James Cropper posts strong growth despite storm
James Cropper missed week of production and a £770,000 net exceptional cost due to flooding caused by Storm Desmond last year, Cumbrian papermaker James Cropper has posted strong growth in its latest annual results.
James Cropper launched its Porcelain paper range during the financial year
Profit before tax rose sharply by 48%, from £3.5m to £5.2m in the year to April 2016, after exceptionals and before IAS 19 pension adjustments.
James Cropper’s Burnside, Cumbria site was badly affected by the storm, which happened in December 2015, leading to excesses of £15,000 for stocks and £1m for consequential losses. At the time, its share price fell by 5% but have since recovered.
Planned site-wide repair and replacement work totalling £712,000 had to be postponed until the 2016/2017 financial year following the floods to allow maintenance teams to focus on immediate repairs.
James Cropper said it was grateful to Cumbria Local Enterprise Partnership and Cumbria County Council for making payments against a £1m grant to contribute towards uninsured losses.
The board has now approved an additional £1m of capital investment to protect key structures or relocate them away from the flood risk zone in Burnside.
In his chairman's statement, Mark Cropper said: “Hardly a single employee did not contribute to the recovery in some way, and many gave up their Christmas break to get us back on our feet.”
James Cropper also launched its Porcelain paper range in July 2015.
Revenue rose by 6% from £83m to £88m, with shareholder dividends up 9% from the previous year, from 8.5p to 9.3p.
The group's pension deficit also fell £5m to £6.5m.
Much of the sales growth has been put down to a strong year in the Technical Fibre Product (TFP) market. Sales in TFP were up 29% from the previous year, compared to a modest sales rise in James Cropper’s paper arm of around 1%. This accounted for operating profit growth in TFP of 117%, from £2.7m to £5.9m, compared with 7% in paper (£68.5m to £69.1m).