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The half-year results for paper manufacturers James Cropper plc show speciality papers and coverting trade in line with management expectations – but warns that full year results will be down on market expectations, after reporting a 21 per cent fall in pre-tax profits to £1.1million for the half year, blaming uncertainty in the eurozone.
Mark Cropper, Chairman said: "In the first half, Speciality Papers and Converting traded in line with management expectations, with Speciality Papers well ahead of last year at the interim date.
"The recovery of Speciality Papers is encouraging, illustrating the strength of our balanced portfolio of businesses. However, I am mindful that in past years, sales into the Euro-zone by Speciality Papers have accounted for 30 per cent of this subsidiary's turnover and that in recent months its orders from European customers have been running below this level. The performance of Speciality Papers in the second half is therefore not immune to the unfolding economic events in the Euro-zone".
"As previously reported, the growing concerns of customers in the US relating to resurgent recessionary pressures and Federal austerity measures have been felt in TFP's order book. It must therefore be anticipated that TFP's profits in the full year will be significantly lower than in the previous year.
"As a result of these external factors, the Board expects the Company's full year trading results to be below market expectations.
"The Company opened the current financial year with a strong balance sheet and low borrowings following successful risk reduction policies and cash conservation in recent years. This situation provides me with confidence as we embark on an exciting period of capital investment which aims to strengthen our platform for growth and to mitigate our risk exposure to raw material and energy costs".
