Technical fibre products have proven a winner for paper and packaging group James Cropper (CRPR) and strong demand for these high margin, specialist items sent the division’s operating profits up by a quarter to £7.4m in the year to March 2018. The growth in fuel cell technology (the manufacture of which requires technical fibre) is the main contributor to the rising interest in James Cropper’s products, leading management to predict the need for further manufacturing capacity by 2020.
But despite this division’s strong contribution to profits, it only generates a quarter of group revenues, meaning its growth has not been enough to offset challenges elsewhere. In the core paper business, revenues were flat, while a rise in pulp prices sent material costs up by £3.5m. Operating profits in the division therefore halved.
Things were no better in the 3D products division, where management cited significant market interest, but admitted commercialisation was taking longer than anticipated. With just £166,000 of revenue, the division remains loss making and therefore dragged group operating profits down to £5.4m, compared to £6.2m in 2017.
Broker Stockdale Securities is forecasting a pre-tax profit of £6m in 2019, giving EPS of 52.1p (2018: £5.8m, 56.8m).
| JAMES CROPPER (CRPR) | ||||
| ORD PRICE: | 1,420p | MARKET VALUE: | £ 135m | |
| TOUCH: | 1,370-1,470p | 12-MONTH HIGH: | 1,953p | LOW: 1,355p |
| DIVIDEND YIELD: | 1.0% | PE RATIO: | 33 | |
| NET ASSET VALUE: | 246p | NET DEBT: | 21% | |
| Year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2014 | 84.5 | 1.31 | 15.4 | 7.9 |
| 2015 | 83.1 | 2.58 | 20.8 | 8.5 |
| 2016 | 87.9 | 3.87 | 32.6 | 9.3 |
| 2017 (restated) | 92.4 | 5.54 | 49.4 | 11.8 |
| 2018 | 92.3 | 4.54 | 43.3 | 13.5 |
| % change | -0 | -18 | -12 | +14 |
| Ex-div: | 05 Jul | |||
| Payment: | 10 Aug |
