The Cumbria-based company’s 29% fall in profits was largely due to The Paper Mill Shop (TPMS), its retail division which closed in April 2011. The Paper Mill Shop made losses of £1.7m in 2011, including closure and redundancy costs, compared to £374k in 2010.

James Cropper’s pre-tax profits were £1.7m this year, a fall of 49% from £3.2m in 2010.

Profits for the company’s Speciality Papers Division, which includes its internet business, papermilldirect, fell by 83 per cent to £587,000, compared to £3.4m last year. The company attributed the drop to increases in energy costs and a 10% increase in the price of pulp. It said it was trying to agree price rises with customers in order to pass on some of the increases.

James Cropper’s Technical Fibre Products division fared much better, with its operating profit up by 42% to £2.3m from £1.3m in 2010. There was further good news for its Converting division, which made a profit of £1.3m, compared to £446k in 2010.

Pre-tax profits for the Group were up from £2.4m to £11m due to changes made to the company’s defined benefit pension schemes, which restricted future increases in pensionable salaries to a maximum of 2% per year and reduced the company’s pension deficit by £10.2m, to an overall figure of £1.4m.

Turnover for the group increased by 14% to £86.9m compared to £76.2m last year. Group export sales increased by 19% and represented 53% of the company’s turnover.

Chairman Mark Cropper said that he was ‘heartened’ by the results and that the Group had taken significant steps to reduce its risk exposure by closing its shops and curtailing future benefits.