Trading update out.
On the positive side, the underlying business performance before COVID seems good. Pre tax profit above £6m and "well ahead" of market expectations.
On the negative side, they assume the next 9 months to be heavily impacted by COVID and somewhat loss making before recovering. TFP some impact from aero but fuel cells and wind energy resilient. Paper most impacted. Colourform impacted but to still continue growing.
Question for the markets and reaction today is whether to look through this. It is on most other stocks (many of which will be similarly impacted over reasonable timescales) and the market has always been fond of Cropper, so not sure that necessarily changes. If we assume normalised earnings here are 50p and put on 15-20x earnings (has traded well over this range on average over the last few years), gives fair value range of 750 - 1000p. Suspect we stay in that today but maybe ease back 5%. |
TUNG citing increased business as companies move away from paper invoicing. Shouldn't impact CRPR though. Watching to add some more for ltbh. Don't think it's that time yet though.Might well be wrong. It's a great little company. Think we still have a some reckoning to do on global debt. Maybe the Fed will hold it off this time. But a reckoning is coming. Aka Minsky.G. |
TUNG citing increased business as companies move away from paper invoicing. Shouldn't impact CRPR though. Watching to add some more for ltbh. Don't think it's that time yet though.Might well be wrong. It's a great little company. Think we still have a some reckoning to do on global debt. Maybe the Fed will hold it off this time. But a reckoning is coming. Aka Minsky.G. |
 And an update on operations at Cropper from 17th April
We are still operating and distributing products, although we will be changing production capacity in certain areas for a period to balance supply and demand.
Orders remain strong for our Technical Fibre Products, particularly from the green energy sector for materials used in fuel cells and wind turbines. New enquiries are still coming in across the business, including new packaging orders for our Colourform moulded fibre packaging division.
There is lower than normal demand for paper, and from Monday 20 April paper production is being scaled back for four weeks. Sales and Customer Service are operating as normal and we will continue to finish and despatch from stock. During this period, more than 200 employees in the paper division will temporarily move onto the Government’s Job Retention Scheme. Other operations including Technical Fibre Products will continue normal production.
Meanwhile we continue to adhere to Government guidelines during the pandemic, with anyone who can work from home doing so and a number of new measures in place at the mill to protect the safety of staff and the local community. These include PPE masks being available for all employees.
We are actively supporting all staff including providing regular news and updates on our employee social media network, Workplace. Advice and information is available on a number of topics, including health & safety on the coronavirus, help and support networks and tips on working from home or being at home during the lockdown. This employee portal is designed to keep everyone connected in these unprecedented times.
In addition, a dedicated helpline is available through our private health scheme for any members of staff who want to discuss issues such as their mental health.
We send our very best wishes to all of our customers and suppliers and thank you for your continued support.
Think that's all pretty positive really. Especially as we know TFP is the real profit maker in the business. Thanks for the raw material price link, bamboo. |
Liontrust from January
Hold: James Cropper (CRPR)
Stevens classes herself as a “buy and hold” investor, who doesn't like to trade in and out of stocks, even though the micro-cap space can be volatile, which can create trading opportunities. “We like to hold companies for the long term and let the businesses do the work for us by growing,” she says. “ It allows us to be more relaxed about timing, not to worry about when to enter or exit from a position.”
James Cropper has been in the fund since March 2017, and she has topped up the holding along the way. She says: “It’s an interesting business located in the Lake District. They have been producing paper for over 200 years.”
The company has three divisions; the main one makes the low-volume high-quality coloured paper that it’s used in Burberry carrier bags, while the most profitable one is Technical Fiber Products, which provides the aerospace industry with a material made up of carbon fibres called non-woven. “You can find it on the outside of aircrafts made by Boeing and Airbus, and Ferrari and Lamborghini use it in their cars," says Stevens.
The third division is 3D Print, which produces environmentally-friendly paper packaging that substitutes more polluting plastic packaging. Stevens, however, points out that it’s very difficult to make it and keep the colour: “You have some pulp and you crush it under high pressure into shape. But when you crush it, the colour gets lost.” It is the growth of this final division over the next decade that Stevens is particularly excited about and which will ensure she stays invested for the long-term. |
One of the biggest problems facing the co, a year or so before CV, was high input costs as the price of paper pulp soared. Prices of CRPR's main raw materials have dropped significantly over recent months, and this could help towards early reinstatement of the divi, once CV lockdown is over.
Input prices down nearly 40% since the peak. |
I'm in over the last few days. Struggle to get a SOTP implying a market cap of less than around £90m. |
Why is this falling? |
BBC Fake or Fortune featured a painting owned by the Cropper family. On iplayer. |
perverse that they come out with quite poor results and then jump the next day |
I asked my friend about 6 weeks ago who works at croppers how they were doing , he said not very well and were losing money , i will ask for an update this week if i see him |
Also I'd find this chart very useful as a replacement for or addition to the existing very long term one.
Just to put a balancing point of view: I would not find a chart that big at all useful - it doesn't fit even on a fairly large desktop screen without zooming the text down to near-illegibility! And do bear in mind that not everyone who reads these boards has a 6-month investment horizon...
Gengulphus |
Hi garth, I think the broken links, old info, and the very long term chart could all go.
I'd like the link to the wood pulp prices, in 629.
There is also a news section on the co website the could have a link.
Also I'd find this chart very useful as a replacement for or addition to the existing very long term one. |
Alternatively, if anyone wants to post anything down here, I am happy to add it to the header up top. I do keep a regular eye on the thread (helps that it is so quiet!)
G. |
Wood pulp costs continued falling last month.
Now nearly 6% off highs late last year. |
Hi garth, thanks for the reply.
I may start a new thread, but if I did the header would be heavy on the chart and light on fundamentals. Maybe others could vote this post up, if that would be useful.
I note that the co is planning to increase production in tech fibres this year.
e |
Still here but inactive. Out at present. Waiting for a re-entry at some point. Very happy for anyone to start a new thread - way too busy with work at present.
G. |
Looking good.
The header is well out of date. Is garth still around?
Is it worth a new thread? |
stevie, I didn't reply as Gengulphus has provided the info.
Eod close above 1000 gives a new tp of 1072 |
13.5p total for the year ended March 2018, up from 11.8p for the year ended March 2017. Interim (paid in January) not increased since, but it wasn't last year either, so not much to be read into that!
Easily discovered - just click on the Financials button at the top of the page, then scroll about halfway down the page to find an extensive dividend history.
Gengulphus |
what the Divi here Bamboo ? think of taking a few for my sipp. |
Took a few.
Have an apex based potential turn on the chart for 26-27/2/2019 |
hybrasil
TBH I think these still have to fall a fair way further before they are good value.
I quite like the company though but with no end in sight to high pulp prices profit looks like being depressed for some time. Technical fibres seems like a good business though. |
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