The historic Cumbrian manufacturer of paper and technical fibre products filed sales of £104.7m for the year to 28 March, up from £101.1m the prior year.
The firm celebrates is 175th anniversary next month, with celebrations deferred until next year or even until 2022, pending the situation around the Covid-19 pandemic.
Chairman Mark Cropper praised the efforts of the firm’s team in dealing with the crisis.
“In the days following lockdown two simple questions were foremost in my mind: do we truly realise how serious this is, and will we survive? These are answered: yes and yes. But this is only owing to the extraordinary exertions and inputs from every level of the James Cropper team,” he said.
“Unlike many businesses, we have never shut although, aided by the government furlough scheme, we have cycled production to match demand.”
Operating profit prior to the impact of pension accounting standard IAS19 jumped from £4.3m to £7.2m, while pre-tax profits more than doubled, rising from £2.6m to £5.5m.
Its £75.6m-tunover Paper division reversed last year’s £2m loss and posted a £3.4m operating profit.
Chairman Mark Cropper said: “Paper's return to profitability was aided by lower pulp and energy costs, the former finally dropping after two years of extensive (and painful) rises. Paper also saw an underlying improvement in margin; itself helped by strong growth of 23% in its most important market, luxury packaging.
“We continue to seek top and bottom-line improvements in Paper in every way possible. Importantly, via our Big Listen and ensuring programmes, we are seeking and gaining more ideas than ever about how to improve performance. To date over 350 people have given input, the majority of the Paper team.”
The group had already announced that it would not pay a final dividend for the first time in more than 40 years as part of the cash preservation programme it has implemented due to the pandemic.
“Looking beyond the here and now, I believe there are now two additional questions to ask: can we grow our way out of the current economic environment and can we do so in a way that respects our environment, people and communities like never before? I would again answer yes and yes,” Cropper added.
He said it was encouraging that the fastest growing areas of the group’s business were in the environmental field, with its Colourform recyclable alternative to plastic packaging and renewable energy materials at its Technical Fibre Products (TFP) wing.
Sales at Colourform jumped by 800% to £2.6m, and losses almost halved, falling by 45% to £1.4m.
However, TFP sales were flat at £26.5m and operating profits fell by 13% to £7.8m. The completion of a new production line for nonwovens has been put on hold as part of the actions to preserve cash.
“Paper meanwhile is maintaining a commitment to transition to 50% waste fibre by 2025. We are also embarking on a programme to dramatically cut our carbon emissions significantly ahead of national decarbonisation targets.”
He said that the firm expected to break-even in the current financial year.
The impact of Covid-19 on group sales at the start of the current financial year was approximately 30% less compared to the same period in the prior year, Cropper said. “We expect to fall further during Q2, with growth being experienced in the second half of the year.
“Looking out further, I have no doubt we will emerge stronger and more resilient than ever,” Cropper stated.
The group had £8.96m in cash at the year-end, compared with £2.35m the prior year.
James Cropper shares rose on the news, and were up 3.27% at £11.36 at the time of writing.
