James Cropper LON:CRPR, the AIM-listed, Cumbria-based paper production company is due to publish its interim results for the six months ending 1st October on Thursday (9th November).
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As previously reported, Cropper said that it was going though a year of transition, especially as it integrates TFP Hydrogen, which provides products to the Defence, Aerospace, Automotive and Construction sectors, and allowed Cropper to enter the renewable energy space, through its manufacture of membranes in hydrogen fuel cells.
As reported, TFP has developed a range of carbon veils and mats which can be tailored to suit the requirements of both stationary and portable fuel cell systems, as well as catalyst powders for components for electrolysers, which enable the generation of green hydrogen fuel from water electrolysis.
TFP adding value to the group
Cropper is well-pleased with the way that TFP is adding value to the group and taking this Victorian paper and card manufacturer into a new age. In August Cropper announced that TFP launched its proprietary Hydrogen Modular Production Unit, a manufacturing unit that can be installed in situ at clients’ operations to supply them with PEM electrolysers and cut the supply chain between manufacturer and end user.
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Steve Adams, Cropper’s chief executive said at the time: “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. TFP Hydrogen remains dedicated to pioneering innovative solutions that will reshape the energy paradigm and foster a sustainable future.”
The Hydrogen Modular Production Unit can be up and running at a client’s operations hub in between six and twelve months the company said.
As reported, Cropper saw a 24% year-on-year increase in revenue to GBP129.7m in its full year results to the 1st April with a 4% increase in operating profit to GBP4.8m. However, the year was marred with GBP1.1m of exceptional costs and the more expensive nature of servicing its GBP16.6m of debt and this saw a 53% fall in profit before tax of GBP1.3m. Nevertheless, the company, driven by the outperformance of TFP was pleased with how it showed a: “strong recovery in a transformational year.”
James Cropper share price has disappointed
The stock market has not been kind to Cropper. The Kendal-based company opened the week at 770p and has offered a year-to-date return of -13% and a one-year return of -9.4% with its shares ranging between 560p and 975p over a 52-week period. Like a lot of AIM stocks it has been quite volatile in the last year. The company has a GBP73.6m market cap.
It’s difficult to say how the share price will develop in the next 12-to-24 months. The paper and packaging sector is facing an uncertain future. On one hand the more we shop online, the more packaging will be needed to fulfil orders, and with paper and cardboard being the most environmentally friendly option, there is scope for development. On the other had the digitisation of communications means we are sending fewer physical letters, typing and printing fewer documents and buying fewer physical copy newspapers and magazines, which is not a good thing for the sector.
However, the diversification of Cropper into the renewables sector – specifically Hydrogen – augurs well for its sustainability, especially if, as some analysts tell us, that Hydrogen will become the go-to solution in the energy transition in coming decades.
It will be interesting to see what further contribution TFP has made to Cropper’s bottom line over the last six months.
