James Cropper lowers dividend, expectations after tough first half

The AIM-traded firm said its adjusted operating profit came in at £0.5m for the period ended 24 September, down from £2.5m, while demand remained “strong”, with revenue growth across each of its three divisions.

Adjusted profit before tax was nil, down from £2.3m a year earlier, due to energy inflation and raw material price increases.

The company made an exceptional cost provision of £0.5m for contingent consideration, as TFP hydrogen projections increased, while cost-of-living payments totalling £0.7m were paid to support its employees.

The board declared an interim dividend of 2p per share, down from the 2.5p distribution it made at the half-year last year.

Its expectations for the full 2023 financial year had been lowered, with an adjusted profit before tax of £2m pencilled in, compared to previous market expectations of £5.4m.

Cropper said capital investments in energy saving improvements to paper machines were delivering an annualised reduction in site energy consumption of between 5% and 7%.

The firm’s decarbonisation project investment was now moving to the planning application phase, while Steve Adams was appointed as its chief executive officer on 10 August.

“While short term profitability has been impacted, the decisive actions taken combined with the ongoing investments across the group has strengthened our long term growth prospects and we fully expect to return to profitability in the next six months,” said chairman Mark Cropper.

“This company is built on a strong heritage of innovation and a relentless focus on quality, which places us in a very strong position as we evolve and create a sustainable future.”

At 1236 GMT, shares in James Cropper were down 7.1% at 850p.

Reporting by Josh White for Sharecast.com.