Cropper (james) Share Discussion Threads

[thecurrymonster] 01/2/2007 12:36

splendid stuff.

:-)

[garth] 01/2/2007 08:02

Up at the start ;0)

Good trading statement

[hybrasil] 01/2/2007 08:00

I know it took time but tfp is now really beginning to shine - give it another 2 years!

[capercaillie] 11/1/2007 22:03

Retail Manager
£17,000 pa + bonus
The Paper Mill Shop is opening in

The Swindon Designer Outlet in February. We sell
a wide selection of different coloured papers and
cards together with a full and exciting range of craft
accessories.

This job would ideally suit someone with an
interest in card making crafts but full training
will be given to the successful applicant.

Supervisor
£13,000 pa + bonus

We also require a Supervisor who will support and
assist the Retail Manager in the running of this
new shop.

If you wish to apply, please send your
CV to Linda Holme, The Paper Mill Shop,
Burneside Mills, Kendal, Cumbria LA9 6PZ or
e-mail to: [e-mail]
Closing date for applications 23 January 2007.

[thecurrymonster] 10/1/2007 13:11

Fairly big drop today with only small volume.
is the price just drifting on lack of news? or does anybody know anything?

[garth] 04/1/2007 20:37

CR,

I believe they are creating a new online offering - that might explain it?

G.

[cockneyrebel] 11/12/2006 16:13

Seems if you email them from their papermill direct website form, the email bounces back - not very good when that's where they get a lot of enquiries.

CR

[garth] 23/11/2006 12:00

Welcome Maty.

[garth] 21/11/2006 16:39

Nice little tick up to finish the day above 170p :0)

[garth] 21/11/2006 09:19

INTERIM RESULTS:

6.4p eps and a divi. Specialty paper profitable but challenging, TFP storming! :0)


TFP turnover up 26% with profits well ahead.
Speciality Papers profitable in first half.
Full year gas costs anticipated being at last year's level.

"Despite the recent weakening of the US$, growth at TFP has continued. Turnover
was up 26%, with profits well ahead of the comparable period last year. Sales to the US market were 42% up on the first half of the previous year in #Sterling terms, with rest of the world sales also ahead by 14%".

"TFP is expected to perform at levels consistent with the first half for the
remainder of the financial year. TFP's conversion of its strong portfolio of new product developments into commercial opportunities, combined with a well-managed cost base, should continue to drive growth and sustain profitability".

"Although Speciality Papers traded profitably in the first half, outlook remains difficult for the foreseeable future, given the uncertainties surrounding forward quoted energy prices and the upward trend in pulp costs. It should therefore be anticipated, that the profitability of Speciality Papers will deteriorate during the course of the second half-year. Despite these challenging market conditions, the business recovery plan continues to make good progress, with its emphasis on margin growth, improved operational efficiencies and reduced costs and wastage".

"Given the encouraging developments in TFP and Speciality Papers during the
first half, the Board is confident that our on-going plans should return the
Group to acceptable levels of profitability in the short to medium term".

[garth] 16/11/2006 07:29

Thanks Jon.

This was the comment on TFP in the finals:

Technical Fibre Products ("TFP")
Operating profit for the year was #777,000 against #521,000 with turnover up
8.7% on the previous year at #6,700,000. TFP's sales in the first six months
were broadly in line with the same period last year. Sales moved ahead of the
comparable period in the second half year. "

AGM statement pointed to improved trading in TFP.

Current share price is around 20X TFP profits from last year......

With involvement in heat insulation, Fuel Cell projects and composite materials this part of the business has a direct contribution to a future 'low carbon' economy.

DYOR.

G.

[jonwig] 10/11/2006 09:29

Buy recommendation came in an e-mail today from UK-Analyst:

James Cropper manufactures specialist card and paper in low volumes for niche customers at its Specialty Papers division. An example of this is the casings for well-known whisky brands, as well as the high-quality paper used for the coverings of many annual reports. The company is a major player in this market as there are not many competitors that could match Cropper's ability to turn around low volumes in such a wide range of colours. The company also retails its paper directly to the public via the Paper Mill chain of shops.

Cropper's Technical Fibre unit weaves ultra thin products from a range of more than 30 different fibres to meet specific applications. Its products can be used for anything from fire insulation to batteries and electrical appliances. This unit is proving to be the rising star of the company and we believe that US sales of fire-insulating materials will generate strong growth going forward.

The company's Converting division adds value to base paper and card products by laminating, coating and embossing – the main end-use of these products is in Point of Sale displays.

There is no getting away from the fact the last set of full year results to 1st April 2006 were appalling. Cropper was forced to halve its dividend to 4.1p after turning in a pre-tax loss of 300,000 pounds, compared with a pre-tax profit of 1.6 million pounds in the previous year. This was a result of the gas bill rising to 3.2 million pounds from 2 million pounds and pulp costs growing by around 800,000 pounds, despite lower volumes.

Investors deserted the stock. However, Cropper is extremely operationally geared and successful cost-cutting coupled with sales growth and a reduction in gas prices is likely to result in a raft of increases to brokers forecasts. We do not believe that this is in the price.

The assessment of its prospects at the time of the interim numbers did not make comfortable reading. The main concern was with its Specialty Papers unit. The group said that the outlook for the division would remain difficult for the foreseeable future, given the volatile nature of energy markets. Global pulp inventories were also in decline due to strong demand and reduced pulp production after plant closures in North America . This was hitting input costs and the group accepted that the profitability of the unit would deteriorate further in the short term.

MANAGEMENT

Chairman James Cropper was born in 1938 and is the great-great-grandson of the founder of the company. He was educated at Eton and Cambridge University graduating with a degree in Law. After training as a chartered accountant with Price Waterhouse in Newcastle , he joined the family firm in 1966. He retired as Chief Executive in December 2000 but continues to act as Chairman. Cropper is also Lord-Lieutenant of Cumbria .

Chief Executive Alun Lewis also acts as General Manager of the Converting Division. He has a degree in biochemistry and an MBA from The University of Central Lancashire. He cut his industry teeth at Wiggins Teape, where he gained manufacturing experience in a variety of roles. He joined James Cropper in 1987 as Finishing Production Manager. He was appointed to the Board in 1998 and became Chief Executive with effect from January 2001.

Finance Director, John Denman, has a degree in physics and trained as a chartered accountant with Deloitte & Co in London . Subsequently he held a variety of roles with British American Tobacco, Glaxo, Halfords and BT Marine. Denman joined the group and the board in 1995 following the acquisition of BT Marine by Cable & Wireless.

*This email represents the views of UK-Analyst and are not the views of IG Index. Remember that spread betting is a leveraged product and can result in losses that exceed your initial deposit. It may not be suitable for everyone, so please ensure that you fully understand the risks involved. The value of investments can go down as well as up. Investing in equities can lose you part or all of your capital. Smaller company shares can be relatively illiquid and thus hard to trade. And that makes such investments more of a high risk than larger company shares. The Small Cap Shares newsletter is owned by t1ps.com which is authorised and regulated by the FSA and can be contacted at 49 Rivington St, London EC2A 3QB or on 0207 033 9389.

CURRENT TRADING

Following the gloomy results announcement in June, the market was not expecting much from an AGM update in August. As it happened, life at Cropper had turned around in a spectacular fashion. The company revealed that it had traded profitably in the first three months of the current financial year.

The star of the update was the Technical Fibre Products division, where profits were well ahead of the same period last year, despite the weakening dollar. The growth was put down to a resurgence in commercial aircraft building as well as the development of new-concept military aircraft using composite materials. It also revealed that European sales of insulation and composite materials for use in transportation and industrial applications were also progressing well.

The major concern surrounded the performance of the Speciality Papers unit. There was some good news on this front, but the company was still cautious on the outlook. We believe that they were overly conservative. By far the best news was the division traded profitability in the first quarter. Further price rises are also in the process of being agreed with customers.

The Converting division also appeared to make encouraging progress. The targeted investment and product rationalisation was to be completed by the early autumn, allowing the decommissioning of older equipment. This development would lead to significant improvements in capability, output and productivity, resulting in increased profitability in the second half of the year.

In the current retail environment, The Paper Mill Shop incurred a loss in the first quarter of the financial year. This is a little disappointing, but traditionally this is a quiet trading period for the business. No new store openings are expected in the remainder of the current year, but Cropper is set to launch its online store imminently – and in time for Christmas.

First quarter gas costs were 9% higher than the 2005 comparable period. If latest market forecasts materialise, gas costs for the full year will rise 20% year-on-year – but we believe that this will not be the case. There is now actually a downward pressure on wholesale gas prices.

Cropper has also fitted a waste heat recovery unit at its CHP plant, which should become operational in the next few months. It is expected to cut gas consumption by up to 5% per year. The investment cost 400,000 pounds but it is expected to save 200,000 pounds a year in energy costs.

THE ISSUES

While the amount Cropper spends on gas is likely to be higher this year, it will be significantly below projections. The wholesale gas market is oversupplied and prices are falling. On 1st October the wholesale gas contract for immediate delivery crashed in value as peak winter import volumes hit the UK network, creating a vast supply excess. This is good news.

The pulp price is still a problem. There are still structural pressures on price, with global pulp inventories continuing to decline. This is due to strong demand and reduced pulp production in the US . The company said it now believed that the cost of pulp in the current year would be around 9% higher than last year.

The rising cost of pulp has been factored into the market forecast for some time, but the good news on gas prices has not. We expect upbeat statement at the interim results in November and this will be a catalyst for brokers to increase forecasts which will drive a re-rating.

Cash management is under tight control Gearing, at 46% is higher than in the past but there is cash of 1.8 million pounds in the bank and we imagine that as trading picks up, gearing will be brought down to historic norms of c30% within 18 months. The board is focused on minimising energy costs, improving efficiencies and reducing its dependence on external waste water treatment. Last year's interest costs of 888,000 pounds were almost covered by the tumbling operating profits – but not quite. With the recent improvement in trading, however, we do not see this becoming an issue going forward. Interest costs will be more than twice covered this year and interest cover will increase thereafter. What is more, Cropper aims to shift its product mix to even higher-margin business. This is all very positive stuff and underpins our view of Cropper being a solid recovery play.

CONCLUSION

James Cropper has had a torrid time over the last 18 months as the price of its input costs spiralled out of control. The company is a high gas user and pulp prices have been inflating rapidly. This led to a fall in the share price as investor confidence waned. However, following the recent trading update Cropper has demonstrated its determination to tackle this issue and we firmly believe that the stock is at an inflection point.

The dollar has moved in a way that benefits the company and, with energy costs set to come in below expectations, we see the interim statement in November as prompting a raft of broker upgrades. At best, the market was looking for the company to hit breakeven in the year to 31st March 2007, but we now believe that pre-tax profits could actually hit 500,000 pounds, rising to 2.2 million pounds in the following year. This is significantly ahead of current market forecasts.

Our estimate for the year to March 2008 is therefore more than double the current market estimate. Brokers are forecasting earnings per share for next year of 12.5p, which would leave the shares trading on a price earnings multiple of 12.5 times. Once the forecast upgrades hit home, this multiple will tumble and the shares will be re-rated. We also expect the progressive dividend policy to re-restart immediately and forecast dividend payments of 6p in the current year.

The shares trade at a steep discount to net assets of 226p per share. Cropper has high operational gearing and the experienced management team is making significant headway towards resuming profitability. In the long term, there is a possibility of supplying specialist paper for catalytic converters in a joint venture with Johnson Matthey. That would be a bonus. But even on what will be achieved this year the shares are a BUY .

Key Data

EPIC: CRPR
Mkt: Full List
Spread: 150p - 160p

[hybrasil] 24/10/2006 06:50

interims should be here in 4 weeks time. Hopefully they'll show the corner has been turned. Following on th agm statement they should.

[garth] 17/10/2006 12:20

Its waking up :o)

It wouldn't surprise me to hear that they've been mentioned at some point on TW's new show.....

G.

[hybrasil] 17/10/2006 10:05

bought a few today. It always amuses me how small trades in this share affect the price

[garth] 13/10/2006 15:07

£12.5M market cap. TFP made £700K profit last year. That part of the business has to worth at least 15X earnings = £10.5M

6 months figures already flagged to be weak on the back of energy costs - but this is an ethically-principled business with a £10M gem tucked away.....the rest of the business in for just £2M?

G.

[elinorhem] 18/9/2006 23:08

Brilliant read:

While reading message boards a while back I found a gem. A newsletter that is dedicated to profiling little known issues. The list is 100% double opt-in to ensure that the members are truly looking for a lead. It is certainly worth a few minutes of your time to take a look.

[hybrasil] 18/9/2006 22:23

Hey what is happening to the share price here?

[capercaillie] 28/6/2006 21:53

Koehler to close Bensheim mill and expand coloured paper production at Greiz

OBERKIRCH, Germany, June 28, 2006 (Press Release) - The production of coloured papers and cardboard (ColorTech Papers) in the Koehler Group is to be concentrated at the Greiz mill, and there the production is intended to be increased from 25,000 tons to over 30,000 tons per annum. The Bensheim mill W. Euler Papierfabrik GmbH & Co. KG which belongs to the Koehler Group is, however, to be closed down in April 2007.

The market for coloured papers and cardboard, in particular the division office card-board, has been characterized by over-capacities and insufficient sales revenues for many years so that some smaller firms at home and abroad were obliged to file for in-solvency. However, the closedown of these paper machines has not led to a better utili-zation of the existing capacities. Since the tighter link-up of the Euler Group to Koehler five years ago, Koehler has tried to improve productivity and in particular profitability of the Bensheim mill with extensive investments and with a program to cut costs and to increase efficiency. Due to negative market influences, however, this aim has only been achieved in part, and the planning for the coming years shows no fundamental changes. Therefore, the Board of Directors of Koehler AG feels impelled to act now and will submit the supervisory board the proposal to close-down the Bensheim mill.

The Koehler Group assumes that the concentration of the production in the Greiz mill will result in a positive development for the Euler division in the coming years. In the following two years, additional investments of about € 2,500,000 are planned to ration-alize production and to improve the quality. With further measures, like the introduction of the 40-hours-week for example, the Greiz mill is intended to work profitably and the jobs are intended to be secured in the medium term at this mill.

Due to the close-down of the Bensheim mill 115 persons will become redundant.

The Board of Directors of Koehler AG assumes that the decline in sales of about 12,000 tons of Euler papers in consequence of the shutdown of the Bensheim mill will be balanced by increases in the other divisions.

On 24 July, 2006, the supervisory board of Koehler AG will discuss the planned close-down. At the end of July, the executive board and the shareholders' meeting of W. Euler Papierfabrik GmbH & Co. KG will make the final decision as to the date for the closedown of the Bensheim mill.

On 20 June 2006, the industry committee and the works committee were informed by the Board of Directors about the economic situation of the Euler Group, in particular about the Bensheim mill and the intended change. At the same time, proceedings have been initiated about a balance of interests and a social plan. On 22 June 2006, the staff members of the Bensheim mill were informed in a works meeting about the planned closedown.

[garth] 28/6/2006 07:00

TW effect I assume. Also seen following last results only to slowly reverse. Great value here eventually but with a further deterioration already flagged in an already depressed market then you have to be a very patient asset player to be buying right now IMO. Although if I had spare cash I might have been tempted.

[capercaillie] 27/6/2006 21:32

Nice bounce for no apparent reason.

[garth] 27/6/2006 09:20

I don't think so ;0)

"The Burneside manufacturer made pre-tax profits of £300,000 in the year to April 2006, compared with a healthy £32.4 million in the previous year."

[capercaillie] 26/6/2006 18:47

Soaring fuel prices hurt Cropper's profits
By Jim Smith
One of South Lakeland's largest companies barely broke even last year after suffering a slump in its fortunes.

Specialist papermaker James Cropper plc has blamed the dramatic turn-around in the company's performance on a combination of rocketing energy costs, higher raw material prices and increasing environmental regulations.

The Burneside manufacturer made pre-tax profits of £300,000 in the year to April 2006, compared with a healthy £32.4 million in the previous year.

continued...
However, after further bolstering the company's pension funds with a £400,000 contribution, the firm this week reported a small loss of £100,000.

Cropper's group turnover remained virtually static at £64.2 million, but speciality papermaking by far the largest division within the group saw sales slip back by £1.7m to £43.8m.

The company, which employs more than 600 people, including 500 at Burneside Mill, has halved its final dividend pay-out to shareholders to 4.1p from 8.2p last year, reflecting the tough times facing the manufacturer.

Company chairman James Cropper warned that the outlook for speciality papermaking would "remain difficult for the foreseeable future, given the volatile nature of energy markets."

Pulp prices were expected to rise in the coming year, and it was therefore anticipated that the profitability of speciality papers would deteriorate further in the short term, said Mr Cropper.

He added he was "very disappointed" it had been necessary to reduce final dividend payments to shareholders.

"In due course management plans, backed by the board's firm resolve, will return the group to acceptable levels of profitability, therefore enabling our progressive dividend policy to be restored."

Cropper saw its energy costs soar by 54 per cent over the past 12 months, adding an extra £1.5 million to its fuel bill.

Group finance director John Denman said the escalating energy costs, coupled with higher transport costs and a "huge" rise in the firm's effluent treatment charges, meant the company had been forced to absorb increased costs of some £5m over the past three years.

Mr Denman said energy costs were likely to keep on growing for the next few years, adding: "None of us will see cheap energy again, either at home or in business.

"There is a long-term impact on the business that has to be managed. We are working very hard to reverse the decline in profitability of the papermaking business."

In an attempt to reduce energy consumption, the company is investing £400,000 in a used heat recovery unit, which should recover five per cent of the firm's energy usage. The plant should be operating by the end of this autumn.

And in the longer term, Cropper plans to spend £2m on a biomass boiler that could come on stream in 18 months' time. "We can use it to burn our own organic waste and buy in woodchip. That could make an inroad of 20 per cent on energy savings," said Mr Denman.

In the meantime, the company plans to invest a further £1.3m in a new effluent treatment plant for waste produced in the papermaking process, after the Environment Agency ruled the manufacturer could no longer use its own landfill site.

On a more positive note, Cropper's Paper Mill shops continued to trade well, despite a downturn in the retail sector.

Five further outlets were opened in the past year, giving Cropper a chain of 23 stores nationwide.

Two more Paper Mill shops are expected to be opened over the next year or two, and the company is also planning to start selling on the internet, giving it another route to market And the company's Technical Fibre Products division also bucked the generally gloomy trend, with sales up by nine per cent and profitability rising by 50 per cent. Sales of metal-coated carbon fibre products for use in high-tech applications continued to grow, especially in US markets.

While facing increased costs due to energy consumption and environmental regulatory compliance, the company was operating in a competitive marketplace, said Mr Denman.

"We are a niche player but nobody has to buy from us. We have to ensure that we remain competitive. It's not as easy as passing on price increases to customers. They always have somewhere else to go.

"We have to batten down the hatches and grind our way through to sunnier days. It's going to be very hard work.

"We are being positive and believe we can grow our way out of the problems by focusing on areas of business that are profitable

[garth] 20/6/2006 14:06

Performance of the Mill Shops broadly neutral with these two aspects rather balancing each other out IMO:

"The outlook for Speciality Papers will remain difficult for the foreseeable
future given the volatile nature of energy markets. Global pulp inventories
continue to decline, owing to strong demand and reduced pulp production, mostly
resulting from closures in North America. As a consequence pulp is expected to
advance on an upward trend in the current financial year. It should therefore be anticipated that the profitability of Speciality Papers will deteriorate further in the short term".

"I am encouraged by the recent improvement in the performance of Technical Fibre
Products. An emerging portfolio of new product developments combined with a
well-managed cost base provides confidence that this improvement will continue despite the recent weakening of the US$".

Taken on its own the profitability of TFP is very encouraging and alone accounts for 60% or more of the current valuation of CRPR (ignoring pension deficit). But the warning that rising pulp prices will result in a further deterioration of profitability in Specialty Papers short term will cap progress in the share price unless TW does another 'management buy-out' ramping job for EK short term.

Longer term there is no question that there is good value here - TFP.

G.