Shares of James Cropper plc, the Kendal-based paper, packaging and advanced materials company, fell as much as 20% after it warned that “as a result of the prolonged weakness in Paper & Packaging market conditions, the board now expects that the group’s results for FY25 will be below its prior expectations.”
Cropper said its revenue for the six months to September 30, 2024, fell 11.7% to £49.9 million.
The Kendal firm said first-half adjusted loss before tax was £200,000 compared to adjusted profit before tax of £2.4 million in H1 of the previous year.
No interim dividend is proposed (H1 FY24: 3.0 pence per share).
The firm reported improved net debt of £13.1 million, down from £15.5 million at the year-end “with continued careful control of working capital and capital expenditure of £0.6m (H1 FY24: £1.4m).”
On current trading and outlook, Cropper added: “Advanced Materials H1 FY25 revenue growth momentum is expected to continue through H2 based on forecast customer projects, with the outlook in aerospace, defence, construction and hydrogen PEM electrolyser remaining strong.
“Challenging conditions remain in the Paper & Packaging business due to the ongoing fragility in the luxury packaging sector and customers in the photographic board sector recently forecasting reduced revenues for the remainder of FY25.”
In October, Cropper named David Stirling as its new CEO, taking over from Steve Adams early next year.
Stirling was most recently Chief Executive Officer at Zotefoams plc, a listed pioneer in cellular materials, a position he held for 24 years.
Current CEO Adams said: “Although trading was challenging in the first half of the financial year, the group was able to achieve sequential growth in revenue and profit with clear signs of recovery across most segments of the business.
“The Advanced Materials business continues to benefit from its focus on end-markets with strong secular growth trends, and it is demonstrating traction in its growth strategy with an expanding portfolio of opportunities in new technologies and markets.
“The Paper & Packaging business has seen slower recovery due to ongoing global market softness in some of its key sectors. Tight cost control and mitigation efforts are in place to defend margins especially whilst input costs continue to fluctuate.
“Our teams have worked diligently to maintain value through new business development activities, preserving and strengthening our existing customer relationships through enhanced collaboration and partnership, and remaining steadfast in our focus to leverage our capabilities through new product and technology development, underpinned by our strong brand presence.
“The fact that our direct customer base remains stable and intact, and that we are seeing positive trends in various end markets, gives us confidence that the Group is positioned for growth once end market conditions stabilise and improve.
“As announced in October, I retire from the board in early 2025 after seven years on the group board. I very much look forward to supporting my successor David Stirling in achieving a smooth transition and am confident that the group will thrive under his leadership.”