REG - Cropper(James) PLC - Trading Update and Overview of Strategy

James CropperAnnouncement

19/04/2023 07:00

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RNS Number : 6601W  Cropper(James) PLC  19 April 2023

   19 April 2023

James Cropper plc

('James Cropper', the 'Company' or the 'Group')

Trading Update

and

Strategy for Accelerated Revenue and Profit Growth

James Cropper plc (AIM:CRPR), a global market leader in advanced materials,
luxury packaging and paper products, today provides a trading update and
overview of the strategy to accelerate revenue and profit growth across the
Group.

Trading Update: exceeding PBT expectations

The Board is pleased to announce an improved trading performance in the second
half of the financial year ended 1 April 2023. The Company, subject to audit,
expects to generate £130 million revenue for FY23 and an adjusted profit
before tax of not less than £2.2 million, exceeding market expectations of
£2.0 million.

Strategy Update: a new business model to accelerate revenue and profit growth

The Company has made significant progress since 2022 in repositioning James
Cropper to capitalise on growth opportunities within its core and emerging
end-markets. The fast-growing renewable energy and decarbonisation markets are
creating an ever-greater need for novel and high-performance materials, while
sustainable fibres, and low, or zero, carbon processing are driving growth
within paper and packaging.

In order to position the company to accelerate growth, the Group is today
announcing three strategic changes:

1.    Brand profile: reorganisation and renaming.

2.    A step change of investment in innovation and systems.

3.    Streamlining the Paper division to improve productivity and margins.

Brand profile: reorganisation and renaming

The Group will invest in the James Cropper brand by reorganising itself from
three separate divisions (James Cropper Paper, Technical Fibre Products and
Colourform) into four market-facing segments all under the Group name:

·    James Cropper Creative Papers

The Group's historic business supplying specialist paper markets with a world
leading range of coloured and embossed papers, and unique sustainable fibre
options including CupCycling.

 

·    James Cropper Luxury Packaging

Incorporating James Cropper's multi-award winning Colourform moulded pulp
innovation and the packaging papers made for the world's leading luxury
brands.

 

 

·    James Cropper Technical Fibres

Core technical fibre markets including aerospace, defence, construction and
industrial.

 

·    James Cropper Future Energy

Incorporating TFP Hydrogen, and including materials and products for fuel
cells, carbon capture, batteries and wind.

The above segments will be managed under two Managing Directors covering paper
products and advanced materials respectively.

The new brand strategy positions the Company across an exciting spectrum from
heritage to cutting edge and leverages the brand value of the James Cropper
name across all markets and geographies.

This will also generate a more focused operation and streamlined cost base
with greater collaboration and sharing of functions across the Group.

The reorganisation and renaming will be delivered within the remainder of this
calendar year.

Investment in innovation and systems

The strategy will realise greater synergies across the Group, supported by a
multi-million pound investment in the next three years that will simplify
processes and systems and combine Group functions. In turn this will enable
smarter access to data and inform leaner working practices allowing the Group
to operate more efficiently.

To drive future growth through innovation, the Board has made a senior level
appointment with the move of Patrick Willink to the new position of Chief
Innovation Officer, starting immediately. Patrick will lead a Centre for
Innovation at James Cropper, bringing a wealth of experience to this role, as
former Paper Operations Director, Group Chief Technology Officer, and most
recently Managing Director of Colourform, the Group's award-winning luxury
packaging division.

The Innovation team will be scaled up to play a critical part in ensuring
James Cropper will meet the anticipated demands of future markets and
customers, whether technical, environmental or economic, to drive costs down
and volumes up. Activities will include: delivering ambitious plans to
decarbonise the Group's operations; making ever greater use of recovered
fibres; and helping to create technology roadmaps in emerging markets such as
green hydrogen, fuel cells and carbon capture.

Streamlining the Paper division

Another key element of the Group's strategy will be significant changes to the
Paper division.  In order to create a more resilient and higher margin
business that is less exposed to the multiple headwinds it has faced for many
years, the Group is proposing to reduce the number of paper machines in
operation from four to three, with two machines anticipated to be in
production at any one time.

Together with the reorganisation and streamlining of Group functions and
related investment (as outlined above), this will lead to a change in overall
headcount, and accordingly the Company has today submitted an advance
notification of redundancies, with a 90-day consultation period commencing
with immediate effect. Overall, approximately 10% of employees will
potentially be affected, predominantly within the Paper and Group functions at
a cost of £2.1m, of which the majority will be cash.

Timing of annual results

The Company has recently appointed Grant Thornton UK LLP as auditors and as
this will be the first year audit with the new team, expects that the annual
accounts for the year ended 1 April 2023 will be announced later than
historically reported. An update will be made in due course once the specific
date is known.

James Cropper Chief Executive Officer, Steve Adams said: "After a year in
which the Company has faced unprecedented challenges, I am extremely grateful
to the whole team for helping to exceed against our revised expectations.
However, moving forward, we must continue to be mindful of future headwinds
and drive margin improvement."

"We're a purpose-driven business built on strong values and announcing
potential job loses is not a decision taken lightly.  We will work
collaboratively with our employees, unions, and representatives throughout
this process.  Change is difficult yet it is essential to ensure the
sustainability and growth of James Cropper."

"Our strategic realignment will drive margin improvements by bringing greater
focus on our customers and allow us to take better advantage of our size and
remain agile and dynamic in our markets.  Combined with our wealth of
manufacturing knowledge, sustainability alternatives and pioneering abilities
we will strengthen our position across multiple sectors as the preferred
global partner of choice."

Commenting on the Strategy Update, James Cropper Chairman, Mark Cropper added:
"The next few years should see breakout growth in many areas as we truly live
our purpose and help the world shift to a low carbon economy in better balance
with nature.  Nevertheless, we have become increasingly aware that this will
not be achieved without more robust and efficient systems, greater
collaboration across our different businesses, and a resizing of our Paper
business to make it more consistently profitable and sustainable."

-ENDS-

 

Enquiries:

 James Cropper plc

 Rosina Merrett

 Mob: +44 (0) 7500 083559

 Rosina.merrett@cropper.com

 www.jamescropper.com (http://www.jamescropper.com)

 Shore Capital - (NOMAD and Broker)

 Robert Finlay, Henry Wilcocks, John More, Lucy Bowden

 Tel: +44 (0) 7601 6100

 Buchanan Communications - Financial PR

 Chris Lane, Charles Ryland, Jamie Hooper, Verity Parker

 jamescropper@buchanancomms.co.uk

 Tel: +44 (0) 207 466 5000

 

The information contained within this announcement is deemed to constitute
inside information as stipulated under the retained EU law version of the
Market Abuse Regulation (EU No. 596/2014) (the "UK MAR") which is part of UK
law by virtue of the European Union (Withdrawal) Act 2018. The information is
disclosed in accordance with the Company's obligations under Article 17 of the
UK MAR. Upon the publication of this announcement, this inside information is
now considered to be in the public domain.

Notes for editors:

James Cropper is a market leader in advanced materials and paper products. Led
by the Cropper family for six generations, the business has an international
workforce and an operational reach in over 50 countries.

Established in 1845, the Group manufactures paper, packaging and advanced
materials incorporating pioneering non-wovens and electrochemical coatings.

James Cropper is a specialist provider of niche solutions tailored to a unique
customer specification, ranging from substrates and components in hydrogen
electrolysis and fuel cells to bespoke colours and textures in paper and
moulded fibre packaging designed to replace single use plastics.

The Group operates across multiple markets from luxury retail to renewable
energy. It is renowned globally for service, capability, pioneering and multi
award-winning commitment to the highest standards of sustainability.

James Cropper's goal is to be operationally carbon neutral by 2030 and to
reduce carbon through its entire supply chain to net zero by 2050.

 

 

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