Paper pulp prices have fallen significantly this year. It could help margins. |
They must get the paper division contributing to EBITDA at the very least quickly as increasing debt from current levels is not sustainable for much longer. It's a not a bad strategy to have a division that not growing but throwing off cash financing growth elsewhere but the risk is paper drags the company down |
Increasing capacity in the NY site to support 600MW of electrolyser output, customer demand in NA. |
Further reading: |
 Shore Capital-
Technological breakthrough at TFP Hydrogen James Cropper (Cropper), a global market leader in advanced materials, luxury packaging and paper products has announced that its wholly-owned subsidiary, TFP Hydrogen Products has unveiled its latest technological breakthrough - the TFP Hydrogen Modular Production Unit (MPU). This innovative solution represents a significant stride towards enabling rapid scalability for PEM (proton exchange membrane) electrolyser manufacturing. There is currently much more demand for hydrogen than there is capacity to produce it, in our view. The MPU has been designed to operate close to customers and component suppliers, streamlining the supply chain for PEM electrolyser manufacturers. By shortening the supply chain and optimising logistics, the MPU significantly augments response rates while ensuring uninterrupted operations. Furthermore, the MPU can be swiftly commissioned and fully operational within six to twelve months. The coating technology developed by TFP Hydrogen plays a central role in enhancing the durability of the components, shielding against corrosion and minimising contact resistance; ultimately improving the overall operational efficiency and extending the lifetime of the electrolyser, thereby driving down long-term costs associated with green hydrogen production. We note Steve Adams, Cropper’s CEO’s comment: "This is an important step forward in our innovation roadmap to support the hydrogen economy and TFP Hydrogen's introduction of the MPU underscores the Company's position as an industry trailblazer and demonstrates our critical role in driving the clean energy transition." We highlighted Cropper in our thematic hydrogen note last week “Dawn of commercialisation are the stars aligned for hydrogen?” Cropper’s FY23A results on Thursday 24 August delivered an adjusted profit beat for FY23A and highlighted the significant progress the company has made with its accelerated profits growth strategy since Steve Adams became CEO in August last year. The results presentation included a forecast of a 60% CAGR for hydrogen electrolysers over the coming years and today’s announcement indicates that TFP Hydrogen should be well-placed to benefit from this growth. |
Investor Meet presentation ~ Its clear the paper division has proved a drag on performance over the years, it's still a major part of group revenues but just not profitable hence restructuring going ahead; however luxury packaging is a good market. There are some interesting growth divisions here including hydrogen. This is a company that invests quite heavily in its business but I think investors need to see improved financial results come through. |
One share £8 moved the market cap £800
Every £1 spent on shares moved the market cap £100
Approximately
Similar price movement last month |
Now that's what you call gearing. Every share purchase (if all buys) had a £100 influence. Shame it works both ways though. |
"very illiquid"
Less than £70k of trades moves the market cap up £7m |
I notice on the company website they have been awarded a gold sustainability rating this morning, wouldn't have thought that alone would cause such a bounce? https://www.jamescropper.com/news/james-cropper-is-awarded-gold-in-sustainability |
garth:- Interesting - Thanks - But also seems to be a very illiquid market so could there be a tip out there somewhere? |
Hydrogen tech lurking in the background added to the already established advanced materials expertise? Causing interest? |
So why the bounce this morning? |
"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"
Sounds more like potential one-off opex through the investment period, rather than capex.
Eric |
Given they invested 6mm last year and 3mm the year before, I'm not sure the multi-million pound investment over 3 years will involve a stepup in their normal capex run rate. |
Was planning to start a small position yesterday but could not get my price target.
Price is higher today but rise is not convincing.
"a multi-million pound investment in the next three years" changes this from a simple energy and input cost recovery play to more of a restructure story which may take several years and eat into this and next years profit forecasts.
"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."
From CRPR annual report 2022, CRPR employed 587 full time equivalents costing £30.5m |
Proposed changes do look necessary, feel for those made redundant though. |
They have to prove it's not just deck chair moving. Doesn't look like that but this market won't believe much until it sees it happen with a positive result,imho. |
Sound of tentative grasping of nettles..
Not sure what the new reporting regime is about but not unexpected as new CEO makes his mark.
Happy to sit on the sidelines and watch as market forecasts for 2023/24 are ambitious. |
A reduction in the paper division size with some redundancies, the rest looks fine but really need better informed comment to be made. |
Trading Update and Overview of Strategy |
Any idea to what extent the TFP ans Colourform profitability is reliant on Paper. I.e. are their favourable pricing mechanisms that mean that you can't just split out TFP and expect to retain the same profitability?
Also still think that this isn't at all cheap on a cash flow basis or if we adjust the EV for pension and debt
Eric |
Trouble is Adams will defend the division from whence he came
The paper business is heritage running with machinery from the eighties, previous management did an excellent job in in expanding technical fibres and Colourform and delivering profitable growth but that may be why he was moved on.
If they start investing in the paper business then one will become very nervous |
Profits under real pressure of course but what are their assets worth Profits only one angleGotta be a turn around opportunity now or soon if bottom drawer for future |
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