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Paper profits at James Cropper

The advanced paper products outfit has had an excellent year, irrespective of a soft comparable in 2016
June 28, 2017

Last year was "something of a watershed" for paper and packaging specialist James Cropper (CRPR), according to chairman Mark Cropper. Commenting on the publication of results for 2016-17, the great, great, great grandson of the company's founder and namesake said investments and prior successes "are beginning to deliver a level of potential we have felt possible for so long".

IC TIP: Hold at 1630p

That's an appropriately vague statement. The step change in the operating profit margin - from 5.3 to 6.7 per cent - was helped by a soft comparison in the prior year, when flooding caused by Storm Desmond at the end of 2015 forced the business to book a £1.8m hit.

Still, there are definitely reasons for excitement. After increasing capital expenditure by 29 per cent to £5.3m, the 3D products division is now fully commissioned, and even notched up its first sales in the period. Orders for technical fibre products have increased due to "an upsurge in fuel cell activity". The lower-margin paper division, which accounts for most sales, managed to boost both revenues and profitability. In fact, the only blight on the accounts was a sharp rise in the pension deficit, from £6.5m to £15.6m at the beginning of April.

Stockdale Securities expects pre-tax profits of £7.2m in the year to March 2018, leading to adjusted EPS of 62.1p, up from £5.8m and 48.6p in 2017.

 

JAMES CROPPER (CRPR)

ORD PRICE:1,630pMARKET VALUE:£155m
TOUCH:1,610-1,650p12-MONTH HIGH:1,645pLOW: 718p
DIVIDEND YIELD:0.7%PE RATIO:32
NET ASSET VALUE:230pNET DEBT:34%

 

 

Year to 1 Apr*Turnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
201379.21.2510.17.9
201484.51.3115.47.9
201583.12.5820.88.5
201687.93.8732.69.3
201792.45.6450.511.8
% change+5+46+55+27

Ex-div: 13 Jul

Payment: 11 Aug

*Period to end-March 2013, 2014 & 2015; 53-week period to 2 April 2016.