James Cropper’s (CRPR) technical fibre products (TFP) division recorded its best ever sales performance at the half-year, with a 5 per cent rise on last year’s half-year contributing to a lift in overall revenues for the paper manufacturer and supplier.
The group expects TFP’s good run to continue through its second half, while plans to add 50 per cent to the division’s capacity remain on course. In June, James Cropper flagged that higher-than-expected pulp prices had increased cost pressures on the company’s paper business over two years, and, critically, it had failed to pass all of these costs on to customers. But pricing conditions have since improved, and chairman Mark Cropper said that “paper sales are projected to grow year on year with the benefits of an improved mix and a softening of pulp price leading to a return to profit”.
In recent years, paper and packaging businesses have come under intense pressure over the environmental impact of their products. Mr Cropper said that an environmental, social and corporate governance (ESG) committee has been put in place, and the company “will commence formal measurement and reporting in line with ESG objectives in 2020”.
Bloomberg consensus forecasts predict March 2020 adjusted EPS of 47.4p, rising to 60.2p in FY2021.
| JAMES CROPPER (CRPR) | ||||
| ORD PRICE: | 1,400p | MARKET VALUE: | £134m | |
| TOUCH: | 1,380-1,420p | 12-MONTH HIGH: | 1,400p | LOW: 900p |
| DIVIDEND YIELD: | 1% | PE RATIO: | 49 | |
| NET ASSET VALUE: | 229p | NET DEBT: | 47%* | |
| Half-year to 28 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2018 | 50.3 | 1.4 | 12.9 | 2.50 |
| 2019 | 52.8 | 2.0 | 17.0 | 2.50 |
| % change | +5 | +42 | +32 | - |
| Ex-div: | 28 Nov | |||
| Payment: | 10 Jan | |||
| *Excludes lease liabilities of £4.2m | ||||
