TIDMCRPR
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.
Tr ading 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 GBP130 million
revenue for FY23 and an adjusted profit before tax of not less than
GBP2.2 million, exceeding market expectations of GBP2.0
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 GBP2.1m, 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."
-S-
Enquiries:
James Cropper plc
Rosina Merrett
Mob: +44 (0) 7500 083559
Rosina.merrett@cropper.com
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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