Cropper (james) Share Discussion Threads

[arthur_lame_stocks] 31/10/2022 07:37

Ho Hum,it looks like I was a bit premature buying back in after today's profit warning. It's a really tough environment for manufacturers at the moment so maybe I shouldn't be surprised. I still wish they'd ditch paper manufacturing and concentrate on the two growth businesses.

[pireric] 27/7/2022 17:35

The only question I have Arthur is the extent to which the TFP profitability is 'clean' versus benefiting from intra-company agreements on sourcing costs. In other words, if you took TFP out, does it need to move to arms-length contracts on any cost lines that make the P&L today distortedly high (and which in turn could materially impact how to think about the valuation multiple for the business).

That's a genuine question as I don't know the answer, but it's something I'm mindful of when doing divisional analysis. So if anyone knows, I'd love to know!

Eric

[arthur_lame_stocks] 27/7/2022 17:00

I also bought back in. I think TFP is worth the market cap on its own with the paper manufacturing and Colourform thrown in for free. If paper can remain profitable throughout this year then I expect a really quite good set of results in 2023.

[p1nkfish] 27/7/2022 12:22

Well about time they wrote something positive, hold and added a little on weakness.
Illiquid.

[callumross] 27/7/2022 10:23

Impressive update all round so finally taken a position.

[callumross] 04/7/2022 14:27

Quality company that it is, it is hard to see a floor for this one given the uncertainty and elevated rating. Like you Arthur I want to buy in at some point but just don't see what price represents good value. £6?

[arthur_lame_stocks] 26/6/2022 09:05

The investors' Chronicle have called this a sell.



I actually disagree somewhat and would like to buy but hopefully they will get cheaper before things get better.

[disc0dave45] 21/6/2022 11:53

Massive tax rate (51%) has decimated bottom line earnings despite a 33% uplift in revenue and only a reduction in exceptionals (primarily the restructuring costs) ramped up pbt.
Energy costs more than doubled.
On a current PE of 72x…….I must be missing something!.

[gopher] 21/6/2022 09:02

Ok results, interesting company. I noted the large increase in raw material costs which they have navigated reasonably well. Also the new undrawn borrowing facility. Need to get profits up to drive eps imo.

[arthur_lame_stocks] 09/6/2022 16:05

I agree it doesn't look cheap as a whole, but the divisional breakdown when it comes should give a clearer picture of the value in these. I expect TFP to make hefty profits but to be dragged down by losses in the growing Colourform and paper manufacturing.

[callumross] 09/6/2022 15:58

Thinking like you Arthur but just feel it is a fairly weighty valuation with a p/e of 30 plus in such uncertain times.

[arthur_lame_stocks] 09/6/2022 15:10

I'm giving some thought to buying back in. TFP has to be worth £100m on its own surely?

I wish they would sell the paper manufacturing and concentrate on the growth areas though, I guess the family must be emotionally attached to it.

[garth] 23/3/2022 10:11

Callum,

On one level that is a reasonable observation, but misleading. "Directors and wives" (plural) did not sell in January. One director and wife sold. Two other directors purchased. The balance of sales outweighed buys - although the remuneration committee also purchased.

There was buying and selling (both) in November and in September too.

Just for balance.

Best wishes,

G.

[callumross] 23/3/2022 09:39

"I am worried that the spiralling energy cost which is a big cost for them will push them into a profit warning soon" Very prescient comments Arthur. Now we can see why the directors and wives were selling in January.

[garth] 23/3/2022 07:47

Positive growth continuing but eye watering energy increases hitting paper margins:

"The average wholesale gas price has moved from 50p/therm to over 250p/therm, peaking at 800p/therm in Q4"

Longer term prospects continue to look great, IMO.

G.

[garth] 09/3/2022 10:24

I think its a reasonable concern Arthur - it has certainly proven to be a problem at certain times over the years.

G.

[arthur_lame_stocks] 09/3/2022 10:05

I sold these a little while ago as I am worried that the spiraling energy cost which is a big cost for them will push them into a profit warning soon.

I will keep an eye on them though as I like their prospects overall.

[km18] 17/12/2021 13:48

James Cropper Plc posted an impressive set of HY results a few weeks ago as the company rebounds from COVID. Revenues were up 46% to £49.8m, profit before tax was up to £1.9m from no profit, and EPS was up to 16.2p from loss of 0.2p. Obviously business has rebounded from shutdowns to pre-Pandemic levels. But so too has the share price which is back at early-2020 levels. Valuation isn’t particularly helpful, forward PE ratio at around 34 looks a little rich. Balance sheet is reasonably healthy, but share price lacks momentum. Not a bad company, but a share to monitor for the time being....from WealthOracleAM

[garth] 09/11/2021 10:11

Agreed Arthur. Multiple is high. But TFP's existing buisness prospects have been enhanced following the purchase of PV3. That is now TFP Hydrogen.

Current market cap £129K

What price TFP in a few years' time?

By way of example, this from August:
At TFP Hydrogen Products we are proud to announce our involvement in the Ocean Renewable Energy Fuel (Ocean-REFuel) programme, has an electrolyser system manufacturer.

The innovative £10M research project will investigate the potential of harnessing offshore wind and marine renewable energy to produce zero carbon hydrogen and ammonia fuels.

G.

[arthur_lame_stocks] 09/11/2021 09:54

I thought the results were pretty good overall. These are not obviously cheap but hopefully they have great growth prospects going forward so i'm happy to continue holding.

[p1nkfish] 09/11/2021 08:36

Lovely to read and promising growth plans.

[garth] 09/11/2021 08:13

Nice start. Results well received. I am expecting that will see us move beyond the most recent high.

Mark Cropper, Chairman, commented:

"The Group has experienced a 47% increase in revenues in the first half, returning to pre-pandemic levels, with both TFP and Colourform performing above this level, and Paper demonstrating a strong recovery. Plans are in place to establish an additional electrolyser line in the US as the hydrogen market surges and the 50% increase in TFP's non-woven lines is now operational. Paper sales are projected to be ahead of pre-pandemic levels by the start of 2022, with a strong demand for recycled fibre content and responsible sourcing. The Colourform ä business attracts brands seeking plastic-free sustainable packaging across the wines, spirits, beauty, and fragrance sectors."

.....

"Technical Fibre Products ("TFP")

Revenues in the TFP division were up by 19% across all market segments. Strong growth continues in the renewable energy sector, and demand in the aerospace sector is returning as aircraft build rates increase. Proton Exchange Membrane (PEM) water electrolyser sectors are growing, and TFP is investing in additional USA capacity to meet forthcoming demand.

James Cropper Paper ("Paper")

The Paper division, which Covid-19 adversely impacted, is seeing revenues up by 64% compared to last year's comparable period. Whilst the division does face a challenging inflationary environment, significant contracts gained in luxury packaging and price increases are strengthening the mix. Investment is underway to deliver additional capability to meet these contract wins and the increased demand coming on stream for materials with sustainable and recycled fibres delivered via circular economy projects.

Colourform(TM) ("Colourform")

Revenues in the Colourform division grew by 22% in the period, with contracts being fulfilled for the wines, spirits, and beauty and fragrance sectors. Significant international recognition was gained across the packaging industry with multiple sustainability awards won. As a result, Colourform's pipeline continues to grow with unique, pioneering projects for sustainable coloured packaging solutions.

............

Outlook

The Group has experienced a 47% increase in revenues in the first half, returning to pre-pandemic levels, with both TFP and Colourform performing above this level and Paper demonstrating a strong recovery.

Adjusted PBT for the Group increased by 70%, with strong growth across all businesses. It is expected that the Group will continue to grow in the second half.

Plans are in place to establish an additional electrolyser line in the US as the hydrogen market expands and the 50% increase in TFP's non-woven lines is now operational. Paper sales are projected to be ahead of pre-pandemic levels by the start of 2022, with a strong demand for recycled fibre content and responsible sourcing. The Colourform ä business is attracting brands seeking plastic-free sustainable packaging across the wines, spirits, beauty, and fragrance sectors.

G.

[garth] 22/10/2021 06:31

Can't decide what is in dominance, the rising trend channel from 700p or the falling one from 1950p.

Hydrogen future vs current gas prices. Hope vs Fear. Long term vs short term.

Ho-hum.

G.

[vprt] 12/10/2021 11:32

The day started at 06:30am with BBC reporting live from Cropper about the threat to energy intensive industries like paper - the doom-monger from the local Chamber of Commerce was saying that jobs (in general) were at stake. Not sure if anyone from the company spoke later? It was mentioned by the reporter that Cropper (in a normal year) spends about £3m on energy.

Then now at lunchtime I read the following: ..."Stora Enso STERV.HE and
UPM-Kymmene Corporation both dropped after EU antitrust regulators said they raided wood pulp makers in several countries as part of a cartel investigation. UPM just confirmed EU competition authorities were conducting an unannounced inspection at its premises while there were no immediate announcement from Stora Enso."

Perhaps the pulp market has been rigged to the detriment of Cropper and others?

Interesting times.