James Cropper (CRPR) Trading Update summary

Trading performance and outlook

• Revenue for the first half of FY2024 was in line with expectations, but the final months of 2023 saw challenges in Paper & Packaging and a slowdown in hydrogen sector demand.

• Full-year FY2024 revenue is expected to be not lower than £103m, but adjusted profit before tax will be materially below prior expectations, with only a small adjusted profit anticipated.

• Working capital remains well controlled, and year-end net debt is anticipated to be slightly better than previously expected.

Advanced materials division

• Hydrogen sector projects have been delayed due to inflation, higher interest rates, and government funding decisions, pushing major market growth to 2026–2028.

• Revenue growth in Advanced Materials will be slower in 2024 and 2025, but long-term hydrogen business prospects remain strong.

• Growth in aerospace and automotive sectors continues to support the core business.

• Investment in hydrogen electrolyser capacity and trials with PEM OEMs is ongoing.

Paper and packaging division

• Demand softened further in Q3 due to high inflation and supply chain destocking, but customer retention and pricing have remained resilient.

• Lower input costs, improved mix, and productivity initiatives have protected margins; restructuring is complete with a 15% headcount reduction.

• Some recovery in volumes is expected in Q4, with further improvement anticipated in FY2025.