News blog

James Cropper

  • BY: Andrew Hore |
  • POSTED: 30/07/2008 |

High energy prices continue to hamper paper and technical fibre products maker James Cropper.

Cropper estimates that it may have to pay £5.5m for the gas it uses in this financial year, compared with £2.7m last year. It is no surprise that the paper making business has started losing money when it has that kind of cost increase to absorb.

Softwood and hardwood pulp prices have been reasonably stable which has helped Cropper.

Cropper says it will push through price increases in the second half and believes it will benefit in volume terms from reduced capacity in the sector.

Cropper’s retail operation, The Paper Mill Shop, is closing poorly performing outlets and cutting costs.

On the bright side the rising price of oil has increased demand for Cropper’s technical fibre products from fuel cell companies.

Management continues to invest capital equipment that saves energy and improves efficiency. A decision should be made this autumn on whether an on-site biomass generator is feasible. If it is cost effective it could reduce gas consumption by one-fifth. 

Cropper shares dived 15.5p to 128.5p, valuing the company at £10.9m.

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