselves to
capitalise on the significant upside potential in nascent sectors like
hydrogen, battery systems, and carbon capture. These emerging markets are
still maturing, but we are well positioned to grow with them, supported by our
deep technical expertise, strong customer relationships, and a focused
innovation pipeline.
In the Paper & Packaging business, our immediate priority is to stabilise
and strengthen the business. We are focused on restoring profitability by
optimising our product mix, improving asset utilisation, and embedding
stronger margin management. Where we are targeting some volume growth in the
near term, particularly through Peak 1 (commodity papers), we are doing so in
large markets where even a modest share gain can deliver meaningful throughput
and cost recovery benefits. This approach supports both financial resilience
and broader sustainability goals through increased use of recycled fibre and
waste streams.
For FY26, the Board expects to see the initial results from the implementation
of the new strategy and is confident that the Group will deliver significant
growth in Adjusted EBITDA profitability against FY25. Trading in the first
quarter was ahead of the Board's expectations and at a similar level to the
strong start recorded in FY25. Despite headwinds from the loss of business at
a merchant customer, referenced above, expectations are for Paper &
Packaging to deliver a significant improvement in Adjusted EBITDA against
FY25, and to achieve run-rate Adjusted EBITDA breakeven in the final
quarter. The Advanced Materials business is expected to report high
single-digit revenue growth for full year FY26, with planned operational cost
investments during the period focused on revenue growth beyond FY26.
In the longer term, innovation remains critical to our future. Our technology
continuum, from natural fibres to technical fibres, coated technical fibres,
and ultimately advanced coatings, gives us a depth of expertise and unique
platform to develop differentiated solutions to drive value. Our asset base,
of older machines in Paper and bespoke machinery in Advance Materials,
combined with deep technical expertise gives us an opportunity to develop
highly differentiated materials for the future.
The strategic reset has been thorough, data-driven, and grounded in a clear
understanding of our capabilities and market opportunities. We believe this
plan provides the right balance of ambition and realism, positioning the Group
to build long-term shareholder value.
I would like to thank our employees for their resilience, professionalism, and
commitment during a period of significant change. Their expertise and
dedication are the foundation of our future success.
Whilst external uncertainties will always exist, I am confident we have the
right strategy, leadership, and capabilities in place to deliver sustainable
growth and create enduring value for all our stakeholders.
David Stirling
Chief Executive Officer
Chief Financial Officer's Review
RESULTS FOR THE PERIOD
2025 2024
£'000 £'000
Group Revenue 99,343 102,968
Adjusted EBITDA APM4 6,694 6,606
Profit summary
Paper & Packaging (4,142) (5,138)
Advanced Materials 8,992 7,715
Other Group expenses (2,242) (600)
Adjusted operating profit APM1 2,608 1,977
Net finance costs (excluding IAS 19 impact) (1,263) (1,219)
Adjusted profit before tax APM2 1,345 758
Exceptional costs (7,229) (5,010)
Exceptional finance costs - 262
Adjusted loss before tax after exceptional items APM3 (5,884) (4,514)
Net IAS 19 pension adjustments
Net current service charge required 25 6
Net interest (829) (753)
Net IAS 19 pension impact (804) (747)
Loss before tax (6,688) (5,261)
ALTERNATIVE PERFORMANCE MEASURES
The Board uses four alternative performance measures (APMs) to evaluate
business performance. The purpose of these APMs is to highlight underlying
business performance by removing the impact of exceptional gains and losses
and removing IAS 19 pension costs that can vary significantly across reporting
periods.
· APM 1 'Adjusted operating profit': 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': Adjusted profit before tax refers to profit
before tax prior to the impact of IAS 19 and exceptional items.
· APM3 'Adjusted profit before tax after exceptional items': Adjusted profit
before tax after exceptional items refers to profit before tax prior to the
impact of IAS 19.
· APM4 'Adjusted EBITDA': EBITDA refers to profit before interest, tax,
depreciation and amortisation. Adjusted EBITDA is EBITDA prior to the impact
of IAS 19 and exceptional items.
REVENUE
Group revenue for the financial period of £99.3m was 3.5% below the prior
period figure of £103.0m. Revenue
in the first half of the financial period was 12% below the same period a year
earlier when comparatives were
stronger in both businesses. Revenue in the second half of the financial
period was 6.5% above the same period a year earlier, reflecting a return to
growth in our Advanced Materials business and stabilisation of the paper
merchant market.
Revenue in the Advanced Materials business increased by £1.2m or 3.4% in the
financial period. Growth in revenue from established defence and aerospace
markets across the period was partly offset by a drop in revenue from the more
nascent hydrogen fuel cell and PEM electrolyser markets in the first half of
the period, due to continued challenges around end-market project economics.
Fuel cell and electrolyser revenue increased in the second half of the
financial period, reflecting the success of our customers in winning new
orders.
Revenue in the Paper & Packaging business fell by £4.8m or 7.0% in the
financial period due to continued weakness in luxury packaging markets, partly
offset by a recovery in core paper merchant business following the end of
destocking activity in the onward supply chain.
COSTS AND EXPENSES
Material costs (including the impact of changes in inventories) for the
financial period of £35.4m were £2.0m below the prior period cost of
£37.4m. Material costs as a percentage of revenue fell slightly during the
financial period to 35.6% (prior period: 36.3%), reflecting operating
efficiencies in the Advanced Materials business, partly offset by adverse
product mix and the impact of rising pulp prices in the Paper & Packaging
business.
Energy costs for the financial period of £6.0m were £1.1m below the prior
period cost of £7.1m due to lower unit energy prices in the financial period
and a modest drop in Paper & Packaging production volumes.
Employee costs of £32.7m in the financial period were £1.8m below the prior
period cost of £34.5m, falling from 33.6% of revenue in the prior period to
32.9%, due to efficiencies in indirect labour costs that outweighed the cost
of the Group's annual pay award.
Other expenses fell by £0.7m from £19.5m in the prior period to £18.8m in
the financial period, in line with the drop in revenue.
ADJUSTED EBITDA
Adjusted Group EBITDA (APM4) for the financial period of £6.7m was £0.1m
above the prior period, giving an Adjusted EBITDA margin for the financial
period of 6.7% (prior period: 6.4%).
ADJUSTED OPERATING PROFIT
Adjusted Group operating profit (APM1) for the financial period of £2.6m was
£0.6m above the prior period figure of £2.0m, giving an adjusted operating
profit margin for the financial period of 2.6% (prior period: 1.9%).
The allocation to the trading businesses of expenses managed by the Group
office was revised in the financial period to better reflect underlying cost
drivers and service provision. This resulted in a lower cost allocation to
the Paper & Packaging business.
Adjusted operating profit in the Advanced Materials business increased by
£1.3m in the financial period to £9.0m (prior period: £7.7m) due to revenue
growth of £1.2m and an increase in the operating profit margin to 25.2%
(prior period: 22.4%) as a result of more robust pricing and cost
efficiencies.
The adjusted operating loss in the Paper & Packaging business in the
financial period of £4.1m was an improvement of £1.0m from the prior
financial period operating loss of £5.1m. The improvement was due to overhead
cost savings and lower energy prices, partly offset by the impact of the
£4.8m drop in revenue, higher pulp prices and adverse product mix.
ADJUSTED PROFIT BEFORE TAX
Adjusted Group profit before tax (APM2) for the financial period of £1.3m was
£0.6m above the prior period due to the £0.1m increase in Adjusted Group
EBITDA and a drop in depreciation during the financial period as a result of
the asset impairment charge in the prior financial period.
EXCEPTIONAL COSTS
During the period the Group recognised a £7.2m non-cash impairment of the
carrying value of the property, plant and equipment and right-of-use assets in
its Paper & Packaging business. The Board believes that the reduced asset
carrying value better reflects the position of the Paper & Packaging
business at the balance sheet date after four years of operating losses. The
Board remains confident in the future of the Paper & Packaging business
and the success of the turnaround plan being implemented after the balance
sheet date by the new management team.
Exceptional operating costs in the prior period principally comprised
restructuring costs of £2.3m, a non-cash tangible fixed asset impairment
charge of £4.4m, a credit of £1.4m from settlement of a legal claim in
respect of the Group's pension arrangements, and a credit of £0.4m based on
reassessment of the contingent consideration due in respect of the acquisition
of TFP Hydrogen Limited.
STATEMENT OF FINANCIAL POSITION
2024 2023
£'000 £'000
Non-current assets (excluding deferred tax) 26,921 36,510
Total current assets (excluding cash) 34,586 34,829
Total current liabilities (excluding loans and borrowings) (16,255) (15,570)
Deferred tax assets less deferred tax liabilities 3,958 2,628
49,210 58,397
Net IAS 19 pension deficit (15,914) (17,293)
33,296 41,104
Net borrowings (12,889) (15,537)
Equity shareholders' funds 20,407 25,567
Equity shareholders' funds fell by £5.2m during the financial period,
primarily due to the non-cash fixed
asset impairment charge of £7.2m in the Paper & Packaging business.
The net book value of non-current assets fell by £9.6m across the financial
period, primarily due to the £7.2m impairment of the carrying value of the
tangible fixed assets in the Paper & Packaging business noted above. In
addition, capital expenditure of £1.7m in the period (prior period: £3.8m)
was below the underlying depreciation charge for the period, reflecting the
Group's focus on cash management.
Total current assets less total current liabilities fell by £0.9m across the
financial period due to improved working capital management and the timing of
creditor payments around the period-end reporting date.
The £1.3m increase in the deferred tax balance during the financial period
was primarily due to the drop in deferred tax liabilities in respect of
accelerated capital allowances in respect of the fixed asset impairment
charge.
Net debt fell by £2.6m across the financial period, reflecting control of
capital expenditure and working capital.
CASH FLOW
2025 2024
£'000 £'000
Net cash inflow from operating activities 7,646 7,170
Net cash outflow from investing activities (3,246) (4,315)
4,400 2,855
Net cash outflow from financing activities (2,798) (1,483)
Net increase in cash and cash equivalents 1,602 1,372
Effects of exchange rate fluctuations on cash held (199) 160
Net increase in cash and cash equivalents 1,403 1,532
Opening cash and cash equivalents 9,211 7,679
Closing cash and cash equivalents 10,614 9,211
The net cash inflow from operating activities in the financial period of
£7.6m (prior period: £7.2m) includes:
· Adjusted EBITDA (APM 4) of £6.7m (prior period: £6.6m).
· cash inflow from working capital of £2.2m (prior period: £2.9m).
· Pension deficit payments of £1.5m (prior period: £1.4m)
The net cash outflow from investing activities in the financial period of
£3.2m (prior period: £4.3m) includes capital expenditure of £1.7m,
significantly below the prior period figure of £3.8m due to careful control
of expenditure as part of the Group's focus on cash management, and the final
£1.2m contingent consideration on the TFP Hydrogen acquisition (prior period:
interim contingent consideration payment of £0.25m).
The net cash outflow from financing activities of £2.8m in the financial
period includes repayments of £1.8m on the US bank loan, right-of-use assets
and finance leases (prior period: repayments of £1.9m) and £1.0m of cash
interest payments (prior period: £0.9m). No drawdowns were made during the
financial period on the UK bank loan (prior period: £2m drawdown).
The net cash inflow from operating activities for the period is 114% of
Adjusted EBITDA (prior period: 109%).
NET DEBT, FUNDING AND FACILITIES
2025 2023
Net debt at year-end £'000 £'000
UKEF UK bank loan 15,000 15,000
US term loan 3,463 4,059
Less: capitalised transaction fees (121) (145)
Lease liabilities 5,161 5,834
Total borrowings 23,503 24,748
Less: Cash and cash equivalents (10,614) (9,211)
Net debt 12,889 15,537
Funding availability at year-end 10,614 9,211
Cash and cash equivalents
Overdraft 3,500 3,500
Funds available at year end 14,114 12,711
The Group funds its operations from operating cash flow, a UK bank loan, a US
bank loan, finance and right-of-
use leases, and also has a £3.5m overdraft facility to provide additional
liquidity.
The UK bank loan is a £15m facility (prior period: £25m facility) with HSBC
Bank plc and National Westminster Bank plc under the UKEF's Export Development
Guarantee scheme. At 29 March 2025, £15m (30 March 2024: £15m) was drawn
under this facility. The facility is repayable in 20 quarterly instalments
from June 2025 to March 2030 inclusive, in line with the profile below:
· £400,000 per quarter for the six quarters from June 2025 to September 2026
inclusive.
· £750,000 per quarter for the four quarters from December 2026 to September
2027 inclusive.
· £960,000 per quarter for the remaining ten quarters to March 2030.
The repayment instalments were amended to the profile set out above by a
Facility Amendment dated 9 June 2025. Prior to this Amendment, the amount
drawn at 29 March 2025 was repayable in 20 equal quarterly instalments of
£750,000 each from June 2025 to March 2030.
The interest rate on the facility is SONIA +1.95%. The floating interest rate
cost on the £15m drawn under the
facility is capped at 1.5% until 31 March 2026. The UK bank loan has two
financial covenants that are measured on the company's financial quarter-end
dates.
· The ratio of net debt to the last 12 months' EBITDA is required to be no
higher than 3.5.
· The ratio of EBITDA to net interest, both calculated by reference to the
12-month period ending on the test date, is required to be no less than 4.0.
For the purpose of these covenants, right-of-use assets are accounted for as
operating leases, and EBITDA excludes exceptional items and all IAS 19 pension
adjustments.
Both financial covenants were amended for the June, September and December
2024 test dates to provide additional headroom against potential downside
scenarios. The financial covenants reverted to the levels set out above for
the March 2025 test date.
The Group was in compliance with its banking covenants at 29 March 2025 and
throughout the financial period that ended on that date. At 29 March 2025 the
net debt to Adjusted EBITDA ratio was 1.9x (30 March 2024: 2.4x).
The US bank loan is a term facility with HSBC Bank USA at an interest rate of
SOFRA + 2.75%. At 29 March 2025, $4.5m (30 March 2024: $5.1m) was outstanding
under the facility. The facility is being repaid at $187,500 per quarter to
December 2025 and $225,000 per quarter from March 2026, with the remaining
balance of $3.2m
repayable in December 2026. This facility does not have any financial
covenants.
The Group has a number of right-of-use and finance leases that run for terms
between three and five years that are typically secured on the asset they were
used to purchase at various rates of interest. The total amount borrowed on
these facilities at 29 March 2025 was £5.2m of which £0.9m was repayable
within 12 months (30 March 2024: £5.8m borrowed of which £1.1m was repayable
within 12 months).
The Group has a £3.5m overdraft facility with HSBC Bank plc with an annual
renewal date of May 2026 and an interest rate of Bank of England base rate
plus 1.95%. The facility was undrawn throughout the year to 29 March 2025.
Andrew Goody
Chief Financial Officer
James Cropper PLC
Group Statement of Comprehensive Income
Note 52 week period to 52 week period to
29 March 2025 30 March 2024
£'000 £'000
Revenue 6 99,343 102,968
Expected credit loss provision (83) 130
Other income 310 1,970
Changes in inventories of finished goods and work in progress 502 (2,604)
Raw materials and consumables used (35,912) (34,785)
Energy costs (5,982) (7,130)
Employee benefit costs (32,709) (34,547)
Depreciation and amortisation (4,086) (4,619)
Impairment of fixed assets (7,229) (4,427)
Write-off of assets on restructuring - (469)
Other expenses (18,750) (19,514)
Operating loss 9 (4,596) (3,027)
Interest payable and similar charges (2,093) (2,234)
Interest receivable and similar income 1 -
Loss before taxation 9 (6,688) (5,261)
Tax income 1,419 1,264
Loss for the period (5,269) (3,997)
Loss per share - basic and diluted (55.1)p (41.8)p
Other comprehensive income
Loss for the period (5,269) (3,997)
Items that are or may be reclassified to profit or loss
Exchange differences on translation of foreign operations (90) (196)
Cash flow hedges - effective portion of changes in fair value (441) (258)
Cash flow hedges - cost of hedging 127 109
Items that will never be reclassified to profit or loss
Retirement benefit liabilities - actuarial gains/(losses) 678 (1,787)
Deferred tax (expense) / income on actuarial gains / losses retirement benefit (169) 447
liabilities
Other comprehensive income/(expense) for the period 105 (1,685)
Total comprehensive expense for the period attributable to equity holders of (5,164) (5,682)
the Company
James Cropper PLC
Statement of Financial Position
Note Group as at Group as at
29 March 2025 30 March 2024
£'000 £'000
Assets
Goodwill 1,264 1,264
Intangible assets 819 1,210
Property, plant and equipment 19,445 27,667
Right-of-use assets 5,393 6,028
Other financial assets - 341
Deferred tax assets 5,155 5,400
Total non-current assets 32,076 41,910
Inventories 15,284 15,796
Trade and other receivables 17,854 17,723
Provision for impairment (596) (513)
Other financial assets 384 478
Cash and cash equivalents 10,614 9,211
Corporation tax 1,466 1,345
Total current assets 45,006 44,040
Total assets 77,082 85,950
Liabilities
Trade and other payables 16,061 15,570
Loans and borrowings 3,181 1,610
Total current liabilities 19,242 17,180
Long-term borrowings 20,322 23,138
Retirement benefit liabilities 8 15,914 17,293
Deferred tax liabilities 1,197 2,772
Total non-current liabilities 37,433 43,203
Total liabilities 56,675 60,383
Equity
Share capital 2,389 2,389
Share premium 1,588 1,588
Translation reserve 489 579
Reserve for own shares (1,407) (1,407)
Cash flow hedging reserve 341 782
Cost of hedging reserve (119) (246)
Retained earnings 17,126 21,882
Total shareholders' equity 20,407 25,567
Total equity and liabilities 77,082 85,950
James Cropper PLC
Statement of Group Cash Flows
Group Group
2025 2024
£'000 £'000
Cash flows from operating activities
Loss for the period (5,269) (3,997)
Adjustments for:
Tax income (1,419) (1,264)
Depreciation and amortisation 4,086 4,619
Impairment of property, plant and equipment 6,914 4,427
Impairment of right-of-use assets 315 -
Write-off of assets on restructuring - 469
Earn out adjustment on contingent consideration on business acquisition (27) (422)
Net IAS 19 pension adjustments within profit (25) (6)
Past service pension deficit payments (1,505) (1,381)
Foreign exchange differences 207 (40)
Loss/(profit) on disposal of fixed assets 4 (40)
Interest payable and similar charges 2,092 2,234
Share based payments 4 (152)
Changes in working capital:
Decrease in inventories 498 2,352
(Increase) / decrease in trade and other receivables (573) 6,110
Increase / (decrease) in trade and other payables 2,287 (5,576)
Tax received / (paid) 57 (163)
Net cash generated from operating activities 7,646 7,170
Cash flows from investing activities
Purchase of intangible assets (268) (965)
Purchase of property, plant and equipment (1,742) (3,220)
Proceeds on disposal intangible assets - 120
Contingent consideration on business acquisition paid (1,236) (250)
Net cash used in investing activities (3,246) (4,315)
Cash flows from financing activities
Proceeds from issue of new loans - 2,000
Repayment of borrowings (499) (429)
Repayment of lease liabilities (1,338) (1,449)
Interest paid (961) (941)
Dividends paid to shareholders - (664)
Net cash used in financing activities (2,798) (1,483)
Net increase in cash and cash equivalents 1,602 1,372
Effects of exchange rate fluctuations on cash held (199) 160
Net increase in cash and cash equivalents 1,403 1,532
Cash and cash equivalents at the start of the period 9,211 7,679
Cash and cash equivalents at the end of the period 10,614 9,211
Cash and cash equivalents consists of cash at bank and in hand.
James Cropper PLC
Statement of Changes in Equity - Group
Reserve for Own Shares Cost of Hedging reserve Cash flow Hedging reserve
All figures in £'000 Share capital Share premium Translation reserve Retained earnings
Total
At 1 April 2023 2,389 1,588 775 (1,407) (355) 1,040 28,035 32,065
- - - - - - (3,997) (3,997)
Comprehensive expense for the period
Total other comprehensive (expense)/income - - (196) - 109 (258) (1,340) (1,685)
Dividends paid - - - - - - (664) (664)
Share based payment charge - - - - - - (152) (152)
Total contributions by and distributions to owners of the Group - - - - - - (816) (816)
2,389 1,588 579 (1,407) (246) 782 21,882 25,567
At 30 March 2024
Comprehensive expense for the period - - - - - - (5,269) (5,269)
Total other comprehensive (expense)/income - - (90) - 127 (441) 509 105
Share based payment charge - - - - - - 4 4
Total contributions by and distributions to owners of the Group - - - - - - 4 4
At 29 March 2025 489 (119) 341 17,126 20,407
2,389 1,588 (1,407)
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Basis Of Preparation
James Cropper Plc (the Company) is a public limited company incorporated and
domiciled in the United Kingdom and listed on the AIM market. The condensed
consolidated financial statements of the Company for the 52 weeks ended 29
March 2025, comprise the Company and its subsidiaries (together referred to as
the Group).
Statement of compliance
The condensed consolidated financial statements set out herein do not
constitute the Group's statutory accounts for the 52 weeks ended 29 March
2025, or the 52 weeks ended 30 March 2024 within the meaning of sections 434
of the Companies Act 2006, but is derived from those accounts.
The audited accounts for the 52 weeks ended 29 March 2025 will be posted to
all shareholders in due course and will be available on the Group's website.
The auditors have reported on those accounts and expressed an unmodified audit
opinion which did not contain a statement under section 498 (2) or (3) of the
Companies Act 2006.
The financial information for the 52 weeks ended 30 March 2024 is derived from
the statutory accounts for that year, which have been delivered to the
Registrar of Companies. The auditors have reported on those accounts and
expressed an unmodified audit opinion which did not contain a statement under
section 498 (2) or (3) of the Companies Act 2006
Selected explanatory notes are included to explain events and transactions
that are significant to an understanding of the changes in financial position
and performance of the Group.
The condensed consolidated financial statements have been prepared in
accordance with UK adopted international accounting standards and with those
parts of the Companies Act 2006 applicable to companies reporting under IFRS.
The condensed consolidated set of financial statements have been prepared
applying the accounting policies and presentation that were applied in the
preparation of the Group's published consolidated financial statements for the
52 week period ended 29 March 2025. They do not include all the information
required for full annual financial statements, and should be read in
conjunction with the consolidated financial statements of the Group for the 52
week period ended 29 March 2025.
The consolidated financial statements of the Group for the 52 week period
ended 29 March 2025 are available upon request from the Company's registered
office Burneside Mills, Kendal, Cumbria, LA9 6PZ or at www.jamescropper.com
(https://url.avanan.click/v2/r02/___http:/www.jamescropper.com/___.YXAxZTpzaG9yZWNhcDphOm86ODA5YTU2MTJmZDgwZjlkZjc2MTQ2NjI2MDU1YWI1YWY6NzoxOTE5OjQyYmQ4OTZhMGFiMWFhZjI2OTY2OTBhMWM0ODM2NjZlZDA1NmRhMDIxYWE5NWUwOTE3Njg0ZWM0ZTBkODNkODQ6cDpGOk4)
.
The financial information is presented in Sterling and all values are rounded
to the nearest thousand pounds (£'000) except where otherwise indicated.
Going concern
The Group sets an annual budget and longer-term plan against which performance
is compared. The Board operates a monthly reporting and quarterly
forecasting cycle, which it uses to monitor profitability and liquidity and
ensure the Group has sufficient debt facilities to enable its ongoing
viability.
The Board believes that a 14-month planning horizon to 26 September 2026,
based on the Board approved annual budget and plan, is an appropriate period
over which to evaluate the Group's ability to continue as a going concern.
In carrying out its going concern evaluation the Board prepared base case
profit and loss account, balance sheet and cash flow forecasts for the period
to 26 September 2026 reflecting the Board approved annual budget and plan,
updated to include the expected decline in revenue with a significant merchant
customer of the Paper & Packaging business that the Group was notified of
recently. The base case forecasts reflect initiatives to improve performance
of the Paper & Packaging business that have been implemented and are
currently progressing as planned. These initiatives include improved raw
material management, more efficient energy usage, streamlining of the indirect
management structure and improved procurement.
The Board assessed various downside sensitivities, including modelling a
severe but plausible downside forecast that reduced revenue and gross margins
significantly below the levels assumed in the base case forecast. The Board
also carried out a reverse stress test to identify the extent to which
revenue, profit and cash generation would have to fall in order to cause
challenges to liquidity or bank covenant compliance.
In carrying out these assessments the Board considered recent trading and cash
flow performance, market and customer risks and the potential impact of US
tariffs on future revenue, as well as opportunities to improve revenue, reduce
costs and increase profit and cash performance and the likely level of capital
expenditure required across the forecast period. As a result the severe but
plausible downside forecast and reverse stress test included a number of
direct and indirect cost mitigations, including savings in labour, repair and
maintenance and overhead costs, in addition to the underlying performance
improvements included in the base case forecasts.
While additional revenue opportunities have been and are being developed in
the Paper and Packaging business these may not fully offset the expected
decline in revenue with the loss of the significant merchant customer referred
to above. In preparing the severe but plausible downside forecast and
reverse stress test the Board made the judgment that, in the event additional
revenue does not offset the lost business, the operating and overhead cost
mitigations available will allow the Group to remain compliant with bank
covenants and retain adequate liquidity.
As part of its risk mitigation strategy and to provide additional headroom in
potential downside scenarios, the Group has agreed a reduction in quarterly
amortisation on its UK bank loan from £750,000 to £400,000 for the six
quarterly payments falling due from June 2025 to September 2026 inclusive.
This has been included in the base case forecast, the severe but plausible
downside forecast and the reverse stress test.
Based on this evaluation the Directors consider that the Group and company
will have sufficient funds to continue to meet their liabilities as they fall
due for at least 12 months from the date of approval of the financial
statements. Therefore, the Directors have adopted the going concern basis in
preparing the financial statements.
Significant accounting policies
The accounting policies applied by the Group in these condensed consolidated
financial statements are the same as those applied by the Group in its
consolidated financial statements as at and for the 52 week period ended 29
March 2025.
2. Accounting estimates and judgements
The preparation of the financial statements requires management to make
judgements, estimates and assumptions that affect the application of
accounting policies and the reported amounts of assets and liabilities, income
and expenses. Actual results may differ from these estimates.
The preparation of financial statements in conformity with IFRS requires the
use of estimates and judgements that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts
of revenue and expenses during the reporting period.
Although these estimates are based on management's best knowledge of the
amount, event or actions, actual results ultimately may differ from those
estimates.
The Group's key sources of significant estimates are as detailed below:
(i) Retirement benefits
IAS 19 Employee Benefits requires the Group to make assumptions including, but
not limited to, rates of inflation, discount rates and life expectancies.
The use of different assumptions, in any of the above calculations, could have
a material effect on the accounting values of the relevant Statement of
Financial Position assets and liabilities which could also result in a change
to the cost of such liabilities as recognised in profit or loss over time.
These assumptions are subject to periodic review. The Group takes specialist
advice and seeks to follow the most appropriate method, applied consistently
from year to year.
(ii) Contingencies
The Group has identified that the historical valuation of the defined benefit
pension obligation did not capture the potential additional liabilities
arising in relation to the normal retirement dates for male and female members
of the Staff Scheme.
An estimate of the additional liability has been included in the financial
statements since year ended 31 March 2019. An allowance of 0.15% of
liabilities has been included in the valuation. If the ultimate impact is
greater or lesser, the difference will be taken as an experience adjustment
through the Other Comprehensive Income in the relevant year.
(iii) Impairment
IAS 36 requires an entity to assess whether there is any indication that an
asset may be impaired. The Group considers that four successive years of
operating losses and the underlying market conditions that have contributed to
those losses are an indication of potential impairment of the fixed assets in
the Paper & Packaging CGUs. Therefore, an impairment review was carried
out, which resulted in an impairment of £7.2m being recognised against the
carrying value of the property plant and equipment and right-of-use assets in
the Paper & Packaging CGUs.
The impairment review required the Group to make assumptions including, but
not limited to, future revenue growth rates and the discount rate to apply to
future cash flows. The use of different assumptions could have a material
effect on the impairment charge included in the Group Statement of
Comprehensive income and the fixed asset carrying value included in the
Statement of Financial Position.
The Group considered various scenarios and market sensitivities in assessing
the future revenue growth rate assumptions to use in the impairment
calculation. The Group took specialist advice to determine the discount rate
to apply to future cash flows.
In accordance with IAS 36, the likely loss of a proportion of revenue with a
significant customer of the Paper & Packaging business, as set out in note
12, was not reflected in the impairment calculation as the company was
notified of this after the balance sheet date and is considered to be a
non-adjusting post balance sheet event.
Similar judgements were made by the parent company in relation to the
investments in subsidiary undertakings and amounts owed by group undertakings,
resulting in impairments in accordance with IAS 36 and IFRS 9.
(iv) Recognition of deferred tax asset
IAS12 permits a deferred tax asset to be recognised to the extent that it is
reasonable to assume the asset will be recovered in the foreseeable future.
At 29 March 2025, the Group recognised a deferred tax asset of £5.2m (30
March 2024: £5.4m). A deferred tax asset of £4.0m (30 March 2024: £4.3m)
has been recognised in respect of the deficit on the Group's defined benefit
pension schemes as the Board considers this asset will be realised in full as
the Group has an obligation to eliminate the underlying pension scheme
deficit. A deferred tax asset of £1.2m (30 March 2024: £1.1m) has been
recognised in respect of brought forward tax losses, based on forecast taxable
profits over the next three years.
3. Risks and uncertainties
The Board considers that the principal risks and uncertainties include Health
and Safety, People, Finance and Treasury, Market, Customer, Security of
Supply, IT Systems and Network Security, Input Costs and Legal and
Regulatory. For more information see pages 40-45 of the 2025 Annual Report
and Accounts.
4. Alternative performance measures
The Company uses alternative performance measures to allow users of the
financial statements to gain a clearer understanding of the underlying
performance of the business.
Profit before tax represents the Group's overall performance and financial
position, however it contains significant non-operational items relating to
IAS 19 that the Directors believe make year-on-year comparison of performance
challenging.
Measures used to evaluate business performance are 'Adjusted operating profit'
(operating profit excluding the impact of IAS 19 and exceptional costs), and
'Adjusted profit before tax' (profit before tax excluding the impact of IAS 19
and exceptional costs). The alternative performance measures are reconciled in
note 9.
5. Earnings per share
The calculation of basic earnings per share is based on earnings attributable
to ordinary shareholders divided by the weighted average number of shares in
issue during the year. The calculation of diluted earnings per share is based
on the basic earnings per share adjusted to assume conversion of all dilutive
options.
6. Segmental information
IFRS 8 Operating Segments requires that entities adopt the 'management
approach' to reporting the financial performance of its operating segments.
Management has determined the segments that are reported in a manner
consistent with the internal reporting provided to the chief operating
decision maker, identified as the Executive Committee that makes strategic
decisions. The committee considers the business principally via the three main
operating segments, principally based in the UK:
a) James Cropper Paper & Packaging (Paper & Packaging): comprising
James Cropper Speciality Papers Limited, a manufacturer of specialist paper
and boards, James Cropper Converting Limited, a converter of paper, and James
Cropper 3D Products Limited (Colourform(TM)), a manufacturer of moulded fibre
products.
b) James Cropper Advanced Materials (Advanced Materials): comprising Technical
Fibre Products Limited and its subsidiaries - manufacturers of advanced
materials.
c) Group Services - comprises central functions providing services to the
subsidiary companies.
Revenue Adjusted operating profit / (loss)
2025 2024 2025 2024
£'000 £'000 £'000 £'000
Paper & Packaging 63,657 68,465 (4,142) (5,138)
Advanced Materials 35,686 34,503 8,992 7,715
Group services - - (2,242) (600)
99,343 102,968 2,608 1,977
7. Dividend
The Directors are not proposing a final dividend in respect of the period
ended 29 March 2025 (2024: nil per share). The total dividend declared for the
period is nil pence per share (2024: 3.0 pence per share).
8. Retirement benefit obligations
Movements during the period in the Group's defined benefit pension schemes are
set out below:
2025 2024
£'000 £'000
Net obligation brought forward (17,293) (16,140)
Expense recognised in the income statement (1,126) (1,181)
Contributions paid to the schemes 1,827 1,815
Actuarial gains / (losses) 678 (1,787)
Net obligation carried forward (15,914) (17,293)
9. Alternative performance measures
2025 2024
£'000 £'000
Adjusted operating profit 2,608 1,977
Net IAS 19 pension adjustments 25 6
Exceptional Items: (7,229) (5,010)
Operating loss (4,596) (3,027)
2025 2024
£'000 £'000
Adjusted profit before tax 1,345 758
Net IAS 19 pension adjustments:
current service costs 25 6
finance costs (829) (753)
Exceptional items: (7,229) (5,272)
Loss before tax (6,688) (5,261)
10. Exceptional items
2025 2024
£'000 £'000
Restructuring costs - 2,309
Impairment of property, plant and equipment 6,914 4,427
Impairment of right-of-use assets 315 -
Earn-out adjustment on contingent consideration on business acquisition (422)
Flood settlement costs 100
Pension settlement (income) (1,404)
Exceptional items in operating costs 7,229 5,010
- 262
Fair value adjustment on contingent consideration
Exceptional items in interest payable and similar charges - 262
During the year the Group recognised impairment losses in the Paper &
Packaging business CGUs of £6,914k (2024: £4,427k) and £315k (2024: £0k)
on property, plant and equipment and right-of-use assets respectively.
The adjustments above are treated as exceptional items as they distort the
underlying operating profitability of the Group and make year on year
comparison of performance challenging.
11. Related parties
There have been no significant changes in the nature of related party
transactions in the period ended 29 March 2025 from that disclosed in the 2024
Annual report.
12. Events post the reporting period
Subsequent to the period end, the Company received notice that a significant
merchant customer of the Paper & Packaging business would no longer source
certain coloured paper ranges from James Cropper, effective from that date.
As part of the announced Paper & Packaging improvement plan the Group is
expected to incur restructuring costs of £450k in FY26. This figure could
increase and is subject to future developments as set out in the going concern
disclosure.
In June 2025, the Company received £1.5m in proceeds from the sale of certain
non-core intellectual property assets associated with a manufacturing process
developed by the Company's Centre for Innovation.
Statement of Directors' responsibilities
The Directors confirm that these condensed consolidated financial statements
have been prepared in accordance with International Financial Reporting
Standards as adopted by the European Union and that the preliminary report
includes:
- An indication of important events that have occurred during the period and
their impact on the condensed set of financial statements, and a description
of the principal risks and uncertainties for the financial period; and
- Material related party transactions in the period and any material changes
in the related party transactions described in the last Annual Report.
The Directors of James Cropper Plc are detailed on our Group website
www.jamescropper.com
(https://url.avanan.click/v2/r02/___http:/www.jamescropper.com/___.YXAxZTpzaG9yZWNhcDphOm86ODA5YTU2MTJmZDgwZjlkZjc2MTQ2NjI2MDU1YWI1YWY6NzoxOTE5OjQyYmQ4OTZhMGFiMWFhZjI2OTY2OTBhMWM0ODM2NjZlZDA1NmRhMDIxYWE5NWUwOTE3Njg0ZWM0ZTBkODNkODQ6cDpGOk4)
Forward-looking statements
Sections of this financial report may contain forward-looking statements with
respect to the Group's plans and expectations relating to its future
performance, results, strategic initiatives, objectives and financial
position, including liquidity and capital resources. These forward-looking
statements are not guarantees of future performance. By their very nature, all
forward-looking statements involve risks and uncertainties because they relate
to events that may or may not occur in the future and are or may be beyond the
Group's control. Accordingly, the Group's actual results and financial
condition may differ materially from those expressed or implied in any
forward-looking statements. Forward-looking statements in this financial
report are current only as of the date on which such statements are made. The
Group undertakes no obligation to update any forward-looking statements, save
in respect of any requirement under applicable law or regulation. Nothing in
this announcement shall be construed as a profit forecast.
Annual General Meeting
The Annual General Meeting is expected to be held on or around 3 September
2025. The notice of Annual General Meeting will be sent to shareholders before
5 August 2025 together with a copy of the 2025 Annual Report.
Content of this report
The financial information set out above does not constitute the Group's
statutory accounts for the 52 week period ended 29 March 2025 or the 52 week
period ended 30 March 2024 but is derived from those accounts.
Statutory accounts for the 52 week period ended 30 March 2024 have been
delivered to the Registrar of Companies. The auditor, Grant Thornton LLP, has
reported on the 2024 accounts; the report (i) was unqualified, (ii) did not
include a reference to any matters to which the auditor drew attention by way
of emphasis without qualifying their report, and (iii) did not contain a
statement under section 498 (2) or (3) of the Companies Act 2006.
The statutory accounts for the 52 week period ended 29 March 2025 will be
delivered to the Registrar of Companies following the Annual General Meeting.
The auditor, Grant Thornton UK LLP, has reported on these accounts; their
report (i) is unqualified, (ii) does not include a reference to any matters to
which the auditor drew attention by way of emphasis without qualifying their
report, and (iii) does not include a statement under either section 498 (2) or
(3) of the Companies Act 2006.
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