James Cropper shares surge as FY profits smash forecasts

(Sharecast News) - Shares in materials science and packaging group James Cropper surged by a quarter on Tuesday after a trading update from the firm revealed that annual profits would be 10% ahead of current market forecasts due to a strong end to the year. In a update for the financial year ended 28 March, James Cropper said that it had experienced "positive trading momentum into the year-end".

As a result, adjusted EBITDA is expected to be £8.8m for the 12-month period, some 30% ahead of the £6.7m delivered the year before.

The stock was up 25% at 350p by 1019 BST.

The Advanced Materials division saw a high single-digit percentage increase in adjusted profits despite increased investment in operational costs to support growth, while losses in the Paper & Packaging arm were "significantly" reduced, with the company swinging to a EBITDA profit in the second half.

Overall, group revenues were up 4% over the year at £103m, as growth in Advanced Materials offset a flat performance in Paper & Packaging owing to the loss of a significant customer last summer.

Net debt by the end of the year reduced to £8.3m from £12.9m 12 months earlier, while the net debt-to-EBITDA ratio improved to below 1x from 1.9x.

Meanwhile, the new fiscal year has started positively, though James Cropper did say that the impact of the Iran war on markets and input costs "remains uncertain".

"I am pleased to report a good performance in what remains a cautious and uncertain market environment. We have made structured progress in stabilising the business, which is reflected in the robust EBITDA and cash generated in the year," said chief executive David Stirling.

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