AGM Statement

RNS Number : 0524Q

Cropper(James) PLC

28 July 2010

 



Issued by  Brewin Dolphin                                                                                                               

Date: Wednesday, 28 July 2010                                                                                             Embargoed: 11.00am

James Cropper PLC

Annual General Meeting and Trading update

28^th July 2010

STATEMENT BY THE CHAIRMAN, J A CROPPER

At the AGM to be held at 11.00am today, James Cropper, Chairman, will make the following statement:

"I am pleased to report that overall the Group has traded profitably in the opening quarter with strong performances from Technical Fibre Products ("TFP") and James Cropper Converting ("Converting").

"TFP's order book has increased significantly indicating that the impact of the recession on down stream customers is easing. I anticipate that TFP's sales to the aerospace, defence, security and consumer electronics sectors will build strongly in the next 12 months with profit levels recovering accordingly.

"Converting has benefited from a step change in demand for digital printing board within the US retailing sector. This development, together with efficiency gains due from planned investment, should lead to an increase in this subsidiary's profitability in the current financial year compared to recent years.

"I mentioned in the Annual Report that the upward movement in pulp prices would adversely impact the profitability of James Cropper Speciality Papers ("Speciality Papers") in the short term. In addition energy costs to date have also been higher than anticipated. These factors have led to Speciality Papers recording a small loss in the opening quarter.

"Northern Bleached Softwood Kraft ("NBSK") pulp has been on a rising trend since April 2009, driven by supply constraints and continuing demand from China. Supply in the run up to the financial year end was badly affected by the impact of the Chilean earthquake. Chile's pulp mills, which jointly produced 8% of global pulp supply, were taken out of action by this natural disaster. By the end of 09/10 the price of NBSK was US$880/tonne. Further increases took the price to US$980 by June 2010, an increase of 70% since April 2009. However there were no further price increases in July and most of the Chilean pulp mills are now back in production. Market forecasters believe that the price of pulp is approaching a plateau and that the price will start to fall in the second half of the current year.

"In response Speciality Papers continues to agree further price rises with customers in order to pass on these cost increases. However, given the uncertainties surrounding energy prices and pulp costs and the time lag associated with implementing price increases, Speciality Papers will record a significantly reduced profit in the current year compared with 09/10.

"During the first quarter The Paper Mill Shop closed three further under-performing outlets. There will be further outlet closures in the current year.

"Despite the short term issues that face Speciality Papers, I am very confident that the prospects for the Group are bright and that I leave my successor as Chairman with strong foundations upon which to build.  We have weathered the vagaries of the recession well.  We will need to make further significant investment in our businesses, but our borrowings remain low and our cash position strong.  We have robust growth plans that should deliver more consistent and increased levels of profitability in the coming years."

Enquiries:
John Denman, Group Finance Director	Andrew Emmott, Director, Corporate Finance
James Cropper PLC	Brewin Dolphin
Tel: [phone]	Tel: [phone]
www.cropper.com

 

END

 

 

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