ANNUAL REPORT AND ACCOUNTS 2024
MAKING
A MATERIAL
DIFFERENCE
01
Globally minded but rooted in our
communities. Inventive and open to
change, but proud of where we have
come from. We are forging new
materials and possibilities, but still
place human values, knowledge and
craft at the heart of what we do.
We are a company like no other,
and our words and actions are
crafted to stand out from the rest.
MAKING A
MATERIAL
DIFFERENCE
02
03
ADVANCED MATERIALS
Our Advanced Materials business works at the cutting
edge of material science, creating future-focused
solutions across a broad portfolio of products.
From ultra-fine glass non-wovens found on most
commercial aircraft, to electrochemical coatings
creating green hydrogen at the heart of PEM
electrolysers, we specialise in providing innovative
solutions for current and next-generation technologies.
PAPER & PACKAGING
With 179 years of experience, our Paper & Packaging
business combines generations of craft with
advanced material science to create brand new
solutions for customers. Pioneering sustainability,
colour science, and moulded fibre packaging, we
are a leader in meticulously crafting unique paper
products for luxury brands around the world.
OUR PURPOSE
WHO WE ARE
A purpose-led business founded in 1845, James Cropper
has an internal workforce of over 600 people and manufactures
products used in over 50 countries globally.
The Group’s ambition is to be operationally carbon net zero
by 2030.
James Cropper is a market leader in
the development and manufacture of
advanced materials and paper products.
PIONEERING
MATERIALS
TO SAFEGUARD
OUR FUTURE
OUR VALUES
FORWARD-THINKING
RESPONSIBLE
CARING
SUSTAINABLE PRODUCT PORTFOLIO
END MARKETS FOR OUR PRODUCTS
MAKING A
MATERIAL
DIFFERENCE
ECOVEIL
Developed for the
composite industry,
ecoveil features a range of
sustainable and recycled
veils, including recycled
carbon fibre, jute,
and a bio-derived
polyamide veil.
NUMBER OF EMPLOYEES
628
Capacity to upcycle 700
million coffee cups per
year into luxury paper
and packaging.
700,000,000
Combining our
renowned expertise in
fibre and colour to create
100% renewable and
fully recyclable
moulded fibre
packaging.
Our materials are
incorporated into over
commercial aircraft.
We have applied
coatings to over
250,000 PEM
electrolysers
components for use
in the generation of
green hydrogen.
16 MILLION
58,000
Our products were
made into over
16m luxury retail
shopping bags
last year.
Our GDL
substrates
have been used
in over 58,000
hydrogen fuel
cell vehicles.
100%
20,000
250,000
®
04
05
CONTENTS
STRATEGIC REPORT
06
Financial Highlights
06
Commercial Highlights
07
Chair’s Letter
10
Positioned for Growth
12
Our Accelerated Growth Strategy
13
Market Trends
14
Chief Executive's Review
18
Advanced Materials in Focus
22
Paper & Packaging in Focus
26
Chief Financial Officer's Review
30
The Pension Report
36
Risk Management
39
S.172: Promoting the Success of our Group
44
ESG Report
48
Our People
54
Safety
56
TCFD Disclosures
57
GOVERNANCE
62
Board of Directors
62
Corporate Governance Statement
64
Compliance with the QCA Code
68
Report of the Audit Committee
69
Report of the Nomination Committee
71
Report of the Remuneration Committee
73
Directors’ Report
78
Statement of Directors’ Responsibilities
80
FINANCIAL STATEMENTS
82
Group Independent Auditor’s Report
82
Group Statement of Comprehensive Income
89
Statement of Financial Position
90
Statement of Cash Flows
91
Statement of Changes In Equity
92
Notes to the Financial Statements
93
Shareholder Information
132
UK
REVENUE: £39.5m
38%
OF TOTAL REVENUE
ASIA
REVENUE: £8.7m
8%
OF TOTAL REVENUE
OTHER
REVENUE: £0.6m
1%
OF TOTAL REVENUE
EUROPE
REVENUE: £29.7m
29%
OF TOTAL REVENUE
AMERICAS
REVENUE: £24.6m
24%
OF TOTAL REVENUE
Headquarters
Paper &
Packaging
Advanced
Materials
1. Burneside
UK
n
n
n
2. Crewe
UK
n
3. Launceston
UK
n
4. Schenectady
USA
n
1
2
3
4
06
07
2021
2022
2023
2024
Geographical % segmentation of revenue
UK
Europe
Americas
Asia
Other
50%
60%
40%
30%
20%
10%
2020
£6.6m
-5.3
(£5.3m)
(Loss)/profit before tax
5.5
1.7
2.8
2023
2024
2020
2021
2022
1.3
5%
38%
Gearing (2)
26
17
28
38
2023
2024
2020
2021
2022
34
-34%
3.8
£3.8m
Capital expenditure
9.2
3.1
6.8
2023
2024
2020
2021
2022
5.8
-7%
£15.5m
Net borrowings (3)
11.1
7.5
12.3
2023
2024
2020
2021
2022
16.6
-41.8
5.4
-47.2p
(41.8p)
Basic and diluted (loss)/earnings per share
2023
2024
2020
2021
2022
50.6
13.2
14.2
15.5
3.2
-75%
£0.8m
Adjusted profit before tax (1)
6.7
4.0
4.0
0.8
2023
2024
2020
2021
2022
129.7
2023
£103.0m
Total revenue
-21%
103.0
2024
2020
2021
2022
104.7
78.8
104.9
COMMERCIAL HIGHLIGHTS
Non-GAAP Measures:
1 Adjusted profit before tax equates to profit before tax excluding the impact of IAS 19 and exceptional items.
2 Gearing is calculated as the proportion of net debt to Total Shareholders' Equity, excluding the IAS19 Pension deficit.
3 Net debt is calculated as total loans and borrowings less cash and cash equivalents. Included in net debt from 2020
are lease liabilities for right-of-use assets under IFRS 16.
• Products increasingly focused on end-markets
with strong secular growth trends: clean energy,
lightweighting and sustainability.
• Restructured Paper & Packaging business has
a more efficient operating model and reduced
break-even revenue.
• Pricing has been resilient, underpinned by strong
customer relationships with margins supported
by lower input costs and productivity initiatives.
• More rigorous capital investment, cost and cash
disciplines applied across the business.
• Refreshed executive leadership team focused on
driving our growth strategy.
• FY2025 year-to-date trading has been in line with
the Board’s expectations.
• Input costs (pulp and energy) have remained high
through H1 FY2025.
• Strong opportunity pipeline in Advanced
Materials where, despite slower end-market
growth in hydrogen fuel cell in FY2024, the
mid-term outlook for both Energy Solutions
and Composite Solutions remains strong.
• Order intake levels in the Paper & Packaging
business point to signs of recovery in FY2025
and the new operating model is delivering
improved margins.
• The Board remains confident that, despite
external challenges, the Group is positioned to
drive increased value for shareholders through
a return to growth in the Group’s key markets.
OPERATIONAL
OUTLOOK
F
O
C
U
S
O
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N
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M
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H
FINANCIAL HIGHLIGHTS
STRATEGIC REPORT
COMMERCIAL HIGHLIGHTS
08
09
10
11
sustainable packaging to hydrogen, carbon capture
and other energy transition markets.
Growth will also be supported by the launch of our new
James Cropper brand in July 2024 which will further leverage
our technical capabilities and outstanding reputation for
developing innovative products and solutions.
SUSTAINABILITY
As an organisation, James Cropper continues to innovate
in its approach to sustainable business. Our ambitious
decarbonisation plan, which has recently attracted significant
grant funding, progressed during the year with ground works
being completed to enable the construction of a new energy
centre and the completion of our technical design. We also
commenced a project to explore freshwater recycling which
will reduce our levels of water abstraction and increase energy
efficiency. Whether through the use of recycled materials in
luxury packaging as an alternative to plastics, or by producing
coatings and technical substrates for use in the hydrogen
energy sector, we continue to redefine our offering with
the future in mind.
BOARD
In the last 12 months, we have been pleased to report some
significant appointments to the Board.
On 27 November 2023, Andrew Goody joined the Board as Chief
Financial and Operating Officer, succeeding Isabelle Maddock
who stood down in June 2023. Andrew has been a valuable
addition to the Board and executive team, bringing significant
leadership, financial and business transformation experience.
On 22 July 2024 we announced the appointment of Jon Yeung,
who will join the Board as an independent Non-Executive
Director and Audit Committee Chair following conclusion
Dear Shareholders
The 2024 financial year was one of significant change
for James Cropper.
At the beginning of the year, we announced the Board’s
strategy to develop a new business model to accelerate growth
in revenue and profitability. This included better leveraging
the breadth and capability of the Group under a single brand
repositioning James Cropper as an advanced materials
business, investing in innovation and systems to drive
efficiencies, and combining Paper and Colourform® into a
single Paper & Packaging division which was further
streamlined to reduce operating costs. I am pleased we were
able to make good progress against these strategic objectives
and I believe that our resulting business is better positioned
for growth as we move forward.
Despite this progress in repositioning the Group, we
announced in January that some of our most promising
growth opportunities, not least those in hydrogen and fuel
cells, are taking longer to bear fruit than previously expected
due to delayed market growth. At the same time, we reported
that difficult market conditions across the Paper & Packaging
business were expected to continue through the second half
of the year.
Looking into FY25, we continue to strengthen our relationships
with customers and partners in our Advanced Materials
business, where solid foundations have been laid for future
growth. In our Paper & Packaging business, we are seeing
some market recovery with volumes from key customers
returning to previous levels. Furthermore, I am pleased with
progress being made across the Group to grow our technical
capability and market share in target industries.
This will enhance our resilience and position us as the
preferred supplier in fast-growing sectors, ranging from
During the year, I met with some of
our largest shareholders to discuss
the business, our present challenges,
broader strategy, and my role as Chair.
These meetings provided helpful insight
to the views of our investors, which is an
important consideration for the Board,
and I am very grateful to those who took
the time to meet and offer feedback.
We also look forward to welcoming
shareholders at our forthcoming
AGM in September 2024.
DIVIDEND
Given the challenging macroeconomic
environment in the second half of the
year and the Group’s focus on efficient
cash management alongside investment
to support future growth, the Board
is not proposing a final dividend for
the year, leaving the total dividend for
the year at 3.0 pence per share (FY23:
6.0 pence per share). The Board remains
committed to its dividend programme
and will keep under review the potential
for resuming dividend payments
in due course.
OUTLOOK
James Cropper is a dynamic business
with a passion for innovation. Our
advanced ranges of products and
solutions enable us to continually evolve
to meet the needs of tomorrow as we
transition to a greener and more
sustainable society.
Whilst growth in Advanced Materials
was slower than we expected in the last
year, the mid-term outlook in both
of our AGM in September 2024. In
addition to being a chartered accountant,
Jon brings significant experience in
finance and in the creation of shareholder
value through business transformation
and growth, and I look forward to
working with him going forwards. At the
same time, we announced that Jim Sharp
will step down as a Director and from the
Board at the AGM. On behalf of the Board,
I wish to thank Jim for his continued
support and significant contribution.
In addition, on 25 September 2023,
Matthew Ratcliffe was appointed into
the new role of General Counsel and
Company Secretary, in succession to
Jim Aldridge who stood down as
Company Secretary in April 2023.
Each appointment brings fresh
perspectives and insight to James
Cropper, and I am delighted by the level
of talent we continue to attract. In the
year, our Nomination Committee led an
assessment of the skills, capabilities, and
diversity of our Board to ensure that we
retain an optimal balance of operational
and commercial knowledge, financial
acumen, entrepreneurial leadership,
and independent challenge.
STAKEHOLDER
ENGAGEMENT
Stakeholder engagement is an important
aspect of our business, and the Board
recognises its responsibilities to
promote the success of the Group for the
benefit of its members having regard to
the interests of broader stakeholders.
Energy Solutions and Composite
Solutions remains strong. Our
repositioning of the Paper & Packaging
business in the year has delivered a more
streamlined operation which is better
placed for growth in the medium term.
Short term challenges remain, with
input costs remaining high and a
degree of political uncertainty, but
I am confident that the strength of
our offering in growing markets
presents significant opportunities.
I am very proud of our colleagues for
the support and dedication shown in
a difficult year and I believe that we
have emerged a stronger business.
Our response to significant market
challenges in the second half of the
year enabled us to achieve a full-year
performance ahead of the Board’s
revised expectations following our
January 2024 trading update, and this
could not have been achieved without
the continued support of our people.
Mark Cropper
Non-Executive Chair
22 July 2024
CHAIR'S LETTER
James Cropper is a dynamic business
with a passion for innovation.
Our advanced ranges of products and
solutions enable us to continually evolve
to meet the needs of tomorrow as we transition
to a greener and more sustainable society.
Mark Cropper, Non-Executive Chair
STRATEGIC REPORT
CHAIR'S LETTER
12
13
POSITIONED
FOR GROWTH
HOW WE
GENERATE VALUE
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ACCELERATED
GROWTH
STRATEGY
1. Profitable growth through new
customer acquisition:
Targeting secular growth trends
to exploit opportunities in new
and existing markets
2. World class execution:
Investing in global systems and
functions to drive improved
productivity and performance
3. Technology and innovation:
Centre for Innovation to
support decarbonisation,
the use of waste fibres,
and new technology roadmaps
4. Inspiring our people:
Building a culture of trust,
cooperation and involvement
5. Leaders in sustainability:
Recognising our responsibility
to reduce and ultimately
eliminate our emissions
6. Build the brand:
Presenting a more meaningful
and relevant face to our
increasingly global
customer base
STRONG FOUNDATIONS
• Pioneering leaders
• Technical and commercial expertise
• Long-term sustainable focus
• History of know how and stewardship
• Strong values
ATTRACTIVE END
MARKETS
• Aligned with secular trends:
- Clean energy
- Lightweighting
- Sustainable packaging
- Reduce, re-use, recycle
WHAT WE HAVE
WHAT WE TARGET
STRATEGIC REPORT
OUR ACCELERATED GROWTH STRATEGY
Our strategy is to
focus on specific
market sectors
where we have,
or can develop,
a sustainable
competitive
advantage.
We plan to grow intentionally, by
focusing on strengthening our product
portfolio in growth markets and
leveraging our extensive technical
capabilities, manufacturing sites, and
distribution networks through strategic
investment in people, working capital
and equipment.
We have defined and introduced our
six strategic priorities, building a solid
foundation to drive a strategy for
accelerated growth.
Since the announcement of our
accelerated growth strategy in April
2023, we have restructured our
business to align our capabilities with
growth markets and simplified our
operations to drive efficiencies.
The ongoing focus on sustainability
and product differentiation drives
demand for our innovative, high-
performing ranges of products and
services. Our addressable global
markets, comprising aerospace,
automotive, defence, the hydrogen
economy and luxury goods in Paper
& Packaging, collectively show
significant potential for growth.
We maintain close and longstanding
relationships with our customers and
enjoy strong levels of engagement
and retention. The solutions we
develop add real value to our
customers across both mature
and emerging markets, and we are
positioned to deliver scalable growth
in key industries.
We adopt the broadest view of value
creation and recognise our duty
to consider and support all our
stakeholder groups. Our company
purpose – Pioneering Materials to
Safeguard Our Future – reflects our
attitude towards responsible and
sustainable business, supporting our
communities and the environment
we have the privilege to operate in
from our headquarters on the edge of
the Lake District National Park.
MARKET-LEADING
PRODUCTS AND
CAPABILITIES
ADVANCED MATERIALS
• Innovative wet-laid nonwovens
• Ultra-fine and lightweight veils
• Specialist electrochemical coatings
• Extensive technical capabilities
PAPER & PACKAGING
• Leaders in colour science
• Proprietary moulded fibre solutions
• Bespoke luxury packaging capabilities
• Pioneers in recycled fibres
SUSTAINABLE GROWTH
• Continuous new product
development
• Compelling commercial opportunities
• Disciplined capital allocation
WHY INVEST IN US?
14
15
ADVANCED MATERIALS
PAPER & PACKAGING
The Paris Climate Agreement aims
for a 45% reduction in global emissions
by 2030 and achieving net zero by
2050. As a result, many countries view
hydrogen as a key solution to clean
energy, investing billions of dollars to
make hydrogen production affordable
and incentivising the adoption of
hydrogen fuel cell vehicles.
PEM electrolysis is considered the
optimal method for hydrogen generation
due to its high efficiency, high operating
density, and capability to function at high
and differential pressures.
Hydrogen fuel cells offer faster
refuelling, greater range, lower
weight, and increased payload
capacity compared to traditional
battery powered vehicles, making
them especially advantageous for
heavy goods vehicles (HGVs).
For over 20 years, our Advanced
Materials division has partnered with
leading manufacturers to develop
premium materials for fuel cells and
PEM Electrolysers. In fuel cells, we
collaborate to create and produce top-
tier gas diffusion layer substrates (GDL),
continuously innovating to pioneer the
next generation of fuel cell solutions.
Our coating solutions are rapidly
scalable, enhancing electrolyser
efficiency and extending operating
life by up to 60% compared to uncoated
components. We remain at the
forefront of the hydrogen sector's
rapid development, working closely
with industry leaders to drive progress
and innovation.
In the pursuit of net zero emissions,
carbon capture is recognised as a crucial
solution for mitigating climate change.
Significant government investment is
propelling technological advancements,
with the UK government alone
committing £20 billion to establish a
competitive carbon capture, usage, and
storage market by 2035.
Other governments are also setting
ambitious targets and offering subsidies
to encourage the adoption of carbon
capture technologies. To achieve net zero
goals, carbon capture initiatives must
expand by a factor of 120 by 2050.
To enhance efficiency and reduce
emissions, airline and vehicle
manufacturers are increasingly
incorporating composite materials
into their designs.
In battery-powered electric vehicles,
traditional battery enclosure – which
encompass covers and trays to hold and
protect the battery cells – can add 110-160
kg in weight. The industry is shifting
towards composite solutions, which can
achieve up to 40% weight savings over
aluminium, thereby enhancing vehicle
range and allowing for the use of smaller
batteries and engines.
Additionally, with the growing use
of composites, there is a need to
integrate advanced materials that offer
electromagnetic interference (EMI)
shielding. Unlike traditional metals,
which naturally provide EMI protection,
composites require an additional
shielding layer to safeguard passengers
and components from EMI effects,
whilst adding minimal weight.
James Cropper has spent over 10 years
working alongside industry leaders to
develop cutting edge solutions for solid
sorbent direct air capture.
Our advanced nonwovens are playing
a crucial role in enabling companies to
create technologies that hope to address
climate change challenges.
James Cropper works closely alongside
aerospace and automotive OEMs
to develop advanced material solutions
which deliver lightweight functionality
to composite parts. In use on over 20,000
commercial aircraft, and working with
customers in advanced air mobility
(AAM), we are continuously developing
composite products which offer reduced
weight, greater fuel efficiency and
lower emissions.
Our innovative range of metal-coated
veils have been developed to provide
electromagnetic shielding for batteries
in electric vehicles and AAM. Easily
incorporated into the composite
part, this solution delivers weight
reduction to the battery box and
improved operational efficiency
to the manufacturer.
Despite recent global economic and
geopolitical headwinds, sales of luxury
items continue to see year-on-year
market growth.
The evolution of luxury packaging
trends reflects wider societal changes,
including increased environmental
awareness and the desire to explore
new and innovative ideas.
Premium fashion retailers saw a 5.5%
increase in sales to February 2024 and it
is forecast that global luxury spending
is expected to grow by 4-8% per year to
2030, with Gen Z expected to purchase
luxury items 3-5 years earlier than
previous generations.
An increase in sales of premium and
luxury goods brings demand for luxury
packaging solutions.
WHAT THIS MEANS
FOR JAMES CROPPER
Premiumisation of packaging will become
essential for luxury consumers. Our
recently installed Embossing Centre
of Excellence and laboratory, featuring
state-of-the-art monitoring equipment
and optical 3D scanning capabilities,
means that we can produce textured paper
of the highest quality, enabling us to meet
growing customer demand for alternatives
to plastic which maintain surface
aesthetics and functional characteristics.
We also see opportunities for further fibre
innovation, where our Colourform® offering
provides another differentiating factor in
an increasingly competitive market.
MARKET TRENDS
BESPOKE
PRODUCTS
We align our innovative range of products
and solutions with secular global trends such as:
clean energy; lightweighting; sustainability;
and reduce, re-use, recycle.
CLEAN
ENERGY
NET ZERO
LIGHT-
WEIGHTING
CO2
In November 2022, the European
Commission released proposals for
regulations governing the types of
packaging which can be placed on
the EU market together with rules
on packaging waste management
and prevention.
These are expected to apply to all
packaging, regardless of material,
and to packaging waste, whether such
waste is used in or originates from
industry, other manufacturing, retail
or distribution, offices, services
or households.
The regulations are designed to
minimise the environmental impact
of packaging circulated in the EU
(ensuring that all packaging shall be
recyclable by 2030) and align with
broader trends such as the promotion
of recyclable replacements and the
optimisation of packaging designs to
reduce weight and volume.
Our bespoke moulded fibre offering
combines expertise in fibre and colour
with a relentless ambition to embed
sustainability wherever possible.
Made using 100% renewable fibres from
sustainably-managed forests or recycled
content from our world-class recycling
plant – which gives new life to post-
consumer waste including CupCycling®
used coffee cups – we create moulded
fibre for a circular economy.
Our expertise, innovation and
commitment to customers mean that
we are ideally placed in relation to this
growing opportunity.
REDUCE,
RE-USE,
RECYCLE
Every brand is unique, and few settle
for a standard paper or square box.
Luxury Brands increasingly seek to
leverage packaging as a storytelling tool,
creating an immersive experience that
unfolds as their products are unboxed.
We expect this trend to continue and
for brands to make greater levels of
commitment to sustainability.
Brands are no longer satisfied with
someone else’s choice. The need to
reinvent, innovate and elevate paper
and moulded fibre product offerings
is essential in creating something
tailor-made that’s right for each brand.
Our expertise in colour and fibre, and
close customer relationships enable
us to truly add value; allowing brands
to take control of their packaging
with unlimited options across colour,
surface embellishment, and fibre source
including recycled content.
This expertise coupled with our award-
winning moulded fibre Colourform®
offering for the luxury market will
enable us to continue to exceed
customer expectations.
LUXURY
SPEND
MARKET TRENDS
16
17
18
19
I am pleased to provide a review of the financial year ended 30 March 2024.
At the outset of the year, we laid out our Group strategy to accelerate growth in revenue and profitability. This six-point plan has
formed the basis for the decisions and actions we have taken during the year and, despite challenging market conditions in the
second half of the year particularly, I am pleased that we have made progress towards our strategic goals. James Cropper is now
a significantly more efficient business and is strongly positioned in various markets that are expected to grow in the years ahead.
ADVANCED MATERIALS
PAPER & PACKAGING
Trading in the first half of the year
showed continued momentum from
the strong finish to the previous financial
year. Much work was done to identify
growth opportunities within existing
and new markets.
Despite strong trading in the first half,
difficult market conditions during late
2023 and early 2024 across both the
Advanced Materials and Paper &
Packaging businesses resulted in a
downward revision to the Board’s
full-year expectations which was
announced on 17 January 2024.
These revised expectations in January
were, however, exceeded at the full year,
owing to a strong focus on business
development, pricing protection,
operational improvements, and reduced
input costs – a great effort from across
all parts of the business against
a difficult backdrop.
My sincerest thanks, once again,
are extended to all our valued
customers for their continued
support and to our talented employees
who have been so committed to serving
our customers in the face of such
challenging market conditions.
FY24 (£'000)
FY23 (£'000)
REVENUE
102,968
129,664
ADJUSTED EBITDA (APM4)
6,606
9,045
ADJUSTED OPERATING PROFIT (APM 1)
1,977
4,767
ADJUSTED PROFIT BEFORE TAX (APM 2)
758
3,195
CHIEF EXECUTIVE'S REVIEW
STRATEGIC REPORT
FY24 (£'000)
FY23 (£'000)
REVENUE
34,503
37,187
ADJUSTED EBITDA (APM4)
9,280
10,714
ADJUSTED OPERATING PROFIT (APM1)
7,715
9,244
FY24 (£'000)
FY23 (£'000)
REVENUE
68,465
92,477
ADJUSTED EBITDA (APM4)
(2,473)
(1,537)
ADJUSTED OPERATING LOSS (APM1)
(5,138)
(3,904)
Our focus for FY2024 in the Paper &
Packaging business was to consolidate
around more profitable and sustainable
products and markets, particularly
solutions for luxury packaging, through
a streamlining of our portfolio. In April
2023, we commenced a collective
consultation with our Trade Union for
a restructuring of the business around
a reduced asset base and a right-sized
workforce, driving productivity and
efficiency from continuous operation
under an optimised shift pattern.
We also began the integration of our
Colourform® business within the Paper
business under one Paper & Packaging
business. The interests of our
stakeholders were at the heart of this
process, not least our people, and I am
pleased to have seen strong engagement,
support, and resilience throughout.
The restructuring activity resulted in
a reduction of 15% of our workforce,
primarily through voluntary redundancy.
As announced in January 2024, the
Paper & Packaging business experienced
a significant downturn in volume during
the second half of the year caused by
supply chain destocking, compounded
by the impact of high inflation on
consumer confidence. Despite volume
pressures, customer retention remained
high with strong relationships at the
channel, converter and end-customer
level. Lower input costs, mix
improvements and productivity
initiatives as well as maintenance
of strong average selling prices helped
to protect margins.
The restructuring activity was completed
by the end of December 2023, with
continuous running in production across
fewer paper assets and with work
ongoing to optimise the new operating
model. Our restructuring activities and
taking cost out of our Paper & Packaging
business has driven margin improvement.
The future project pipeline is encouraging
and forward indicators, such as order
intake, point to signs of market recovery
in FY2025.
For more information, please see Paper
& Packaging in Focus from page 27.
The Advanced Materials business
performed well in the first half, building on
its work to develop specifications with
hydrogen electrolyser OEMs, where its
technical and process capabilities
continued to provide differentiation in this
sector. Demand in the hydrogen fuel cell
sector also remained buoyant in the first
half, as did the aerospace and automotive
sectors within Composite Solutions.
The second half saw a marked slowdown in
hydrogen fuel cell market demand, driven
largely by the sluggish uptake of hydrogen
powered passenger cars. This was partially
offset by growth in the electrolyser
business albeit at a level below the Board’s
original expectations due to delays in
major infrastructure projects. Throughout
the year we continued to acquire new
customers and progress trials and develop
specifications with key electrolyser OEMs.
The business is well positioned to take
advantage of expected growth in this
sector over the medium term.
At the same time, we invested significant
effort in enhancing our pipeline of
opportunities through developing
closer relationships with customers
and launching a reinvigorated portfolio
and market growth plan, all aligned to
selected key focus markets where we
see opportunity for growth.
We also established an Advanced Materials
Innovation Group, linking together the
technical teams from our Burneside,
Launceston and Schenectady sites to
develop and progress innovation
roadmaps for each of these key focus
markets. This is part of our focus on
technological advancement and the
development of value-adding products and
services for existing and new customers.
Continued technical innovation and high
service levels contributed to maintaining
margins in the year. Input costs were well
managed through supplier negotiation and
a focus on productivity initiatives from
operations teams. In addition, the business
has concentrated on accelerated market
growth opportunities in battery
technology, aerospace and advanced air
mobility (AAM), EMI shielding, PEM
electrolyser, hydrogen fuel cell and
carbon capture.
Revenues across the division totalled
£34.5m for the year, a reduction of 7.3%
(FY23: £37.2m). Adjusted operating profit
of £7.7m was £1.5m below prior year
(FY23: £9.2m) due to the drop in revenue.
Looking forward, our aim is to be
recognised as true experts and innovators
within our key focus markets, building
upon our know-how and strong
relationships with customers and
partners, and to selectively invest in the
development of further value-adding
solutions to drive growth.
For more information, please see
Advanced Materials in Focus from page 23.
Uniting our exceptional team worldwide
under one James Cropper company
will be transformative and powerful.
Steve Adams, Chief Executive Officer
CHIEF EXECUTIVE'S REVIEW
GROUP
20
21
GROUP STRATEGY
Our Group strategy is built around six key pillars, enveloped within a commitment to a safe working environment,
designed to drive value growth for all our stakeholders:
PROFITABLE GROWTH THROUGH
NEW CUSTOMER ACQUISITION:
Targeting secular growth trends such as clean
energy, lightweighting, sustainable packaging
and reduce - re-use - recycle.
WORLD CLASS EXECUTION:
Long-term investment programme to simplify
processes and systems that will enable smarter
access to data and drive improved productivity
and performance. Implementing a lean business
programme across the Group.
TECHNOLOGY & INNOVATION:
Our Centre for Innovation is driving decarbonisation
of the Group’s operations; making ever greater use
of recovered fibres; helping to create technology
roadmaps in emerging markets such as green
hydrogen, fuel cells and carbon capture.
INSPIRING OUR PEOPLE:
Supported by our Code of Ethics and Behaviours
to build a global and diverse workforce. Investing
in workplace facilities, engagement tools and
leadership development programmes.
LEADERS IN SUSTAINABILITY:
Recognising both our responsibility to reduce
and ultimately eliminate emissions through
the installation of our Low Carbon Energy
Centre and providing solutions which enable
our customers to transition to sustainable
products and energy alternatives.
BUILD THE BRAND:
Positioning the Group along an exciting spectrum from
heritage to cutting edge that leverages the brand value
of the James Cropper name across all our markets and
geographies. Repositioning ourselves to better serve
our target customers and provide a stronger
connection to our Purpose.
To minimise our impact on the local
environment in the Lake District World
Heritage Site, we are striving to clean
and re-use the water essential to the
papermaking process, minimising the
amount discharged but also reducing
the amount abstracted from the river.
Looking to the longer term, we are seeking
to use artificial intelligence and machine
learning to create predictive models that
help improve productivity and efficiency
whilst creating a culture of innovation
across the Group by encouraging shared
learning and collaboration to create new
and unique ideas.
INSPIRING OUR PEOPLE
Our people continue to be critical to the
success of our business and never more
so than in the last year. The
unprecedented restructuring and
alignment to a new operating model in
our Paper & Packaging business was
conducted under a collective agreement
with our Trade Union.
A series of meetings were held from
April to September 2023 under a
dedicated Transformation Leader and
team, culminating in a positive ballot
vote for the changes. The successful
outcome was a testament to both sides
in upholding our Values of Forward
Thinking, Responsible and Caring and I
want to commend our Trade Union for
their commitment to the process.
Further to the implementation of our
renewed Code of Ethics and Behaviours
last year, this year we launched a new
anonymous ethics hotline via an
independent provider, Safecall.
During a period of such change, it was
important to provide the ability for all
employees to confidently raise concerns,
should they arise.
We also conducted our third online
employee opinion survey in the latter
part of the year to capture the voice of
our employees. A slightly lower
engagement score to the previous year
reflected a degree of concern and
uncertainty over the external trading
environment and internal changes.
The Executive team has built a
comprehensive communication and
engagement programme that will be
rolled out during FY2025 to enhance
confidence, both in our strategy for future
growth but also in bringing stability to
our organisation moving forward.
We are also committed to building the
strength and capability of our leadership
population. On the back of our
successful in-house LEAP leadership
development programme, we will now
be bringing leaders together, Group-
wide, to engage around a revised set of
James Cropper Leadership Standards,
designed to reinforce the responsibility
of all our leaders to help their teams
work towards a common goal of growth.
LEADERS IN
SUSTAINABILITY
We made significant strides towards our
net zero carbon ambition during the
year with the commencement of the civil
construction work in January 2024 to
clear the site for our new Low Carbon
Energy Centre which will house the
proprietary technology required to
decarbonise our paper making
operations. We also secured £4.2m in
innovation funding from the Industrial
Energy Transformation Fund (IETF) to
support the project. Work is still ongoing
to complete the detailed engineering
design phase as well as exploring
alternative phasing for the build work to
ensure an optimised return on
investment. A number of third parties
continue to express interest in our
pioneering capability and we are in
discussions on how to accelerate the
deployment and take up of the
technology for broader industry benefit.
SAFE WORKING
ENVIRONMENT
Our commitment to a safe working
environment remains unwavering. This
year we set up a Central Safety Committee
which I chair, which is made up of senior
leaders, including the Trade Union, from
across the Group. The committee is
tasked with delivering programmes that
will move our organisation from being
reactive to proactive and fully engaged in
our safety journey.
As a company, despite the rigour in our
safety systems and processes our
challenge continues to be one of hearts
and minds and behavioural safety.
We have a suite of activities aimed at
improvements in this area, including our
recent launch of our Committed to
Safety programme and the introduction
of our “10 Golden Rules” campaign.
I am also delighted to have made the
appointment of a new Group Head of
Health and Safety. Ross Troughton, who
joined us in June 2024, is a pragmatic
and experienced health and safety
leader who brings a wealth of industry
experience and who will work directly
under me to drive our safety
improvement actions across all locations
and functions within the Company.
BUILDING THE BRAND
During the last year we have invested
considerable creative time in building an
updated brand position for James
Cropper, aligned to our growth strategy.
This refresh recognises we are globally
minded but rooted in our communities.
We are inventive and open to change,
but proud of where we have come from.
We are forging new materials and
possibilities, but still place human values,
knowledge and craft at the heart of what
we do. These are the characteristics and
realities of James Cropper that have
inspired the evolution of our new
branding, the first example being this
new, reformatted annual report.
Our 179 years of expertise, our ability
to reinvent ourselves and adapt in the
face of challenges and our proven track
record of pioneering and innovation,
together give us real traction with our
global customers.
Coming together as one James Cropper
company also allows us to harness the
incredible ingenuity of our people and
to collaborate in a more disciplined way
to drive synergies and growth.
LOOKING FORWARD
WITH CONFIDENCE
The foundations are in place, and we
remain committed to delivering against
our six strategic priorities. Uniting our
exceptional team worldwide under one
James Cropper company will be
transformative and powerful.
Trading in the current year-to-date
is in line with the Board’s expectations,
and comfortably within the bank
covenants reset in June 2024. I am
confident that, despite the external
challenges we continue to face, our
progress in the last year will drive
increased value for our shareholders
through accelerated growth in our
market-focused segments.
Steve Adams
Chief Executive Officer
22 July 2024
EXECUTIVE LEADERSHIP
During the year we made several
significant changes to our executive
leadership team to bring enhanced
commercial discipline and alignment
to our growth strategy.
In November, Andrew Goody joined
the Company as Chief Financial and
Operating Officer, succeeding Isabelle
Maddock who stood down in June 2023.
Andrew’s focus is to apply his experience
and expertise to further enhance our
financial processes, capital allocation
and growth strategy.
Matthew Ratcliffe was appointed into
the new role of General Counsel and
Company Secretary in September 2023,
succeeding Jim Aldridge who stood down
as Company Secretary in May 2023.
As a qualified lawyer, Matthew will
focus on enhancing our commercial
contractual capability, supporting our
teams with commercial negotiations
around supply, development and supplier
agreements as well as bringing rigour
to the company secretariat.
Patrick Willink took on the role of Chief
Innovation Officer, relinquishing his
leadership of the Colourform® business
as we consolidated that operation
together with our Paper business.
Reigniting our innovation engine is core
to our purpose and pioneering spirit as
we seek to build next generation
technology platforms in both Advanced
Materials and Paper & Packaging.
Richard Bracewell stepped into the Paper
& Packaging Managing Director role after
having successfully orchestrated the
restructuring and consolidation of
that business as Transformation Lead.
Upon the resignation of James
Gravestock as Managing Director for our
Advanced Materials Business in January
2024, we have appointed Andy Walton
into that role. Andy joins us from Victrex
and has over 30 years of experience in the
chemicals, sustainable solutions, and
advanced materials sectors. He has led
multiple global businesses to deliver high
performance solutions to OEMs and Tier
1 suppliers within Aerospace, Automotive,
Energy and Industrial end markets.
I have huge confidence in this
strengthened executive team to drive
shareholder value as we build out our plan.
CAPITAL EXPENDITURE
The drop in capital expenditure in the
year from £5.8m to £3.8m reflects our
response to the challenging market
conditions. In addition, previous
investments in capacity and capability,
combined with the restructuring of our
Paper & Packaging business and a
concerted effort to forecast demand
more accurately have allowed us to
optimise our capacity requirements. Our
operations teams in both businesses have
adopted lean manufacturing processes to
drive productivity and more efficient
machine utilisation.
We have continued to invest in our
hydrogen business to ensure sufficient
capacity to meet anticipated demand and
during the year we commenced the first
phase of construction for our new
decarbonisation energy centre with site
clearance and groundbreaking
for the new foundations.
WORLD CLASS EXECUTION
During the year we have made great
strides to improve our cost base as well
as drive productivity and efficiency
through the use of lean manufacturing
tools across all parts of the business.
Stock reduction programmes, sourcing
savings and outsourcing, such as for
pallet making, have all been in focus.
We also appointed Paul Bonnefin as
Information Systems Director to
strengthen our systems infrastructure and
architecture capability and bring focus to
our ERP requirements assessment.
TECHNOLOGY
AND INNOVATION
Pioneering innovation continues
to be critical to our growth plan.
Our innovation teams have been working
on a number of strategically important
development projects focused on
building new opportunities as well as
protecting the Company.
In addition to the work of the Advanced
Materials Innovation Group, we have
been focused on the development of
technical papers that build on our
expertise of using many different fibres
and draws on the experience and
knowledge from all the Group’s
businesses. We are seeking to push the
boundaries of our fibre knowledge by
deriving new sources of fibre through
pioneering work to recover papermaking
fibres from waste textiles.
01
04
03
02
06
05
CHIEF EXECUTIVE'S REVIEW
STRATEGIC REPORT
22
23
After a strong first half in FY2024,
the second half year was characterised
by a marked slowdown in demand in
the hydrogen fuel cell sector. Against
that backdrop, the business focused
on robust cost control together with
operational excellence and pricing
to maintain margins.
KEY FOCUS MARKETS
At the same time, we invested significant
effort in enhancing our pipeline of
opportunities through developing
closer relationships with customers
and launching a reinvigorated portfolio
and market growth plan, all aligned
to selected key focus markets where
we see opportunity for growth (for more
information, see page 25).
We also established an Advanced
Materials Innovation Group, linking
together the technical teams from our
Burneside, Launceston and Schenectady
sites to develop and progress innovation
roadmaps for each of these key focus
markets. This is part of our focus on
technological advancement and the
development of value-adding products
and services for existing and new
customers. In FY2024, 16.1% of revenues
in the Advanced Materials business
came from sales of new products.
LEADERSHIP CHANGES
In April 2024, we announced the
appointment of Andy Walton as
Managing Director for the Advanced
Materials division in succession to
James Gravestock who stepped down
from the business in January 2024.
Andy brings a wealth of domain
experience to the Advanced Materials
team, and we look forward to our next
phase of growth under Andy’s
commercial leadership.
To support our continued focus on
technology and innovation, in 2024 we
appointed Dr Dave Hodgson to the role
of Chief Technical Officer for the division.
Dave was previously Managing Director
of our hydrogen electrolyser business
and brings a wealth of technical and
industry experience to the role.
To build upon our position within
the hydrogen electrolysis market,
we aligned our commercial approach
under the leadership of Tom Sharrock
who was appointed Global Head
of Sales for Hydrogen Coatings,
to enhance our focus on developing
the opportunity pipeline.
OUTLOOK
Our aim is to be recognised as true
experts and innovators within our
key focus markets, building upon our
know-how and strong relationships
with customers and partners, and to
selectively invest in the development
of further value-adding solutions to
drive growth. As part of the Group’s
rebranding exercise, new product
portfolios aligned to our key focus
markets have been developed to
enable customers better understand
the technology and solutions we offer.
In support of our commitment to world
class execution, we are implementing a
LEAN strategy to drive efficiencies and
operational excellence and continuing
to invest in the development of our
people with a focus on leadership, talent,
and performance.
Looking forward, our know-how,
capabilities, and strong industry
relationships put our Advanced
Materials business in a strong position
to capitalise on the significant market
growth expected in the medium and
long term.
ADVANCED MATERIALS
IN FOCUS
ADVANCED MATERIALS IN FOCUS
DIVISIONAL REPORT: ADVANCED MATERIALS
Our aim is to
be recognised
as true experts
and innovators
within our key
focus markets.
24
25
02
AEROSPACE
ADVANCED AIR MOBILITY
Our customers are amongst the
largest aerospace manufacturers
in the world, including many
Fortune 100 and 500 companies.
Our portfolio of products are
in use on most commercial
aircraft, delivering composite
structure, improved processing,
light weighting efficiency
solutions, and more.
CARBON CAPTURE
We are actively partnered with
leading companies in direct air
capture and point-source carbon
capture. Our non-wovens are used
sequester CO2 from the environment
through solid sorbent technology.
EMI SHIELDING
We are one of few companies in the world able to manufacture
metal coated carbon fibre non-wovens. This unique range of
products imparts shielding of electromagnetic radiation, and
is being used and qualified by aerospace and automotive
manufactures globally as they transition from heavy metal
components to lightweight composite parts.
BATTERY TECHNOLOGY
We manufacture numerous solutions
for the battery market. From
electrocatalysts for flow
batteries, to electrode materials
increasing current density of next
generation lithium-ion batteries,
we work with manufacturers to
create solutions for some of the
most innovative battery chemistries
on the market.
HYDROGEN FUEL CELL
Our advanced carbon fibre non-wovens are some of the
most uniform and highly specified on the market. With
quality second to none, our automotive fuel cell
customers have worked along side our team of
materials scientists for over 20 years to develop gas
diffusion layer substrates, known as GDL substrate.
These materials are further processed and become an
integral part of the fuel cells.
PEM ELECTROLYSER
Our proprietary coating
technology, Resillion, is
empowering the hydrogen
generation industry. We are
strategic partners with our
customers, tailoring our
coatings to their unique
system requirements and
enabling them to manufacture
some of the most efficient PEM
electrolysers on the market.
HYDROGEN FUEL CELL
Hydrogen fuel cells utilise the chemical
energy of hydrogen to cleanly and
efficiently produce electricity. Fuel cells
have a variety of applications and can
provide an energy source for systems
as large as power stations and as small
as laptop computers.
Fuel cells comprise various highly
technical components, including the
critical Gas Diffusion Layer (GDL).
The GDL forms the basis of both the
anode and cathode, and is responsible
for water management, the transport
of reactants, electricity and heat, as
well as providing structural support.
Hydrogen fuel cells electric vehicles
(FCEVs) are an attractive alternative to
battery electric vehicles due to faster
refuelling, greater ranges, lower weight
and thus increased payload capacity
for HGVs.
Government policies are incentivising
the adoption of FCEVs, including:
• The US Inflation Reduction Act
includes a 30% investment tax credit
for FCEV manufacturing projects.
• US businesses can claim $7,500
Clean Vehicle Credit and 30%
credit for commercial FCEVs.
• China aims to have 50,000 FCEVs
on the road by 2025 and is offering
subsidies to cities that promote
hydrogen powered vehicles.
For over 20 years we have worked
alongside leading manufacturers to
develop and manufacture the highest
quality GDL substrates. As testament,
our products are currently in use on
over 60,000 fuel cells around the globe.
With continued government funding
and drive to meet net zero targets,
our Advanced Materials business
is supporting customers in the
development of the next generation of
fuel cell products and is well positioned
to take advantage of continued growth
in the market.
PEM ELECTROLYSER
Proton exchange membrane (PEM)
electrolysers use electricity to split
water molecules, producing hydrogen
which is stored for later use as a source
of energy. The process generates
low-carbon hydrogen – oxygen being the
only by-product – which has a significant
role to play in the transition to clean
energy and in tackling climate change.
PEM electrolysis is considered the
optimal source of hydrogen generation
due to its high efficiency, high operating
density, and ability to operate at high and
differential pressures. PEM electrolysis
operates effectively from variable power
supplies, which provides advantage in a
world utilising a multitude of sources
such as solar and wind.
Globally there is currently 11 GW
of hydrogen generating electrolyser
capacity which includes PEM and
other technologies. It is expected
that this will increase significantly
to 170-365 GW by 2030.
In conjunction with leading electrolyser
OEMs, our team of electrochemists have
developed some of the most advanced
coatings which are designed for
application to critical components
within PEM electrolysers; providing
protection and extending operational
life by up to 60% when compared with
uncoated components and lowering
the cost of generating green hydrogen.
From our manufacturing sites
in the UK and USA, and our close
collaborations with PEM electrolyser
OEMs, we are well positioned for
considerable market growth and have
developed scale up solutions to enable
our customers to meet future demand.
STRATEGIC REPORT
01
ADVANCED MATERIALS CASE STUDIES
ADVANCED MATERIALS GROWTH MARKETS
26
27
It has been a transformational year for
the Paper & Packaging division, but also
one with many external challenges.
Against a broader decline in demand
across the paper industry, for example
CEPI reported a 27.5% drop in demand
for graphic paper across 2023, we saw
a significant reduction in our sales
volumes in the second half of the year.
A key influencing factor was that many
packaging customers built up stock
following the pandemic, but a slowdown
in consumer demand led to full supply
chains and significant destocking as
companies sought to preserve cash.
Whilst there was a drop in volume
across many sectors of the market,
within creative papers, the art and
photography sector proved much
more resilient, and we saw strong
performances from our key customers
in the sector.
Despite volume pressures, customer
retention remained high as the business
benefits from strong relationships at the
channel, converter, and end customer
levels. Lower input costs (energy and
carbon tax), mix improvements and
productivity initiatives, as well as
maintenance of strong average selling
prices helped to protect margins
during the year.
BUSINESS
TRANSFORMATION
During the year we delivered a major
transformation programme to right size
the business around a streamlined
product portfolio focussing on the more
profitable sectors of the creative papers
and luxury packaging markets.
To drive productivity and reduce costs,
the Paper and Colourform® businesses
were combined into a single Paper
& Packaging division with a new
organisational structure,
manufacturing operational model
and shift pattern.
Specifically, following a collective
consultation with the trade union, head
count was reduced by 15% primarily
through voluntary redundancy,
delivering a £2.5m annual cost saving.
The asset base was reduced by one paper
machine alongside the introduction of
seven-day continuous manufacturing
within papermaking and finishing. This
was effectively supported by a new shift
system, increasing workforce flexibility
through multi-skill training enabling
employees to operate multiple
assets. We are already seeing early
benefits including productivity and
efficiency gains and reduction in
maintenance costs.
Having led the business transformation
programme and with deep knowledge
of the Group, Richard Bracewell was
appointed as Managing Director for
Paper & Packaging in August 2023 to
reposition the division, ensuring
long-term differentiation and market
competitiveness. With growth front and
centre, Richard has made strategic hires
including Neil Strain who joined in
October 2023 as the new Supply Chain
& Production Director. More recently
in March 2024, Gareth Fisher joined
as Head of Sales, marking an important
milestone as we strengthen our
strategic position to accelerate
business development.
HIGHLIGHTS
Our new partnership with Remy
Cointreau owned Scotch whisky brand
Bruichladdich saw the Colourform®
team reimagine traditional packaging
for the whisky market. The work is an
example of best practice for
sustainability and innovation.
Complementing successful existing
relationships with Perrier Jouët and
Maison Ruinart, this relationship
demonstrates our value proposition
which we are successfully leveraging
with some of the world’s most
recognisable brands.
Likewise, our more than 40-year
relationship with the Royal British
Legion was thrown into the spotlight in
2023, through our work to redesign a
British icon. The all paper
Remembrance Poppy was launched for
the first time containing no single-use
plastic, and with a 40% reduction in
carbon emissions. The paper used is a
demonstration of our recovered fibre
expertise, comprised of a blend of
renewable fibres from responsible
sources; 50% of which has been
recovered from paper coffee cup
production via James Cropper’s
CupCycling® facility.
The installation of a new state of the art
energy efficient boiler in our upgraded
power plant in April 2023 has not only
lowered costs but is a significant step
toward our carbon emissions reduction
goals. Our commitment to better
energy solutions was more recently
recognised with the award of
a £4.2m grant awarded as part of
the Government’s Industrial Energy
Transformation Fund (IETF).
The funding will support a pioneering
engineering solution to electrify our
heat demand, which is being developed
by our expert team.
OUTLOOK
It has been a challenging year for the
business, both in terms of the amount
of change that our colleagues have faced
and the difficult market conditions.
The positivity and focus of the team has
been incredibly impressive and we are
grateful for their enthusiasm for the
journey we are on together; facing up
to the challenges and embracing the
new ways of working.
Towards the end of Q4, we started to
see a recovery in orders with the trend
continuing in Q1 FY2025. Longer term
industry forecasts within Luxury
Packaging are strong with spending
on luxury goods set to grow by 4-8%
CAGR from 2023 to 2030.
Having demonstrated our agility in
repositioning and remaining forward
thinking, we are confident that the
Paper & Packaging business is now in
a competitive position to achieve long
term profitable growth, whilst building
resilience to ongoing external challenges.
PAPER & PACKAGING IN FOCUS
28
29
BRUICHLADDICH
WHISKY INDUSTRY
FIRST
The coloured wrap for The Bruichladdich
Eighteen and The Bruichladdich Thirty
is the first of its kind in the whisky space.
Made from fully recyclable paper pulp
and moulded to the shape of the
Bruichladdich proprietary glass bottle,
the wrap is the definition of conscious
modern luxury.
Bespoke in colour and shape with
unique emboss and deboss features,
the design also includes a branded,
oversized custom clasp feature. Using
100% fresh fibre the wrap is significantly
lighter than previous packaging
solutions without compromising
strength or integrity while significantly
reducing Bruichladdich’s CO2 impact.
James Cropper produces the moulded
fibre packaging using 100% green energy
and the wood pulp used in its creation
is sourced from sustainably managed
forests. Brought to life using a single
material with no glue, the packaging is
100% recyclable in every household.
ADDRESSING
MISCONCEPTIONS
AROUND SUSTAINABLE
PACKAGING
In 2024, James Cropper launched the
‘Sometimes it is Black and White’
campaign in conjunction with Foilco
and Dreyer Kliche to dispel myths
around sustainable packaging.
Launched at Packaging Premiere in
Milan, the campaign aims to inspire
brands to embrace sustainable
practices, redefine industry standards,
and lead the way towards a more
environmentally conscious future.
It demonstrates that high quality paper
and packaging can be manufactured
from a multitude of sources (including
recycled coffee cups, office waste or
recovered denim) and that even
complex foiled designs can be recycled
repeatedly. The showcased designs push
boundaries and test the limits of paper
and foils with striking multi layering
and embossed patterns.
Promoting sustainable innovation,
the campaign offers brands the
opportunity to learn and understand
technologies which can open the door
to a new world of packaging
opportunities and enable progress
towards ESG objectives.
01
02
We are proud to partner with Bruichladdich
on reimagining traditional packaging for
the whisky market and creating an example
of best practice for sustainability and
innovation. The result is the first ever
coloured wrap; a true example of future
looking, disruptive thinking.
This partnership further establishes our position as a leader in creating
packaging that is both sustainable and beautiful. Every element of the
design, from the light-weight materials used to the intricate emboss
features and colour, have been carefully considered – elevating the
drinking experience for the consumer.
Richard Bracewell, Managing Director, Paper & Packaging
CASE STUDIES: PAPER & PACKAGING
PAPER & PACKAGING CASE STUDIES
We have created sustainable packaging
that has never compromised on quality
across a number of sectors including wine,
spirits, fashion and beauty. The truth is
environmentally friendly packaging can
coexist in any luxury market. It is possible
to have full recyclability, beautiful aesthetics
with environmental responsibility.
Kate Gilpin
Product Manager, Luxury Packaging.
30
31
COSTS AND EXPENSES
Material costs fell by £13.8m from
£48.6m in the prior period to £34.8m
in the financial period to 30 March
2024, dropping from 37.4% of revenue
in the prior period to 33.8%. The drop
in material costs as a percentage of
revenue reflects lower average raw
material input prices during the
period and favourable revenue mix,
with higher margin Advanced
Materials revenue increasing to 33.5%
of total revenue (prior period: 28.7%).
Energy costs fell by £8.1m from £15.2m
in the prior period to £7.1 in the
financial period to 30 March 2024 due
to the drop in energy prices and lower
energy usage as a result of reduced
production volumes and carbon
efficiency measures.
Employee costs of £34.5m in the
financial period to 30 March 2024
were in line with the prior period but
include £1.8m of employee related
exceptional costs in respect of the
restructuring of the Paper & Packaging
business. Underlying cost savings from
the headcount reductions delivered as
part of the restructuring were able to
offset both the exceptional
restructuring costs themselves and
the impact of our annual pay award of
7.6%, which reflected the elevated UK
inflation environment in 2023,
Other expenses fell by £6.0m from
£25.5m in the prior period to £19.5m
in the financial period to 30 March
2024 with savings achieved in most
areas, notably distribution, legal,
consulting and travel costs. These
savings reflect a combination of lower
business activity and targeted cost
reduction programmes.
ALTERNATIVE PERFORMANCE MEASURES
The Board uses four alternative performance measures (APMs) to evaluate business performance. The purpose of these APMs is to
highlight underlying business performance by removing the impact of exceptional gains and losses and removing IAS 19 pension
costs that can vary significantly across reporting periods.
APM 1 “ADJUSTED OPERATING PROFIT”
Adjusted operating profit refers to operating profit
before interest and prior to the impact of IAS 19 and
exceptional items.
APM2
“ADJUSTED PROFIT BEFORE TAX”
Adjusted profit before tax refers to profit before tax
prior to the impact of IAS 19 and exceptional items.
APM3
“ADJUSTED PROFIT/(LOSS) BEFORE TAX AFTER
EXCEPTIONAL ITEMS”
Adjusted profit/(loss) before tax refers to profit/
(loss) before tax prior to the impact of IAS 19.
APM4
ADJUSTED EBITDA
EBITDA refers to profit before interest, tax,
depreciation and amortisation. Adjusted EBITDA
is EBITDA prior to the impact of IAS 19 and
exceptional items.
CHIEF FINANCIAL
OFFICER'S REVIEW
RESULTS FOR THE PERIOD
2024
2023
£’000
£’000
Group Revenue
102,968
129,664
Adjusted EBITDA
APM4
6,606
9,045
Profit summary
Paper and Packaging Products
(5,138 )
(3,904 )
Advanced Materials
7,715
9,244
Other Group expenses
(600 )
(573 )
Adjusted operating profit
APM1
1,977
4,767
Fair value movement on derivatives
-
(330 )
Net finance costs (excluding IAS 19 impact)
(1,219 )
(1,242 )
Adjusted profit before tax
APM2
758
3,195
Exceptional costs
(5,010 )
(986 )
Exceptional finance costs
(262 )
(109 )
Adjusted (loss) / profit before tax after
exceptional items
APM3
(4,514 )
2,100
Net IAS 19 pension adjustments
Net current service charge required
6
(442 )
Net interest
(753 )
(345 )
Net IAS 19 pension impact
(747 )
(787 )
(Loss) / profit before tax
(5,261 )
1,313
The full Statement of Comprehensive Income is on 89.
STRATEGIC REPORT
CHIEF FINANCIAL OFFICER'S REVIEW
REVENUE
Group revenue for the financial period
of £103m was 21% below the prior
period figure of £129.7m, principally
due to a weakening of the paper and
packaging market, particularly in the
second half of the year.
Revenue in the Paper & Packaging
business fell by £24m or 26% in the
period due to energy surcharges of £9m
in the prior period combined with weak
end-market demand as a result of
economic uncertainty and high
inflation, exacerbated by destocking
across the onward supply chain.
Revenue in the Advanced Materials
business fell by £2.7m in the period
reflecting a slowdown in the hydrogen
fuel cell market with customers
scaling back trails and manufacturing
volumes due to weaker end-market
demand. The Advanced Materials
business achieved year-on-year
revenue growth in the electrolysis
segment where market demand
remained more buoyant.
32
33
STATEMENT OF FINANCIAL POSITION (SFP)
2024
2023
£’000
£’000
Non-current assets
41,910
47,122
Total current assets
34,829
43,667
(excluding cash)
Total current liabilities (15,570 ) (21,164 )
(excluding loans
and borrowings)
Non-current liabilities
(2,772 )
(4,826 )
- excluding borrowings
58,397
64,799
Net IAS 19
(17,293 ) (16,140 )
pension deficit
41,104
48,659
Net borrowings
(15,537 ) (16,594 )
Equity shareholders'
25,567
32,065
funds
Equity shareholders’ funds fell by £6.5m during the financial
period primarily due to the £4.0m unadjusted post-tax loss for
the period, which included a non-cash fixed asset impairment
charge of £4.4m in the Paper & Packaging business and
exceptional restructuring costs of £2.3m, partly offset by the
£1.4m exceptional pension settlement in the period. The drop in
shareholders' funds in the period also reflects a £1.3m actuarial
loss (net of deferred tax) on the Company's pension schemes
and dividends paid of £0.7m.
The net book value of fixed assets fell by £5.1m across the
financial period, primarily due to the £4.4m impairment of the
carrying value of the tangible fixed assets in the Paper business
noted above. Capital expenditure of £3.8m (prior period £5.8m)
was scaled back during the period in response to challenging
market conditions and as a result was below the underlying
depreciation charge for the period.
Working capital fell by £2.9m across the financial period due to
the drop in revenue and a focus in the second half of the period
on reducing stock levels in response to market conditions.
Net debt fell by £1.1m across the financial period reflecting
increased focus on cash management.
CASH FLOW
2024
2023
£’000
£’000
Net cash inflow from
7,170
5,550
operating activities
Net cash outflow
(4,315 ) (6,643 )
from investing activities
2,855
(1,093 )
Net cash (outflow)/inflow (1,483 )
622
from financing activities
Net increase/(decrease)
1,372
(471 )
in cash and cash equivalents
Effects of exchange rate
160
400
fluctuations on cash held
Net increase/(decrease)
1,532
(71 )
in cash and cash equivalents
Opening cash and
7,679
7,750
cash equivalents
Closing cash and
9,211
7,679
cash equivalents
The net cash inflow from operating activities in the financial
period of £7.2m (prior period £5.6m) primarily comprises:
• adjusted EBITDA (APM 4) of £6.6m;
• cash inflow from working capital of £2.9m;
• net cash outflow on exceptional items of £1.0m, reflecting
restructuring costs less a cash receipt on settlement of a
historic pension legal dispute;
• pension deficit reduction payments of £1.4m in line with the
agreement with the Trustee following the triennial actuarial
valuation as at 31 March 2022.
The net cash inflow from operating activities was £1.6m above
the prior period despite the drop in Adjusted EBITDA due to an
improvement in working capital and the settlement received on
the historic pension legal dispute.
The net cash outflow on investing activities in the financial
period of £4.3m includes capital expenditure of £3.8m (prior
period: £5.8m) and contingent consideration on the TFP
Hydrogen Products Limited acquisition of £0.25m.
The net cash outflow from financing activities of £1.5m in the
financial period comprises repayments of £1.9m on the US bank
loan and lease liabilities, £0.9m of cash interest payments and
dividends of £0.7m, partly offset by £2m drawn down on the UK
bank loan in the early part of the financial period.
ADJUSTED OPERATING
PROFIT
Adjusted Group operating profit (APM1)
for the financial period of £2.0m was
£2.8m below the prior period figure of
£4.8m, giving an adjusted operating
profit margin for the financial period of
1.9% (prior period: 3.7%).
The Paper & Packaging business
recorded an adjusted operating loss of
£5.1m, a £1.2m deterioration against the
prior period. The impact on adjusted
operating profit of the drop in revenue
in the Paper & Packaging business was
partly offset by a reduction in pulp
prices and energy related costs and by
the cost benefits from streamlining the
business.
Adjusted operating profit in the
Advanced Materials business fell by
£1.5m in the period to £7.7m due to the
drop in revenue and the impact of input
price inflation.
ADJUSTED PROFIT
BEFORE TAX
Adjusted Group profit before tax (APM2)
for the financial period of £0.8m was
£2.4m below the prior period due to the
shortfall in EBITDA, with cost savings
not fully offsetting the drop in revenue.
EXCEPTIONAL COSTS
Exceptional operating costs in the
financial period of £5.0m principally
comprised restructuring costs of £2.3m
incurred in respect of the streamlining
of the Paper & Packaging business, a
non-cash impairment charge of £4.4m as
explained below, a credit of £1.4m from
settlement of a legal claim in respect of
the Group’s pension arrangements and a
credit of £0.4m based on reassessment
of the contingent consideration due in
respect of the acquisition of TFP
Hydrogen Products Limited.
During the period the Group recognised
a £4.4m impairment of the carrying
value of the tangible fixed assets in its
Paper business, reducing the net book
value of those assets at 30 March 2024
from £16.7m to £12.3m. Whilst the Board
remains confident in the future of the
Paper business, it believes that the
reduced fixed asset carrying value
better reflects the current position of
the business after three years of pre-tax
losses and in light of the restructuring of
the business carried out during the
period ended 30 March 2024.
ADJUSTED EBITDA
Adjusted Group EBITDA (APM4) for the
financial period of £6.6m was £2.4m
below the prior period figure of £9.0m.
This reflects the £26.7m drop in revenue
in the financial period to 30 March 2024,
partly offset by the cost savings
achieved in the year. The adjusted Group
EBITDA margin for the financial period
of 6.4% was 0.6% percentage points
below the margin of 7.0% achieved in the
prior period.
STRATEGIC REPORT
CHIEF FINANCIAL OFFICER'S REVIEW
34
35
KEY STRATEGIC AND PERFORMANCE INDICATORS
FY22 ACTUAL
FY23 ACTUAL
FY24 ACTUAL
MEDIUM TERM TARGETS
KEY STRATEGIC INDICATORS
Revenue growth %
33.2%
23.6%
-20.6%
Mid to high single
digits annual growth
Adjusted operating
profit %
4.4%
3.7%
1.9%
Rising to high single
digits
% sales from Energy Solutions
n/a
n/a
11%
Rising to mid-teens
KEY PERFORMANCE INDICATORS
Adjusted EBITDA %
8.2%
7.0%
6.4%
Rising to low double
digits
Operating cash flow (£m)
4.0
5.6
7.2
85-95% of Adjusted
operating profit
Net debt to adjusted EBITDA
ratio
1.4
1.8
2.4
Cycle dependent:
target range 1-2x
Return on Capital Employed
10.8%
9.8%
4.3%
Rising to low to
mid-teens
The Board has set medium term targets for the Group’s Key
Strategic and Key Performance Indicators.
• Annual percentage revenue growth is targeted at mid to high
single digits over the medium term, initially driven by
recovery in the Paper & Packaging business and then by
growth of Energy Solutions revenue within Advanced
Materials. Energy Solutions revenue is defined as revenue
from hydrogen fuel cell, electrolysis and wider renewable
energy applications.
• The Group’s adjusted operating profit (APM1) margin
is targeted to rise to high single digits as a percentage
of revenue. This underpins the target improvements
in Adjusted EBITDA (APM4) margin.
• The Group is targeting operating cash flow conversion at
85-95% of Adjusted operating profit based on continued
robust control of working capital and taking account of
pension fund deficit reduction payments that are included
in operating cash flow.
• The Group’s target percentage return on capital employed is
in the low to mid-teens. The Board anticipates it will take
time to reach this target as the business recovers from the
challenges of the financial period to 30 March 2024.
The Board’s medium-term target is for net debt to be in the
range 1.0x to 2.0x Adjusted EBITDA (APM1), dependent on the
market growth cycle and related capital expenditure plans.
Andrew Goody
Chief Financial and Operations Officer
22 July 2024
NET DEBT, FUNDING AND FACILITIES
2024
2023
Net debt at year-end
£’000
£’000
UKEF UK bank loan
15,000
13,000
US term loan
4,059
4,531
Less capitalised
transaction fees
(145 )
(134 )
Lease liabilities
5,834
6,876
Total Borrowings
24,748
24,273
Less: Cash and
(9,211 )
(7,679 )
cash equivalents
Net debt
15,537
16,594
Funding availability at year-end
Cash and cash equivalents
9,211
7,679
Overdraft
3,500
3,500
Undrawn facility on
-
12,000
UKEF UK bank loan
Funds available
12,711
23,179
at year end
The Group funds its operations from operating cash flow, a UK
bank loan, a US bank loan, lease facilities and also has a £3.5m
overdraft facility to provide additional liquidity.
• The UK bank loan is a £25m facility with HSBC Bank Plc and
National Westminster Bank Plc under the UKEF’s Export
Development Guarantee scheme. At 30 March 2024 £15m (1
April 2023: £13m) was drawn under this facility. The amount
drawn at 31 March 2025 is repayable in 20 equal quarterly
instalments from June 2025 to March 2030. The interest rate
on the facility is SONIA +1.95%. The floating interest rate cost
on the first £15m drawn under the facility is capped at 1.5%
until 31 March 2026.
• The US bank loan is a term facility with HSBC Bank USA at an
interest rate of SOFRA + 2.75%. At 30 March 2024 $5.1m (1
April 2023: $5.6m) was outstanding under the facility. The
facility is being repaid at $150,000 per quarter, rising to
$187,500 per quarter from March 2025 and $225,000 per
quarter from March 2026, with the remaining balance of
$3.2m repayable in December 2026. This facility does not
have any financial covenants.
• The Group has a number of lease liabilities that run for terms
between three and five years that are typically secured on
the asset they were used to purchase at various rates of
interest. The total amount borrowed on these facilities at 30
March 2024 was £5.8m of which £1.1m was repayable within
12 months (1 April 2023: £6.9m borrowed of which £1.3m was
repayable within 12 months).
• The Group has a £3.5m overdraft facility with HSBC Bank Plc
that was renewed in May 2024 and has an annual renewal
date of May 2025 and an interest rate of Bank of England Base
Rate plus 1.95%. The facility was undrawn throughout the
year to 30 March 2024.
The UK bank loan has two financial covenants that are
measured on the company’s financial quarter-end dates. Both
financial covenants have been amended for the June,
September and December 2024 test dates to provide additional
headroom against potential downside scenarios.
• The ratio of net debt to the last 12 months’ EBITDA is required
to be no higher than 3.5. The maximum ratio has been reset
to higher levels for the June 2024, September 2024 and
December 2024 test dates, reverting to 3.5 from the March
2025 test date.
• The ratio of EBITDA to net interest, both calculated by
reference to the 12 months ending on the test date, is required
to be no less than 4.0. The minimum ratio has been reset to
lower levels for the June 2024, September 2024 and
December 2024 test dates, reverting to 4.0 from the March
2025 test date.
The definition of EBITDA for the purpose of these covenants
excludes exceptional items and all IAS19 pension adjustments.
A further covenant relating to liquidity has been agreed for the
period to 31 December 2024, whilst the two financial covenants
are at amended levels.
Further drawdowns on the UK bank loan are not permitted during
the period that the two financial covenants are at amended levels.
The Group was in compliance with its banking covenants at 30
March 2024 and throughout the financial year that ended on
that date.
STRATEGIC REPORT
CHIEF FINANCIAL OFFICER'S REVIEW
36
37
IAS 19 ASSUMPTIONS
The bi-annual IAS 19 valuations are adopted
for statutory reporting purposes and do
not form part of the ongoing management
of the pension schemes. IAS 19 requires the
Group’s actuaries to make assumptions on
a different basis to the underlying
valuations and to discount liabilities based
on corporate bond yields, which does not
reflect the investment strategy of the
schemes that uses government bonds (not
corporate bonds) to partially hedge the
impact of interest rate movements on
future liabilities. As a result, the deficit
under IAS 19 can be volatile across
reporting periods and does not always
move in line with the underlying valuations
that are used to set the Group’s
contributions to the schemes.
The actuarial gains and losses arising from
variances against previous actuarial
assumptions are recognised in the
Statement of Financial Position with
corresponding movements in reserves.
Actuarial changes in previous assumptions
are recognised in the OCI statement.
THE IAS 19 IMPACT ON PROFITS
The Group’s reported profit before tax is stated after the charge required by
IAS 19 in respect of the two defined benefit schemes. In the period ended 30
March 2024 the IAS 19 charge amounted to £747,000 (prior period: £787,000),
of which operating costs accounted for a small credit of £6,000 (prior period:
cost of £442,000) and finance costs accounted for a charge of £753,000 (prior
period: £345,000). The increase in IAS 19 finance costs in the period reflects
the increase in interest rates since the start of the prior financial period.
OPERATING COSTS
The cost of providing pension benefits is included within “employee benefits
costs” in the Statement of Comprehensive Income and includes the costs of
the defined contribution schemes, personal pension plans, defined benefit
schemes, life assurance arrangements, government pension protection
levies and the IAS 19 charge noted above. The IAS 19 charge comprises the
cost of the benefits earned by members of the funded pension schemes in the
current period net of employee contributions, the cost of changes to benefit
entitlements, curtailment and settlement costs and pension protection
levies paid over the period.
FINANCE COSTS
Finance costs comprise the interest cost on the accrued pension scheme
liabilities less the interest income on pension scheme assets. The cost and
income figures are based on the discount rate at the start of the period.
The retirement benefits note to the financial statements can be found on
pages 123-125.
DEFINED BENEFIT SCHEMES TRIENNIAL
VALUATION
The Company is committed to agreeing a funding plan with the Scheme
Trustee based on the triennial actuarial valuation with the aim of returning
the two defined benefit pension schemes to full funding over an appropriate
period of time, taking into account the circumstances of the Group and the
pension schemes.
The most recent triennial actuarial valuations were carried out at April 2022
and calculated the combined deficit of the schemes to be £16.6m. The
previous triennial valuation at April 2019 calculated the combined deficit of
the schemes to be £19.9m.
THE
PENSION
REPORT
The Group operates two defined benefit pension schemes providing defined benefits for a number of its employees; the James
Cropper plc Pension Scheme (the “Staff Scheme”) and the James Cropper plc Works Pension Plan (the “Works Scheme”).
The combined pension scheme deficits of the two defined benefit schemes measured on an IAS 19 basis has increased over the year
from £16.1m to £17.3m (before deferred tax). The table below shows the overall value of the schemes’ assets which have decreased by
4.7% in the period whilst the schemes liabilities decreased by 2.6%.
Staff
Works
Both schemes
Change
IAS 19 pension valuation 2024
Scheme
Scheme
2024
2023
%
Discount Rate
5.00 %
5.05%
4.93 %
4.88%
£’000
£’000
£’000
£’000
Assets
32,480
37,247
69,727
73,165
(4.7 %)
Liabilities
(36,038 )
(50,982 )
(87,020 )
(89,305 )
(2.6 %)
(Deficit/Surplus)
(3,558 )
(13,735 )
(17,293 )
(16,140 )
Funding level- %
90 %
73 %
80 %
82%
The schemes’ liabilities fell during the year due to an increase
of 0.07% in the discount rate and a decrease of 0.15% in
expected future inflation. The schemes’ assets fell during the
year due to lower than expected returns, driven by a reduction
in the value of the liability driven investments as a result of an
increase in government bond yields.
In line with previous years, the IAS 19 valuation includes a
correction for sex-inequalities inherent in Guaranteed
Minimum Pensions (GMPs), along with the estimated cost of
equalising GMPs for past transfer value payments. The “true”
cost of GMP equalisation will take a few years to fully evaluate.
Variances against the original estimates will be recognised in
the Other Comprehensive Income (OCI) statement.
A full retirement benefit disclosure is provided in note 21 to the
financial statements.
STRATEGIC REPORT
THE PENSION REPORT
38
39
PRINCIPAL RISK
LINK TO STRATEGY
Profitable
Growth
World Class
Execution
Inspiring
Our People
Technology
& Innovation
Leaders in
Sustainability
Build
the Brand
Health and Safety
People
Fire
Defined Benefit Pension Scheme
Market Growth
Security of Supply
IT Systems and Network Security
Energy Price Volatility
Legal and Regulatory Compliance
EMERGING RISK
LINK TO STRATEGY
Profitable
Growth
World Class
Execution
Inspiring
Our People
Technology
& Innovation
Leaders in
Sustainability
Build
the Brand
Extreme Weather Events
Climate Policy
Net Zero Emissions
Raw Material Availability
THE APRIL 2022 TRIENNIAL VALUATIONS
Staff
Works
Scheme
Scheme
Total
£’000
£’000
£’000
Discount Rate
2.75 %
2.75 %
2.75 %
Assets
48,846
59,226
108,072
Liabilities
(48,277 )
(76,378 ) (124,655 )
Surplus / (deficit)
569
(17,152 )
(16,583 )
Funding level- %
101 %
78 %
87 %
The valuations of the defined benefit schemes
are sensitive to a number of key factors: the
value of the assets, the discount rate used to
calculate the schemes’ liabilities (based on a
premium above gilt yields), the expected rate of
future inflation and the mortality assumptions
for members of the schemes. The liabilities of
the schemes decreased in the April 2022
valuation due to an increase in discount rates
from 2.5% in April 2019 to 2.75% in April 2022
and a reduction in life expectancies based on a
review of future mortality rates, partly offset by
an increase in future inflation expectations.
Following the triennial valuation the Company
agreed with the Scheme Trustees to pay annual
deficit recovery plan contributions to reduce
past service deficits of £1.4m per annum.
The Company will also continue to cover the
cost of the annual PPF levy.
KEY RISKS RELATING TO THE PENSION SCHEMES
The Company is exposed to a number of risks in
relation to the pension schemes, including
investment risks, demographic and mortality
risks and inflation risks for those benefits linked
to inflation. Risk management activity over the
years includes the following.
• The Schemes were closed to new members
in the year 2000 in order to contain the
Group’s exposure to rising pension costs
and to safeguard the accrued benefits to
existing members.
• Future annual increases in pensionable
pay were capped at a maximum of 2% from
1st April 2011.
• In April 2014 employee contributions were
increased.
• From 1 July 2017 the staff scheme rate of
pensionable accrual was reduced from
1/60th to 1/75th for each future year of
pensionable service.
• From 2017, for both the staff and the works
schemes, increases in pension once it is in
payment, for future benefits accrued, will be
in line with the annual increase in the
Consumer Price Index.
• In April 2018 a liability driven investment
strategy was adopted, aimed at reducing
exposure to the impact of future changes in
interest rates and inflation on scheme
liabilities, whilst maintaining a similar level
of overall return.
• In December 2021, the Trustee increased the
level of hedging in place as part of the
liability driven investment strategy from
80% of the value of scheme assets to 90%.
Whilst improving long term risk management,
the timing of this increase in hedging
percentage meant the overall scheme
valuation did not benefit from the subsequent
rise in interest rates to the extent it otherwise
would have done.
The group is aware of the High Court ruling in
the case of Virgin Media Ltd v NTL Trustees II
Limited and is waiting for the outcome of the
appeal, scheduled for later in 2024, and any
additional hearings, as well as confirmation
from the Government as to whether it will
issue new regulations in response to this issue.
RISK MANAGEMENT
The Board has overall responsibility for
determining its risk appetite and
ensuring that appropriate and robust
risk management systems are in place.
Risk identification and oversight,
including the design and deployment
of risk management and mitigation
activities, are overseen by the
Executive Committee.
The identification of risks is a continual
process and risk registers exist at the
Group, business unit and Group-
function levels. Scoring matrices are
used to assess risks, considering
likelihood of occurrence and impact
based upon a range of criteria including
safety, operations, profitability, strategy,
and reputation.
The Board reviews principal and
emerging risks on a quarterly basis
together with control arrangements and
mitigation plans. The Board also
considers the internal controls in place
across the Group and whether these
provide assurance over the Group’s risk
management framework. The Group’s
systems of internal control are also
considered by the Audit Committee
(see page 70).
PRINCIPAL RISKS
On the following pages we have
identified the risks we regard as most
significant to the Group together with
steps taken to mitigate these risks
where practicable. It is acknowledged
that it is not possible to have certainty
of the success of mitigating actions,
and that where mitigation actions are
not successful, the group's performance,
financial position and reputation could
be materially adversely affected.
In the year, following reviews
undertaken by the Executive Committee
and Board, changes to the principal risks
register included the recognition of
market growth risk.
EMERGING RISKS
Part of our approach to identifying risks
involves horizon scanning, taking into
consideration the Group’s position and
forward-looking strategy.
In the year, the Executive Committee
and Board considered the physical and
transitional risks associated with
climate change, particularly the risks
associated with extreme weather
events, changes to climate policy, our
transition to net-zero, and the potential
for impact on raw material availability.
Further information is set out on the
following pages.
Climate-related risks will remain under
regular review, with risk identification
and mitigation being supported by our
ESG Working Group.
For more information on the group's
approach to climate-related risks and
opportunities, please see pages 57 to 60.
STRATEGIC REPORT
RISK MANAGEMENT
40
41
NO CHANGE —
HEALTH AND SAFETY
SAFETY
OPERATIONAL
FINANCIAL
REPUTATIONAL
RISK DESCRIPTION AND IMPACT
As a manufacturing business the risk of accident or injury to people on our sites can
never be eliminated entirely. An accident or injury can cause significant distress and
impact on wellbeing as well as causing significant disruption and exposure to costs
and penalties. Damage can also be caused to the Group’s reputation.
MITIGATION
Providing a safe environment across our sites, free from the risk of injury, is of
utmost priority. The Executive Committee and Board consider Health and Safety
as a high-agenda item at every meeting, reviewing activities and improvements
as part of our safety strategy.
The Group adopts behaviour-based safety policies and procedures to manage its
operations and protect its employees and others who visit sites. It operates a safety
hierarchy under the oversight of our Central Safety Committee. The Group actively
reviews safety data generated in the business which has an increasing focus
on leading metrics such as near-miss reporting and preventative measures. In 2024
we launched a “10 Golden Rules” safety campaign to raise awareness and drive positive
safety culture.
PRINCIPAL RISKS
NO CHANGE —
PEOPLE
OPERATIONAL
FINANCIAL
STRATEGIC
RISK DESCRIPTION AND IMPACT
Our ability to deliver our strategy relies heavily on the knowledge, skills, experience,
and capability of our people. The nature of our products and services, combined with
the customers and markets we serve, means we need highly skilled engineers,
scientists, operators, and commercial people. Our ability to attract and retain this talent
is influenced by factors such as our culture and reputation, pay and benefits, working
environment, and location.
MITIGATION
Our people policies and practices, and remuneration arrangements, are designed
to attract and retain employees with the ability and experience to deliver the
Group’s strategy.
We offer a variety of development opportunities at all levels of the organisation.
We strive to ‘home grow’ our talent, investing in the next generation of James Cropper
custodians. We also look to develop our leadership capabilities through our James
Cropper Leadership Development Programme.
Our aim is to create desirable environments and a business our people are proud
to be part of, and to ensure our employees are rewarded and recognised for their
contributions. Leaders are encouraged to demonstrate positive behaviours to drive
trust, cooperation and involvement.
NO CHANGE —
FIRE
SAFETY
FINANCIAL
OPERATIONAL
RISK DESCRIPTION AND IMPACT
A major fire on site could cause significant damage to the infrastructure of the business
and significant business interruption.
MITIGATION
Risk is mitigated by robust fire detection systems including sprinkler systems in the
high-risk areas and a site-wide alarm system.
The Group has around 60 fire marshals deployed around the sites and regular
housekeeping audits are conducted in high-risk areas. Sites are also insured for fire
damage and business interruption. Regular fire drills take place, and alarm systems are
tested weekly.
INCREASE ▲
INCREASE ▲
DEFINED BENEFIT
PENSION SCHEME
FINANCIAL
STRATEGIC
RISK DESCRIPTION AND IMPACT
Deficits for the two defined benefit schemes do not reduce in line with the Trustee’s
strategy (due to factors including inflation, mortality assumptions and investment
strategies), or the Trustee determines that legislative changes, or a reduction in the
strength of the Group’s covenant in the light of performance, require increased
funding contributions.
MITIGATION
The Group maintains close dialogue with the Trustee through its Pensions Committee
(which was refreshed in FY24) including reporting structures which enable the
Committee to effectively hold the Trustee and investment managers to account in
connection with objectives, strategy and performance. The Committee also engages
pensions advisors where appropriate to ensure it is best placed to support the
Trustees in achieving optimal outcomes.
MARKET GROWTH
FINANCIAL
STRATEGIC
RISK DESCRIPTION AND IMPACT
The Group operates in diverse markets with differing levels of maturity, opportunity,
and competition. Following the review concluded in April 2023, the Board’s strategy is
to align the business with targeted markets which carry opportunities for significant
growth through innovation, commercial excellence, customer alignment and by
building brand strength. Failing to deliver this strategy, or over-reliance on certain
markets and/or customers, could result in performance expectations not being
achieved.
MITIGATION
The Board regularly reviews its strategy to ensure that it remains robust, relevant, and
aligned with opportunities and market growth expectations. Strategy development is
led by the Chief Executive Officer involving all levels of the organisation to ensure the
Group’s purpose and objectives remain robust and the Group is well placed to respond
to market challenges. Progress under strategic initiatives is kept under close review by
the Executive Committee and the Board to ensure priorities and objectives are met.
NO CHANGE —
SECURITY OF SUPPLY
FINANCIAL
OPERATIONAL
RISK DESCRIPTION AND IMPACT
Disruption to access of critical raw materials due to shortages, logistical challenges
or market forces leading to insufficient volumes being available to support production
operations or escalating costs could lead to loss of business and penalties.
MITIGATION
The Group has identified and continues to work closely with its strategic suppliers.
Dual sourcing of critical raw materials is applied in most cases and hedging
arrangements adopted where appropriate. The Paper & Packaging business continues
to drive the identification and use of waste fibre streams to replace virgin fibre in its goal
to achieve 50% use of recycled fibre as a proportion of overall fibre usage. Compliance to
Sourcing Standards is monitored and maintained throughout.
NO CHANGE —
IT SYSTEMS AND
NETWORK SECURITY
FINANCIAL
OPERATIONAL
REPUTATIONAL
RISK DESCRIPTION AND IMPACT
A targeted cyber-attack could result in significant loss, manipulation or destruction of
critical information and operational capability, severely disrupting business operations.
MITIGATION
The Group maintains a robust suite of IT security solutions which are reviewed
and tested both internally and by specialist third parties where appropriate.
We continuously review latest threats in conjunction with our protections and
governance arrangements to ensure our programme remains effective. We also
provide training programmes to employees to raise awareness.
STRATEGIC REPORT
RISK MANAGEMENT
42
43
NO CHANGE —
ENERGY PRICE
VOLATILITY
FINANCIAL
RISK DESCRIPTION AND IMPACT
Global uncertainty continues to drive energy prices. Although the main site can operate
on multiple fuel sources, energy costs are interconnected. As an energy intensive
business, prolonged high energy costs have a negative impact on business performance.
MITIGATION
The Group continues to pursue forward pricing opportunities and negotiate with
energy suppliers to secure best pricing and/or provide price certainty for a given period
of time. Longer term, continued investment in energy saving upgrades and in its
pioneering decarbonisation programme will facilitate the move to more consistent
green energy contracts. The Group also regularly reviews its sales prices and considers
the application of surcharges where energy costs rise significantly. The Group also
regularly reviews its sales prices and considers the application of surcharges where
energy costs rise significantly.
NO CHANGE —
LEGAL AND REGULATORY
COMPLIANCE
SAFETY
FINANCIAL
REPUTATIONAL
RISK DESCRIPTION AND IMPACT
The Group manufactures products which are designed to meet regulatory
requirements and employs over 600 people across various jurisdictions.
Failures in quality management systems could result in financial claims and
reputational damage. Failures to comply with ethical business practices and legal
requirements could result in penalties or other financial losses, access to
opportunities, and damage to our reputation.
MITIGATION
The Group employs highly skilled personnel and maintains robust quality management
systems which are designed to minimise the risk of defective products and services.
We also maintain close relationships with customers, are the subject of regular
compliance audits, and are well placed to respond in the event of an issue.
We also operate in accordance with a clear set of values which sits at the heart of
decision making. Policies and practices are in place to manage regulatory risks and we
engage compliance specialists to support where required. We also provide compliance
training to employees and advocate behaviours at all times which align with our Code
of Ethics.
EMERGING RISKS*
CLIMATE RELATED RISKS: PHYSICAL
NO CHANGE —
EXTREME WEATHER
EVENTS
SAFETY
OPERATIONAL
FINANCIAL
RISK DESCRIPTION AND IMPACT
Increased weather volatility presents an increased risk of both flooding and drought at
the main Burneside site. Flooding events can impact safety on site and adversely affect
operations. Prolonged drought could result in limited water being available for
abstraction and impact on business operations.
MITIGATION
The Group maintains insurance policies providing cover for business continuity and
flood-related losses which mitigate the financial impact associated with extreme
weather events.
In recent years, infrastructure at risk of flooding has been elevated on-site to
significantly reduce the risk associated with a flooding event. Arrangements also exist
to ensure the site can continue to operate safely.
Water supplies to the main site in Burneside are supplemented by private reservoirs
over which the Company has longstanding rights, which enable the control of available
water during periods of drought.
NO CHANGE —
CLIMATE POLICY
FINANCIAL
RISK DESCRIPTION AND IMPACT
As an energy-intensive manufacturing business, the costs associated with energy
supplies and carbon taxation can have a significant impact on the Group’s financial
performance.
MITIGATION
The Group closely monitors the costs associated with carbon credits to ensure that
favourable pricing is secured avoiding any impact on performance expectations
where practicable. The longer-term decarbonisation strategy will also reduce reliance
on fossil fuels.
CLIMATE RELATED RISKS: TRANSITIONAL
NO CHANGE —
NET ZERO EMISSIONS
STRATEGIC
FINANCIAL
OPERATIONAL
RISK DESCRIPTION AND IMPACT
The Group has an ambitious target of achieving net zero emissions for scope 1 and
Scope 2 by 2030. Achieving this goal is dependent on significant investment in
technologies and solutions to drive energy efficiency and facilitate the move to green
energy sources. Failure to achieve this goal would result in potentially higher costs
through carbon taxation, reputational damage and compromise our ability to compete
in key markets.
MITIGATION
The Group has already invested in upgrades to machines and a new boiler system to
drive efficiency improvements. The Group’s long term decarbonisation strategy is
to transition to green energy as part of its net zero ambition.
NO CHANGE —
RAW MATERIAL
AVAILABILITY
OPERATIONAL
FINANCIAL
RISK DESCRIPTION AND IMPACT
Changes in supplier operations and logistics to address climate change, including
forestry and mining practices, can impact on raw material availability or the costs
associated with processing and production, which has the potential to cause increased
costs or business interruption.
MITIGATION
The Group works closely with its strategic suppliers and maintains multiple sourcing
arrangements on key raw materials where practicable. Supply chains remain under
continuous review in conjunction with policy horizon scanning to understand the likely
impact of climate change.
STRATEGIC REPORT
RISK MANAGEMENT
* For more Information on the group's approach to climate-related risks and opportunities, please see the TCFD
Dislosures from page 57.
44
45
PROMOTING THE SUCCESS
OF OUR GROUP
S.172 STATEMENT
OUR APPROACH
The Board is ultimately responsible for
ensuring meaningful engagement with
our stakeholder groups.
We have a broad range of stakeholders
across the globe and recognise that
proper consideration of their interests
and views produces better outcomes
and enhances the sustainability of our
business. Through engagement we strive
to understand the interests, priorities,
and perspectives of our stakeholders
and to provide information about
developments across our businesses
and in our markets.
We adopt various initiatives which focus
on maintaining regular dialogue with
our stakeholders, some of which are
carried out directly by members of the
Board, whereas others are built into
day-to-day management across the
Group. The Group’s website is also
regularly updated and provides
additional information about the
Group. Investing in the time to build
relationships is a strong factor in
our success.
Board and Committee papers require
the identification of relevant
stakeholders to ensure that
consideration is given to their interests
as part of decision-making processes.
Sometimes the interests of our
stakeholders conflict, and in such
circumstances we seek to ensure that
those impacted are treated fairly.
On these pages, we identify certain
of our stakeholders, explain how
we engage as a business, and
describe the outcomes during FY24.
These disclosures demonstrate how we
have regard to the matters set out in
section 172 of the Companies Act 2006.
OUR EMPLOYEES
STAKEHOLDER INTERESTS
Our employees are our biggest asset
and fundamental to the success of the
Group. The health and wellbeing of our
employees is of the highest priority, and
we strive to ensure that our people have
opportunities to develop their skills and
experiences and feel properly valued
and rewarded for their contributions.
HOW WE ENGAGE
We use a variety of methods to ensure
that our people remain engaged
including twice-yearly town hall
meetings, the issue of regular
newsletters and briefings, global emails,
and communications via our intranet.
We also run an annual employee survey,
which can be completed anonymously,
where outcomes and actions are
communicated across the Group.
Members of the Executive Committee
and other senior leaders are encouraged
to be visible and approachable on site
and regularly enjoy lunches with
employees in the canteen. The Chair
and CEO regularly walk around site to
engage with our people and understand
issues, and small groups of employees
are invited to attend Chair’s lunches.
We also maintain a constructive
relationship with representatives of
UNITE, our Trade Union, to ensure that
any significant decisions impacting our
people are made with collective support
where practicable.
OUTCOMES IN FY24
FY24 was a year of significant impact for
our people due to the change in Group
strategy announced in April 2023 which
focused on restructuring the Paper &
Packaging business. This resulted in
redundancies and changes to
employment arrangements, where
decisions were made following
significant trade union and employee
consultation. The interests of our people
were front and centre during these
processes, and we are confident the
business is better placed to deliver on
the Group’s strategic objectives into the
long-term as a result.
OUR INVESTORS
STAKEHOLDER INTERESTS
Our shareholders trust us to manage
their investments and execute the
Board’s strategy. In so doing, we must act
ethically, in a sustainable manner, and in
accordance with good governance.
Our investors expect us to remain open
about the Group’s current and expected
performance so that they can properly
assess risks and opportunities when
making investment decisions.
HOW WE ENGAGE
We maintain a regular calendar of
announcements and events for investors
and host occasional investor visits to our
Burneside site. The Executive Directors
frequently communicate with
institutional investors to discuss
strategy and broader markets. The Chair,
Non-Executives and Company Secretary
also engage with investors from time to
time on governance issues and other
matters concerning the Board.
Shareholders also have the opportunity
to meet with Directors at our AGM which
is held in Burneside.
OUTCOMES IN FY24
This was a challenging year for the
business, with reduced demand and
delays to expected growth resulting in a
significant downward revision to the
Board’s full year performance
expectations which was communicated
to the market in January 2024.
During this period, the CEO and CFO
engaged closely with key investors to
understand their issues and concerns. In
April 2024, following actions taken by
the Executive to mitigate the impact of
trading challenges, the Board was able to
communicate expectations of full year
results slightly improved upon those
reported in January.
Following the AGM in September 2023,
shareholders were invited for a tour of
the site and to meet Directors and
employees. In the year, the Chair also
met with significant shareholders to
discuss the business and Board’s
strategy. Feedback from and
engagement with shareholders is
welcomed throughout the year and is
considered as a standing item at every
Board meeting.
STRATEGIC REPORT
OUR CUSTOMERS AND
SUPPLIERS
STAKEHOLDER INTERESTS
Our business model depends on strong
relationships with our customers and
suppliers, based upon trust, open
communication, and delivering on
commitments. As the Group has
developed, we maintain relationships
with increasingly international and
diverse customers and suppliers who
each expect us to act fairly,
transparently, and ethically.
HOW WE ENGAGE
Staying in touch with our customers
and suppliers has never been more
important. Our management teams
maintain regular and open dialogue
with those we do business with which
helps build long lasting and trusted
relationships. Updates on discussions
with customers and opportunities to
collaborate are considered by the Board
regularly, together with any dialogue on
key issues and challenges from time to
time. Regular engagement with our
customers and suppliers helps us
understand their perspectives and
manage risks and opportunities when
they arise.
OUTCOMES IN FY24
We are in constant dialogue with our
customers to understand their
developing needs. On the back of the
recent global energy and inflationary
challenges, regular consultation with
customers and suppliers has been
maintained which has enabled us to
maintain better control of input costs
and selling prices. Throughout late
2023 and 2024, we also maintained
regular communication with
our customers experiencing
reduced demand which enabled the
Group to appropriately respond.
Through close engagement and strong
relationships, we have been able to
support our customers and partners
in the development of unique and
innovative product ranges which is
a key component in the Group’s
future successes.
OUR COMMUNITY
STAKEHOLDER INTERESTS
We are the largest business in the
Burneside area with a significant
number of employees living locally.
We also have businesses and employees
in Crewe and Launceston (UK) and
Schenectady (USA). We take an active
interest in supporting our communities,
schools, clubs, and charities.
HOW WE ENGAGE
The impact of our operations on
our communities is an important
consideration in decision making
processes. We have a Community
Support Committee, which includes
members of the Board and Executive
Committee, which regularly reviews
opportunities to support schools, clubs,
charities, and other organisations,
particularly where initiatives align
with our purpose and values. We also
enable our employees to offer support
by providing them with two days’ paid
leave annually for charitable or
community related work.
Our vision for business is one that
delivers growth whilst also serving
society and is strongly aligned with
the UN Sustainable Development Goals.
For more information on the Group’s
approach to ESG, please see pages 48
to 56.
OUTCOMES IN FY24
In the year, donations of over £10,000
were made to local causes. We also
continued with our Free Paper for
Schools initiative, which in the year
donated four tonnes worth of paper.
The total donated over the last
five years by the Community Support
Committee is £56,700.
We have three phases of solar panels
installed on roof spaces across the
Burneside site which are owned by
Burneside Community Energy Ltd
(a community benefit society).
The Group pays for the electricity
generated under power purchase
agreements, and the proceeds used by
Burneside Community Energy to
support local causes ranging from
providing equipment to sports clubs to
keeping the River Kent clean.
OUR AGM
At our AGM in September 2023, all
resolutions were passed by shareholders
with the requisite majority.
Feedback received in connection with
the resolutions included:
1. Concerns that Mark Cropper
continued to serve as a member of
the Remuneration Committee despite
not being independent. In FY24
Mark Cropper stood down as a
member of the Remuneration
Committee. Following the AGM the
Remuneration Committee will
comprise solely of independent
Non-Executive Directors.
For more information on board
independence considerations, please
see the Corporate Governance Report
on page 66.
2. Concerns that Jim Sharp served as
Chair of the Audit Committee and as a
member of the Remuneration
Committee despite concerns being
flagged in connection with his
independence. As announced on 22
July 2024 Jim Sharp will stand down
from the Board (and as Chair of the
Audit Committee and member of the
Remuneration Committee) at the AGM
taking place in September 2024. In
succession to Jim Sharp, Jon Yeung
will join the Board following the AGM
as an independent Non-Executive
Director and as Chair of the Audit
Committee.
3. Concerns in relation to a severance
payment made to the outgoing CEO in
FY23. These concerns were noted by
the Remuneration Committee and the
Board. Please see the Remuneration
Committee Report from page 73 for
more information.
The Board encourages and welcomes
feedback from shareholders and all
stakeholders and looks forward to
meeting shareholders at the AGM which
will be taking place on 4 September
2024.
PROMOTING THE SUCCESS OF OUR GROUP
46
47
48
49
SUSTAINABLE MANUFACTURING
RESPONSIBLE BUSINESS PRACTICES
PEOPLE AND SOCIETY
DECARBONISATION AND
ENERGY
To have a robust net zero aligned
strategy and achieve net zero by
2050 across our entire supply
chain.
MATERIALS WITH PURPOSE
To create sustainable material
solutions aligned to societal needs
delivered in a fair, healthy and
inclusive way.
EMPLOYEE WELL-BEING
We support our people's physical,
mental and emotional wellbeing;
balancing their work and personal
responsibilities to help them to
work safely and effectively.
WATER
To reduce our water footprint
by developing and embracing
innovative solutions to close our
water loop; minimising fresh water
abstraction, reusing process water
and recycling our effluent water
back into the process.
BUSINESS ETHICS AND RISK
To operate responsibly, steering
governance, best practice and in
line with our core values
throughout our operations.
ENHANCING LIVELIHOODS
We are committed to providing
meaningful work, generating a
positive organisational culture and
working environment which
promotes diversity, inclusivity,
personal development and respect.
WASTE AND RESOURCE
MANAGEMENT
To commit to valuing waste across
our operations and employ
innovative solutions to minimise
and repurpose waste.
SUPPLY CHAIN
To ensure our suppliers operate to
the same ethical and sustainable
standards that the Company
adheres to.
LOCAL COMMUNITY
To be a force for good in society,
and particularly by making a
positive contribution in our local
community, supporting social
cohesion, economic prosperity and
inclusive growth.
ESG REPORT
OUR SUSTAINABLE
PURPOSE
Sustainability is integral to the way we
add value for our stakeholders. Our
materials and technologies are behind
some of the world’s most successful
brands, and we recognise the
importance of delivering a positive
impact for our planet and society.
Our purpose – Pioneering Materials to
Safeguard our future – underpins our
long-term sustainable vision. Our rich
heritage is rooted in natural renewable
materials, and our approach has evolved
over decades as we have challenged
ourselves to meet the needs of tomorrow.
Today, our strategic goal for sustainable
growth takes on many more forms.
Whether that is from upcycling or
recycling materials, lightweighting of
components, decarbonisation, or
innovative solutions in the green energy
sector, we continue to adapt our
business to support our stakeholders
and reduce our impact on the
environment. We work closely with our
customers to develop differentiated
products and solutions, that can make a
material difference in the long-term.
EXTERNAL RATINGS
We understand the value to our
stakeholders of external ratings and
regularly support our customers by
providing feedback on our operations,
commitments, and progress in
sustainability initiatives. We also use
feedback from ratings agencies to
enhance our approach and ensure that
we align with best practice. In May 2023
we were proud to receive a gold medal
rating by EcoVadis for our moulded fibre
business, placing us in the top 5% of
rated businesses globally.
ESG WORKING GROUP
In March 2024, we refreshed our
approach to sustainability by forming an
ESG Working Group to replace our ESG
Sub-Committee and build upon the good
progress made across the Group.
The Working Group is chaired by the
Company Secretary and comprises
representatives from across the Group’s
businesses at various levels and
locations with relevant knowledge and a
passion for sustainability.
The Working Group meets quarterly and
operates in accordance with its Charter
which is reviewed annually.
The Working Group monitors our ESG
obligations and developing trends,
oversees policies and practices, and
progresses key initiatives. It also
collates and reviews data, recommends
targets, and assesses our performance.
The Working Group supports the
Executive Committee in the
development and recommendation of
ESG strategies, produces reports for the
Board, and reviews ESG-related
disclosures.
BOARD
Accountable to stakeholders
Establishes purpose and values
Determines strategic objectives
Delegates management to Executive
ESG WORKING GROUP
Monitors trends/requirements
Recommends ESG strategies
Collates data and develops metrics/KPIs
Supports Executive in delivering objectives
EXECUTIVE COMMITTEE
Accountable to Board
Recommends and implements strategy
Responsible for managing businesses
OUR PRIORITY AREAS
Our approach to sustainability aligns with the United Nations Sustainable Development Goals across three pillars divided into nine
priority areas. In FY24 the Working Group commenced a review into each of these areas with a view to understanding stakeholder
interests and the risks and opportunities presented by each. Into FY25, this review will continue to identify goals and actions which
support our purpose and stakeholder interests.
As a business we are committed to
pro-actively monitoring and managing
the impact of our operations. This
includes improving the data we collect
to deepen our understanding, enhance
our communications with stakeholders,
and to enable us to manage risks and
opportunities.
The Group already embeds sustainable
business principles across the
organisation in operations including
waste management, water use, energy
efficiency and renewable energy, and
sustainable sourcing of materials and
services.
Despite external challenges in recent
years, we have remained focused on our
sustainability objectives, particularly
our approach to decarbonisation. We
are confident in our evolving approach,
and that we will continue to see
incremental improvements year-on-
year.
SUSTAINABLE
MANUFACTURING: ENERGY
AND DECARBONISATION
TARGET: TO HAVE A ROBUST NET
ZERO STRATEGY AND TO ACHIEVE
NET ZERO ACROSS OUR ENTIRE
SUPPLY CHAIN AND OPERATIONS
BY 2050.
Our commitment to net zero has driven
a programme to understand and
enhance how we consume and manage
energy. A crucial element of this is a
significant reduction in our primary
energy usage and a move to renewable
energy sources, and we have made good
progress in tightening up process
controls and made efficiency
improvements resulting in savings on
energy consumption.
In FY24, we consumed 151,204 MWh of
energy across our Global operations.
This compares to 189,653 MWh in FY23
and 203,230 MWh in FY22, as we
continue to benefit from these
incremental improvements and
operational efficiencies.
100% of the Group’s UK sites are now
supplied with National Grid electricity
that is sourced from certified green
sources.
Delivery against our decarbonisation
ambition, through technology
transformation and move from
fossil energy sources, will enable
us to demonstrate quantifiable
improvements in our carbon footprint
and align with the ambitions of our
customers and consumers.
CARBON FOOTPRINT
In FY24, our gross Scope 1 and
Scope 2 emissions were 27,764.7 tCO2e.
This compares to 34,744.0 tCO2e in
FY23, and a 32% reduction against
our baseline performance in FY22
(being 41,648.4 tCO2e).
In the year, our Centre of Innovation
team were able to progress our
decarbonisation programme, which
is being supported through grant
funding. The project is advancing
towards the construction of a new
Information on each of these key areas and some of the strategic initiatives being progressed is set out on the following pages.
SUSTAINABLE MANUFACTURING
04
01
STRATEGIC REPORT
ESG REPORT
01
03
07
09
06
08
05
02
50
51
Low Carbon Energy Centre, which will
ultimately enable the electrification of
the paper manufacturing facility. The
first phase of the Energy Centre, which
will enable electrification of one third
of the paper business, is expected to be
complete in 2026.
In September 2023, we also commissioned
a state-of-the-art high efficiency steam
boiler, which has significantly improved
our control of energy for production
across the site. In January 2024, as part
of our accelerated growth strategy
announced in April 2023, we reduced the
number of paper machines in operation
from four to three, with two machines
in continuous production at any time,
to drive production efficiencies.
We have also continued to install
meters across sites to drive better
data (including half-hourly metering
on paper machines) and enhance our
ability to identify savings.
STREAMLINED ENERGY AND
CARBON REPORT
Our Scope 1 and Scope 2 emissions
are detailed in the tables below
(location-based data) and opposite
(market-based data).
In this year's annual report we have
not included Scope 3 data owing to
an ongoing review of our methodology
for collecting and analysing data. We
expect this review to be completed
during 2024 and to publish this data
at the earliest opportunity.
We continue to collaborate with supply
chain partners to enhance our data
collection and drive improvements
where we can.
ENERGY USE
The underlying energy data used
to calculate carbon emissions includes
electricity, natural gas and other fuels
purchased for use on-site and for transport.
Energy used in the year across our
Global locations totalled 151,204 MWh,
which compares to 189,653 MWh in
the previous year. This was driven
by process efficiencies but also impacted
by a reduction in manufacturing
operations in the second half of the
financial year owing to customer
demand in that period.
RENEWABLE ENERGY
1.2 MW of Solar PV is currently installed
across six different locations on or
around our Burneside site. Most of these
installations are subject to power
purchase agreements with Burneside
Community Energy Ltd, a community
benefit society, which uses the funds it
generates to support local initiatives.
Over the year, total solar generation was
851,304 kWh, compared to 793,054 kWh
in FY23 and 655,633 in FY22 (an increase
of 30% over the three years).
We also saw an increase in the electricity
generated by the hydroelectric plant
adjacent to the site located on the River
Kent. Electricity from this plant is
supplied under a power purchase
agreement with the Ellergreen Group. In
the year, total generation was 301,309
kWh, compared to 210,627 kWh in FY23
and 206,194 kWh in FY22 (an increase of
46% over the three years).
GRID ELECTRICITY
Globally we purchased 11,831 MWh of
electricity from the Grid (FY23: 10,688
MWh), of which 93% was on a Carbon
Trust Certified Green Tariff (categorised
as A+) sourced strictly from Wind, solar
and Hydro sources. This was a 3%
increase on the previous year (FY22:
6,850 MWh with 90% certified green).
These certified tariffs conform to the
Greenhouse Gas Protocol and are
categorised as generating zero carbon
emissions under the market-based
reporting method.
For reporting purposes, Scope 2
emissions are reported using location
based (grid average) and also using
market-based (REGO backed) emissions.
1. See methodology opposite.
LOCATION-BASED1
UK OPERATIONS
US OPERATIONS1
GLOBAL OPERATIONS
2021/22
(BASELINE)
2022/23
2023/24
2021/22
(BASELINE)
2022/23
2023/24
2021/22
(BASELINE)
2022/23
2023/24
SCOPE 1
(DIRECT
EMISSIONS)
tCO2e
40,123.4
33,036.6
25,169.4
210.7
246.4
229.2
40,334.1
33,283.0
25,398.5
SCOPE 2
(INDIRECT
EMISSIONS)
tCO2e
1,235.4
1,318.1
2,278.8
78.9
79.2
87.4
1,314.3
1,397.3
2,366.2
TOTAL
tCO2e
41,358.8
34,354.7
27,448.2
289.6
325.6
316.6
41,648.4
34,680.3
27,764.7
GLOBAL
REVENUE
£'000
104,922
129,664
102,968
INTENSITY
METRIC
tCO2e /
£100K
REVENUE
39.7
26.7
27.0
REDUCTION
AGAINST
BASELINE
%
-32.5
-32.0
MARKET-BASED2
UK OPERATIONS
US OPERATIONS2
GLOBAL OPERATIONS
2021/22
(BASELINE)
2022/23
2023/24
2021/22
(BASELINE)
2022/23
2023/24
2021/22
(BASELINE)
2022/23
2023/24
SCOPE 1
(DIRECT
EMISSIONS)
tCO2e
40,123.4
33,036.6
25,169.4
210.7
246.4
229.2
40,334.1
33,283.0
25,398.5
SCOPE 2
(INDIRECT
EMISSIONS)
tCO2e
25.4
42.8
65.1
78.9
79.2
87.4
104.3
122.0
152.5
TOTAL
tCO2e
40,148.8
33,079.4
25,234.5
289.6
325.6
316.6
40,438.4
33,405.0
25,551.1
SUSTAINABLE
MANUFACTURING: WATER
TARGET: TO REDUCE OUR WATER
FOOTPRINT BY DEVELOPING AND
EMBRACING INNOVATIVE SOLUTIONS
TO CLOSE OUR WATER LOOP;
MINIMISING FRESHWATER
ABSTRACTION, REUSING PROCESS
WATER AND RECYCLING WATER
BACK INTO THE PROCESS.
Located beneath the Lake District fells,
our stewardship obligations towards
nature are taken very seriously. Our
environment, and the watercourses
which are fundamental to our operations,
have been shaped by land management
over centuries to support industry or
farming practices. Such management has
exacerbated the effects of flooding in
recent years, with the area also suffering
a severe decline in biodiversity.
The weir removal at Bowston, a project
proposed by South Cumbria Rivers Trust
in agreement with James Cropper who
owned the redundant structure, was the
largest river barrier removal in the UK in
2022. The project returned this section
of the River Kent – which is our primary
source of water for our operations and
a site of special scientific interest – to a
more natural condition. The removal
brings an estimated biodiversity gain
of 44%, benefitting wildlife including
aquatic invertebrates, fish, birds, and
plants. Flood risk also decreased for
residents.
In FY24, our Centre of Innovation team
commenced a review of our operations to
identify opportunities for recycling
process water to reduce our levels of
consumption and freshwater abstraction.
In FY25, that review will continue as we
plan to progress technology towards trials.
02
STRATEGIC REPORT
ESG REPORT
2. See methodology below.
SUSTAINABLE
MANUFACTURING:
WASTE AND RESOURCE
MANAGEMENT
TARGET: TO COMMIT TO VALUING
WASTE ACROSS OUR OPERATIONS
AND EMPLOY INNOVATIVE
SOLUTIONS TO MINIMISE
AND REPURPOSE WASTE.
We are an environmentally conscious
business and recognise the importance
of both minimising the waste we produce
and repurposing the waste generated by
consumers and other industries.
We are one of more than 500 signatories
to the Ellen Macarthur Foundation Global
Commitment which targets a circular
economy for plastics and an increase
in recycled content in packaging.
We hold industry-leading capabilities in
the incorporation of recycled fibres in the
production of high-quality paper
products, such as our CupCycling® facility
which currently processes around 150
million cups per year into luxury papers
and packaging and has capacity to
process up to 700 million cups per year.
In addition to our continuous focus on
efficiency and waste reduction, in 2024
our operations in the USA have been able
to reduce volumes of waste through
water evaporation which helps to
significantly reduce the requirement
for transportation.
03
METHODOLOGY
• GHG Protocol.
Greenhouse gas emissions are reported
in accordance with the Greenhouse Gas
Protocol Carbon Reporting and
Accounting Standards.
• Location-based Method.
The first table reports emissions
according to the GHG Protocol’s
“location-based” reporting method,
using grid-average emission factor data
for all electricity generation sources.
• Market-based Method.
The second table reports emissions
according to the GHG Protocol’s
“market-based” reporting method,
which accounts for renewable energy
purchases which are used to support
our operations.
The Location-Based and Market Based
tables are provided to deliver an insight
into the emission savings generated
through our Green Tariff Electricity
supply contracts.
• Inventory Guidance.
US EPA was used to identify Scope 1 and
Scope 2 emissions for our operations in
Schenectady, USA.
Group figures are compared to the
selected base year to provide an
indication of progress over time.
52
53
RESPONSIBLE BUSINESS
PRACTICES: SUPPLY CHAIN
TARGET: TO ENSURE OUR SUPPLIERS
OPERATE TO THE SAME ETHICAL AND
SUSTAINABLE STANDARDS THAT THE
COMPANY ADHERES TO.
We maintain close relationships with our
suppliers and strive to ensure that those
we do businesses with operate ethically
and sustainably.
Our commitment to sustainable sourcing
is enabled by supply chain certification
and transparency and we are regularly
subjected to third party audits to verify
the effectiveness of our approach.
100% of the fresh fibre we source is from
responsibly managed forests certified to
FSC® or PEFC® standards. We also employ
fibre traceability procedures to provide
assurance over the legality of wood,
biodiversity, and sustainable land
practices, and we are developing our
approach in readiness for the EU’s
Deforestation Regulations expected
to take effect in late 2024.
Our supplier due diligence processes
are subject to regular review and cover
approaches taken to including how we
engage with suppliers and distributors
in relation to tackling slavery and human
trafficking. Key suppliers are required
to confirm their adherence to our
Supplier Code of Conduct, which sets
out ethical standards we expect all
our suppliers to meet.
The Company will not undertake
business with any third parties including
suppliers where concerns arise and will
accordingly report such circumstances to
the relevant authority.
RESPONSIBLE BUSINESS
PRACTICES: BUSINESS
ETHICS AND RISK
TARGET: TO OPERATE RESPONSIBLY,
STEERING GOVERNANCE, BEST
PRACTICE AND IN LINE WITH
OUR CORE VALUES THROUGHOUT
OUR OPERATIONS.
James Cropper is committed to ethical
and responsible business practices.
The Group manages a well-developed
framework of policies which set
standards and encourage positive
behaviours. Our Code of Ethics builds
upon this by providing clear and
straightforward guidance in relation to
the values, behaviours, and standards
which are core to James Cropper. A copy
of the Code is provided to all employees
when joining the business. The Code has
been well received and we will continue
to develop and improve it as a useful
guide which helps to promote a positive
workplace culture.
In FY24 we built upon our ethical
framework by launching an independent
whistleblowing service in conjunction
with SafeCall. The service is advertised
across our sites and is available to all
employees who can report any concerns
in the workplace totally anonymously.
During the year, we also recruited into
the newly created role of General Counsel
and Company Secretary as part of our
commitment to robust governance, and
commenced a review of our risk-
management practices to ensure that
these remain effective for our
organisation. For more information on
how we manage risk, please see pages 39
to 43.
RESPONSIBLE BUSINESS
PRACTICES: MATERIALS
WITH PURPOSE
TARGET: TO CREATE SUSTAINABLE
MATERIAL SOLUTIONS ALIGNED TO
SOCIETAL NEEDS DELIVERED IN A
FAIR, HEALTHY AND INCLUSIVE WAY.
We are pioneers in developing materials
with the future in mind. Through
innovation, our smart solutions work
to reduce our impact, and that of our
customers, on the environment.
Our Advanced Materials business
develops and supplies clean energy
solutions including complex gas diffusion
layer substrates which are critical in the
manufacture of hydrogen fuel cells, and
proprietary coatings which enhance the
efficiency, and reduce the costs, of
producing green hydrogen. We also
produce high-strength lightweight
materials for wind turbines used in
the production of clean electricity.
We recognise that increasing levels of
recycling and promoting a circular
economy brings environmental benefits
in reducing the demand for virgin raw
materials. Paper fibres can be recycled
up to six times, and our “Sometimes it is
Black and White” campaign launched in
2024 demonstrates our ability to produce
paper and packaging from recycled
materials that does not compromise
on luxury quality.
In 2024, we extracted 498 tonnes of
plastic film from cup waste for recycling.
04
05
06
RESPONSIBLE
BUSINESS PRACTICES
PEOPLE
AND SOCIETY
PEOPLE AND SOCIETY:
EMPLOYEE WELL-BEING
TARGET: TO SUPPORT OUR
PEOPLE’S PHYSICAL, MENTAL
AND EMOTIONAL WELLBEING;
ENABLING A BALANCE OF
WORK AND PERSONAL
RESPONSIBILITIES AND
TO ENSURE WE REMAIN SAFE
AND EFFECTIVE AT WORK.
We are committed to supporting the
mental health of our people and have a
team of trained mental health first aiders.
We provide occupational health and
employee assistance services to all of
our employees and in FY24 launched
an app to make employee assistance
more accessible.
To promote employee wellbeing and
community support, we maintain an
employee volunteering policy that allows
every employee two paid days off a year
to do volunteer work. Our on-site gym in
Burneside contains a wide range of fitness
equipment and remains a popular way
for our people to exercise.
We also offer occupational health and
employee assistance programmes to all
employees, and in the year rolled out an
app with our new service provider to
enable easy access.
PEOPLE AND SOCIETY
ENHANCING LIVELIHOODS
TARGET: TO PROVIDING MEANINGFUL
WORK AND A POSITIVE
ORGANISATIONAL CULTURE AND
WORKING ENVIRONMENT WHICH
PROMOTES DIVERSITY, INCLUSIVITY,
PERSONAL DEVELOPMENT AND RESPECT.
We strive to be an employer of choice,
providing quality work and personal
development opportunities for all
our people.
We are also committed to fair pay and,
notwithstanding challenges seen across
our business in the second half of FY24,
we were able to provide salary increase of
4.6% to our employees in 2024 which built
upon the 7.6% increase made in 2023 to
support our people through the recent
cost-of-living crisis.
Equality and diversity are essential to
ensuring we run the business ethically for
our valued employees, and our Gender Pay
Report ensures transparency of data and
our approach to improve equality for
current and future employees. In the
year we also made various changes to
our flexible and other people policies
to ensure that these promote a positive
workplace culture. For more information
on our approach to employment, please
see our People report on page 55.
PEOPLE AND SOCIETY:
LOCAL COMMUNITY
TARGET: TO BE A FORCE FOR GOOD
IN SOCIETY, AND THIS STARTS BY
MAKING A POSITIVE CONTRIBUTION
IN OUR LOCAL COMMUNITY,
SUPPORTING SOCIAL COHESION,
ECONOMIC PROSPERITY AND
INCLUSIVE GROWTH.
In addition to offering employees with
the ability to take paid leave for volunteer
work, we continue to provide paper to
local schools, community groups and
creative arts clubs as well as providing
charitable donations to good causes. This
year we have sponsored equipment for a
new design and technology laboratory at
a local school, awarded over £10,000 in
charitable donations to local charitable
groups, and invested in youth sport by
sponsoring junior football teams and
cricket clubs.
Our arrangements with Burneside
Community Energy Ltd (a community
benefit society which supplies solar
electricity to the business under power
purchase agreements) also ensure that a
portion of our spending on electricity is
directed to local community initiatives.
07
08
09
STRATEGIC REPORT
ESG REPORT
54
55
OUR PEOPLE
We recognise our colleagues are our
biggest asset. From modernising our
people practices to improving our
approach to talent management and
development, we could not be prouder
of the progress we have made over the
last 12 months. We have increased our
wellbeing activities, taken steps to see
things from our colleagues’ perspectives,
and focused on initiatives that will
ensure our colleagues feel supported
by the business.
All of our activity has been driven on
the back of our people strategy which
reflects our company growth plan. Our
strategy contained five key pillars, which
have shaped our thinking, interventions
and where we have placed our focus over
the last 12 months. We have laid the
groundwork for even further progress
in the year ahead.
HEALTH AND WELLBEING
The health and wellbeing of our
employees continues to be fundamental
to everything we do at James Cropper.
We continue to provide occupational
health and employee assistance
programme (EAP) services to all our
employees. This year, we launched an
employee assistance app with our new
EAP provider, to allow our colleagues to
have help and advice at their fingertips.
We are committed to improving
employee wellbeing and engagement
with a healthier and more inclusive
culture and aim to continue building on
the foundations from this year to ensure
improvement in the health, and
wellbeing of all our employees.
ETHICS AND BEHAVIOURS
Following the successful launch of our
Code of Ethics and Behaviours, this year
saw the launch of a new confidential
ethics hotline in conjunction with
independent providers Safecall.
Employees can now raise a concern
anonymously by email, on the telephone,
and online to the Ethics Helpline service.
EMPLOYEE ENGAGEMENT
Our Company-wide employee survey
provides every employee the
opportunity to provide anonymous
feedback on what works well and where
opportunities exist to improve our
employee experience. Run annually,
the results are analysed to creating
and delivering action plans as part of
our commitment to continuously
improve how we operate.
We regularly consult with our
employees and trade
union representatives on a
wide variety of topics, with views and
interests being considered in our
decision-making processes. We also
continue to offer a range of
communication channels, both formal
and informal, allowing us to ensure
that our employees remain informed
of business updates and two-way
discussions take place. We continue to
host face to face all employee briefings
twice a year allow our employees to
‘stay in touch’ with our leadership
team and hear about business updates.
For more information about employee
engagement please see our s.172
statement on page 44).
LEARNING AND
DEVELOPMENT
Attracting, retaining, and upskilling
talent within our business and inspiring
people to consider careers
in science, technology, engineering,
and manufacturing, remains a key
area of focus.
We currently support 17 apprenticeships
across Engineering, Leadership,
Administration and Procurement, and
Project Management and plan to grow this
number during 2024. To enable
this, we have partnered with Lifetime
Training, the UK’s leading apprenticeship
provider to offer programmes across
leadership, digital, professional, and
business services specialisms. This will
provide employees with the opportunity
to develop professionally, on the job and to
gain industry-recognised qualifications.
We continue to invest in building
relationships with local schools and
colleges, attending career fairs as well
as offering work experience placements.
Alongside this over the last 12 months
we have invested over £300k in our
workforce development and training,
with key learning and development
taking place in people management
skills, sales and business development,
technical training, and compliance.
DIVERSITY, EQUITY
& INCLUSION
We are striving to build a more diverse
workforce in which we empower
employees to bring their whole self to
work, unlocking potential to draw on a
wealth of skills, experiences, and talent
to improve our collaboration in teams,
driving continuous innovation and
successfully delivering our strategy
and Company priorities.
This year we have made a number
of changes to our people policies
ensuring James Cropper is a supportive
and modern employer; refreshing our
flexible working policy and carer leave
policy, making improvements to our
career break policy and introducing
a menopause guidance and toolkit for
both line leaders and employee, ensures
that we are able to attract and retain
a diverse workforce.
We have also published our fifth annual
gender pay gap report in line with UK
regulations. For 2023, our mean gender
pay gap for our UK workforce was
-7.64% and our median gender pay
gap was -8.27%. This compares to the
UK median gender pay gap of 14.3%.
SUPPORTING
LOCAL COMMUNITIES
Working to support the communities
where we operate, including charitable
sponsorships, donations, employee
fundraising and volunteering is a
fundamental part of our Company
purpose. Our people played a key role
contributing their time and energy
to fundraising and volunteering, as
they do year after year. This is achieved
through our volunteering policy, where
all employees can take up to two days
paid leave a year to volunteer in their
local community.
OUR PEOPLE
56
57
SAFETY
KEEPING OUR PEOPLE SAFE
The safety, health, and wellbeing of
our employees is an enduring priority
which sits at the very core of our
purpose and values.
We operate an integrated safety model
which facilitates active participation by
all our people. This includes focusing on
team member engagement and building
awareness of risks and responsibilities.
We have also developed a thorough
programme of regular Workplace
Standards Inspections, which promote
visibility and awareness and enable
engagement on safety issues or risks.
All members of the Executive
Committee and members of senior
management actively support
inspections monthly with feedback
being used to drive enhancements.
Our goal is to be a zero lost-time
incidents company. Our safety
objectives are:
• Maintaining a safe, efficient
and professional workplace
• Improving standards
• Positive engagement via
direct involvement
• Sharing best practice
In 2024, we formed a new Central
Safety Committee comprising senior
leaders from across the Group together
with trade union representatives.
We were also pleased to appoint a
new Head of Health and Safety for
the Group, reporting directly to the
CEO, as part of our commitment to
continuous improvement as one
James Cropper business.
Our Central Safety Committee
has oversight of safety strategy,
the implementation of initiatives,
and monitoring our performance.
Our safety programmes focus on
continuous improvement in our
workplace, raising awareness,
and enhancing behavioural safety.
Looking ahead, we have reaffirmed
our position as being committed to
safety through the launch of our
“10 Golden Safety Rules” campaign
which we relentlessly promote as
part of our efforts to maintain a
safe working environment.
A
TCFD DISCLOSURES
INTRODUCTION:
OUR APPROACH TO CLIMATE CHANGE
In this section we describe our approach to the identification
and management of climate-related risks and opportunities,
consistent with the recommendations of the Task Force on
Climate-Related Financial Disclosures. This is in addition to
the disclosures in our Risk Report on pages 39 to 43 and our
ESG Report on pages 48 to 56.
The Board is accountable for the long-term success of the
Group and has ultimate responsibility for the management
of climate-related risks and opportunities. It recognises the
significance of climate change and sustainability to our various
stakeholders including shareholders, colleagues, customers,
and communities, and this remains central to decision
making processes.
In the year, the Group made good progress in the continuous
development of its risk management framework to incorporate
climate-related considerations. We also launched our ESG
Working Group, which builds upon the work previously carried
out by our ESG Committee, bringing together a broad range
of knowledgeable and passionate individuals from across the
Group. The Group’s purpose - Pioneering Materials to
Safeguard Our Future - remains at the heart of James Cropper
and underlines its commitment to sustainable and long-term
value generation.
In this report we have been able to comply with 9 out of the
11 recommended disclosures, with further work required in
connection with scenario analysis and targets associated with
the management of climate-related risks and opportunities.
More information on our approach is set out below:
TCFD RECOMMENDATION
HOW WE APPLY THE RECOMMENDATION
Describe the Board’s
oversight of climate- related
risks and opportunities.
The Board is ultimately responsible for the Group’s strategy, risk appetite and risk
management, which includes climate-related risks and opportunities. Principal and
emerging risks are reviewed quarterly with reports prepared by the Company Secretary
following regular reviews which take place within the businesses and at the Executive level.
Considerations include a review of significant physical and transitional risks relating to
climate change and the environment.
Going forwards, the recently established ESG Working Group (see page 48 for more
information) will facilitate the assessment of climate-related risks and opportunities
across all areas of the business, producing reports and information for the Executive
Committee and Board to support quarterly risk reviews, inform discussions, and aid
decision-making.
The Audit Committee is responsible for monitoring the Group’s compliance with climate
change reporting and reviewing the TCFD disclosures. When determining Remuneration
Policy and designing incentive structures, the Remuneration Committee takes climate-
related risks and opportunities into consideration and builds these into targets and
objectives where appropriate.
Describe management’s role
in assessing and managing
climate-related risks and
opportunities.
The CEO has overall accountability for addressing climate-related risks. The Group’s risk
management framework is overseen by the Company Secretary and regularly reviewed by
the Executive Committee.
Responsibility for the identification, assessment and management of climate-related risks
and opportunities rests with the ESG Working Group which is chaired by the Company
Secretary and meets quarterly. The Working Group comprises a broad range of individuals
from across the Group’s businesses and locations including senior management. The
Working Group reports to the Executive Committee to enable it to discharge its day-to-day
responsibilities and produces information for the Board.
The Group’s Environmental Coordinator oversees and implements the Company’s
Environmental Management System which includes improvement programmes aimed at
reducing cost and environmental impact in the light of identified risks. The Environmental
Coordinator also engages closely with the Environment Agency in connection with Climate
Change Adaptation Audits and with the Confederation of Paper Industries in connection
with risk assessments. These exercises feed into the work of the ESG Working Group. Into
FY25 the Group is looking to bring further resource to the management of climate related
risks and initiatives through the recruitment of an ESG Lead to support the Working Group.
GOVERNANCE
STRATEGIC REPORT
TCFD DISCLOSURES
58
59
TRANSITIONAL RISKS CONTINUED
Net zero
emissions
Failure to achieve
net zero targets or
increased costs
associated with
decarbonisation
strategy.
Increased
costs of
carbon
taxation.
Reputational
damage.
Loss of capital.
Medium
term
High
The Group has an ambitious
decarbonisation strategy with works
completed during FY24 in readiness for
the construction of a new energy centre
at the site in Burneside, a project
supported by government funding.
The Group also draws electricity from
green sources including solar and
hydroelectricity and purchases certified
green energy.
OPPORTUNITIES
Strategies across both our Paper & Packaging and Advanced Materials businesses align with developing end-user trends
which address climate change. Short-medium term opportunities include:
• Product offerings which incorporate the use of sustainable materials and alternatives to plastics, where innovative
solutions in our luxury packaging business including Colourform® continue to gain momentum.
• Increased levels of recycling and material substitution/diversification to reduce waste, including our CupCycling®
solution which can separate fibres from disposable coffee cups for use in packaging and other materials.
• Products and services in the growing hydrogen sector, where the materials we produce and services we offer play
a central role in the generation of hydrogen and in the manufacture of hydrogen fuel cells.
• Products and services which support the achievement of net zero targets such as the services we supply in the
carbon capture sector.
• Component lightweighting, where the materials we manufacture help to reduce weight and so carbon emissions
in sectors such as aviation.
Describe the impact of climate-
related risks and opportunities on
the organisation’s business, strategy
and financial planning.
The Board is responsible for promoting the long-term sustainable success of the Group for
the benefit of its shareholders and supporting all stakeholders. Members of the Board take
an active approach to stakeholder engagement (for more information please see our S.172
statement on page 44) with a view to understanding interests, priorities, and perspectives.
The Board takes a long-term and sustainable approach to strategy and value generation,
and recognises the risks and opportunities presented by climate change which are a
factor in Board decision-making processes.
Risks associated with climate change are considered low in the medium term, with a
strong framework of controls in place designed to minimise the risk and impact of
flooding at the Group’s Burneside site on the River Kent, and robust raw material
sourcing arrangements in place to protect business continuity.
Sustainability is central to the Group’s strategy, where climate-related opportunities are
considered in conjunction with long-term trends. Products and services offered by the
Group include the use of sustainable materials and alternatives to plastics, increased
levels of recycling, and component lightweighting, and products/services for the
hydrogen energy sector.
As a Group we have invested in green energy supplies including from solar and
hydroelectric schemes, and we have an ambitious decarbonisation strategy, with work
underway in FY24 in readiness for the construction of a new energy centre to facilitate
our move away from fossil fuels and reduce our greenhouse gas emissions.
Describe the resilience of the
organisation’s strategy, taking into
consideration different climate-
related scenarios, including a 2°C or
lower scenario.
Taking into account the Group’s mitigation strategy, the Group’s exposure to
climate-related risks is considered to be low in the medium term.
During 2024 we commenced an analysis of the potential for increased flood and drought
risk associated with climate change. The review is split into phases with initial work
focusing on the resilience of our primary site at Burneside.
Flood risk and river levels are actively managed at the Burneside site due to its location on
the River Kent. In recent years, and following Storm Desmond in 2015 (where water levels
on the River Kent reached c. 1.5m above ‘normal’ high levels) the Group has reassessed the
location of critical assets and elevated these where at risk to minimise the potential
impact of flooding, even where this is severe. Arrangements also exist to ensure that the
site can continue to operate safely. It is noted that warming of 2°C is expected to result in
sea-level rising by c. 0.2m which is not considered to present a significant risk to the site
at Burneside.
The Group’s principal site at Burneside is also dependent on water supplies for
production. Active monitoring and management of river levels mitigates the risk of
interruption. River levels can also be supplemented where necessary in periods of
sustained drought by private reservoirs over which the Company has longstanding
rights, which enable the continuous flow of water.
Further scenario analysis is planned for FY25 to provide greater insight into the potential
impacts of climate risks including in connection with our supply chains and customers.
B
STRATEGY
STRATEGIC REPORT
TCFD DISCLOSURES
Describe the climate-related risks and opportunities the organisation has identified over the short, medium and long term.
RISKS
Climate-related risks could arise over the short term (0-3 years), medium term (3-10 years) and long term (10+ years).
These timescales align with the Group’s financial planning cycle (3 years) which is used to develop the Group’s strategy. As part
of the identification and assessment undertaken in FY24 the following physical and transitional risks have been identified:
PHYSICAL RISKS
RISK
DESCRIPTION
POTENTIAL
IMPACT
TIMESCALE
POTENTIAL
SEVERITY
MITIGATION
Extreme
weather
events
Flood or other
significant weather
event impacting
Group locations.
Risk to
employee
safety.
Loss of or
damage to
assets.
Business
interuption
Short-
medium
Medium
Critical assets and materials have been
relocated/elevated on site to reduce
potential impact of flooding and
arrangements in place to ensure
employee safety. Monitoring systems
constantly measure river levels and
Flood Action Response teams are in place.
Insurance policies are maintained to
further reduce the risk of business
interruption.
Drought
Water available for
abstraction reduced
by drought.
Business
interruption
Short-
medium
Medium
River levels are continuously monitored
and can be supplemented by private
reservoirs over which the Group has long
term rights (which are operated in
accordance with arrangements with the
Environment Agency).
Operational schedules can also be
adjusted in the event of drought to
reduce exposure.
Our Centre for Innovation team is
exploring ways to reduce water
abstraction through greater levels of
recycling of process water.
TRANSITIONAL RISKS
Climate
policy
Increased costs
associated with
carbon taxation,
energy, and
effluent/waste
disposal.
Increased
Regulatory
requirements
associated with
compliance and
reporting
obligations.
Increased
costs.
Short-
medium
term
High
The Group closely monitors the cost
of carbon tax credits.
Solutions are also being explored
to enable recycling of process water
to reduce effluent discharge.
The Group’s decarbonisation strategy
is to reduce reliance on carbon-
generating energy.
Raw
material
availability
Impact of climate
change on raw
material availability
(including due to
forestry practices,
EUDR compliance,
and supplier
operations and
logistics).
Increased
costs.
Business
interruption
Short-
medium
term
High
Multiple sourcing and stocking
arrangements are maintained to
reduce risks associated with supply
chain pressures.
Procurement teams monitor and
implement appropriate hedging
strategies to mitigate pricing risks.
60
61
CONTENTS
RISK MANAGEMENT
METRICS AND TARGETS
Describe the organisation’s process
for identifying and assessing
climate- related risks.
Describe the organisation’s process
for managing climate- related risks.
Describe how processes for
identifying, assessing and managing
climate-related risks are integrated
into the organisation’s overall
risk management.
In FY24, a review of significant risks (which included the identification and assessment
of significant and emerging physical and transitional climate related risks) was carried
out led by the Company Secretary, with outputs reviewed by the Executive Committee
and Board. Climate Change Risk Adaption Risk Assessments were also carried out in line
with Environment Agency Guidelines and ISO 14091, led by the Group’s Environmental
Coordinator. These reviews build upon the Group’s materiality assessment carried out
in 2020.
Identified climate-related risks are now feed directly into the Group’s overall risk
management framework (for more information see the Risk report on pages 39 to 43).
Risks are reviewed using internal and external data by reference to factors including
likelihood of occurrence and severity of impact both prior to and after consideration
of the Group’s mitigation strategies.
Going forwards, the ESG Working Group will lead in the identification and assessment
of climate-related risks. Identified risks will be reviewed by the Working Group in
conjunction with relevant and knowledgeable personnel from across the Group to fully
understand the likelihood and severity of occurrence. Engagement is also maintained
with the Environment Agency, industry bodies, and customers in relation to climate-
related risks which provides insight. Reviews may be supported by external specialists
where appropriate.
The Working Group reports to the Executive Committee (which has responsibility for
the identification, assessment, and management of climate-related risks) and produces
information to the Board to support effective decision making and ultimate risk
oversight. The Group adopts a “Plan, Do, Check, Act” approach to risk management
as part of its commitment to continuous improvement.
Disclose the metrics used by the
organisation to assess climate-
related risks and opportunities
in line with its strategy and risk
management process.
Describe the targets used by the
organisation to manage climate-
related risks and opportunities
and performance against targets.
Various metrics are considered to support the assessment of climate-related risks and
opportunities including carbon emissions, carbon taxation levels, water supply stress
and abstraction levels, effluent and waste levels, raw material costs, energy usage, and
the proportion of recycled content utilised in production.
The Group has an ambitious target of achieving net zero emissions for scope 1 and Scope 2
by 2030 and being net zero across supply chains by 2050. Achieving this goal is dependent
on significant investment in technologies and solutions to drive energy efficiency and
facilitate the move to green energy sources. Executive remuneration targets under the
Long-Term Incentive Plan also incorporate a carbon intensity reduction target.
Water stress is managed actively with no requirements in FY24 for reservoirs to
supplement flow in the River Kent. Water abstraction and effluent discharge in the year
was all within consent limits. In future years, the Group will consider making further
disclosures subject to commercial sensitivities as part of its work to continually improve
its approach to climate-related risks.
Disclose Scope 1, Scope 2 and, if
appropriate, Scope 3 greenhouse
gas (“GHG”) emissions and the
related risks.
Please see the ESG Report on pages 48 to 56.
C
D
STRATEGIC REPORT
STRATEGIC REPORT
06
Financial Highlights
06
Commercial Highlights
07
Chair’s Letter
10
Positioned for Growth
12
Our Accelerated Growth Strategy
13
Market Trends
14
Chief Executive's Review
18
Advanced Materials in Focus
22
Paper & Packaging in Focus
26
Chief Financial Officer's Review
30
The Pension Report
36
Risk Management
39
S.172: Promoting the Success of our Group
44
ESG Report
48
Our People
54
Safety
56
TCFD Disclosures
57
GOVERNANCE
62
Board of Directors
62
Corporate Governance Statement
64
Compliance with the QCA Code
68
Report of the Audit Committee
69
Report of the Nomination Committee
71
Report of the Remuneration Committee
73
Directors’ Report
78
Statement of Directors’ Responsibilities
80
FINANCIAL STATEMENTS
82
Group Independent Auditor’s Report
82
Group Statement of Comprehensive Income
89
Statement of Financial Position
90
Statement of Cash Flows
91
Statement of Changes In Equity
92
Notes to the Financial Statements
93
Shareholder Information
132
The Strategic Report on pages 1-60 was approved by the Board on 22 July 2024 and signed on its behalf by:
Steve Adams
Chief Executive Officer
22 July 2024
62
63
BOARD OF
DIRECTORS
MARK CROPPER
Non-Executive Chair
Appointed: October 2006
Committees: Nomination
(Chair)
Mark is the sixth generation of the Cropper family to hold
this position. Following university, he pursued a career in
environmental finance and renewable energy. Mark was
first appointed to the Board in 2006 and became Chair in
2010. Mark also chairs the Board’s Nomination Committee.
External appointments:
Ellergreen Hydro Projects Ltd (Director)
Paper Foundation (Director)
Kendal Futures CIC (Director)
Rydal Hydro Ltd (Director)
Scandale Hydro Ltd (Director)
Cropper (Trustees) Ltd (Director)
Ellergreen (Trustees) Ltd (Director)
Ellergreen Group LLP (Designated Member)
STEVE ADAMS
Chief Executive Officer
Appointed: January 2017
Committees: Executive
(Chair)
Steve joined James Cropper in 2017 as Managing Director
of the Paper division and was appointed Chief Executive
Officer in 2022. Prior to this, Steve worked for 30 years at
3M, holding various leadership and director level roles both
in the UK and Europe covering display, traffic and vehicle
safety, telecommunications, electronics, and energy
markets. Steve chairs the Executive Committee which
comprises the Group’s most senior executive leaders.
ANDREW GOODY
Chief Financial and
Operations Officer
Appointed: November 2023
Committees: Executive
Andrew was appointed as Chief Financial and Operations
Officer in November 2023. He has spent over 20 years in
leadership roles across a variety of sectors and brings
extensive financial, commercial, M&A, and business
transformation experience. Andrew joined James Cropper
from Bibby Marine, where he was Finance Director. Prior to
this he worked as Finance Director for TJ Hughes. Andrew
is a chartered accountant and started his career at KPMG.
PATRICK WILLINK
Chief Innovation Officer
Appointed: March 1998
Committees: Executive
Patrick is the fourth generation of the Willink family
in the business. Patrick joined the Group in 1990 and was
appointed to the Board in 1998. He became Chief Technology
Officer in 2014, where he was instrumental in the creation
of the Colourform® product offering and subsequently Chief
Innovation Officer in April 2023. Patrick was President of
the Confederation of Paper Industries Ltd from 2014 to 2019.
External appointments:
Confederation of Paper Industries Ltd (Director)
Confederation of European Paper Industries Ltd (Director)
Paper Foundation (Director)
MARTIN COURT
Senior Independent Director
Appointed: November 2021
Committees: Nomination,
Audit, Remuneration
Martin was appointed as Senior Independent Director
in November 2021. He has a strong track record as both
an Executive and Non-Executive in the chemicals and
materials sectors. Martin was previously Chief Commercial
Officer at Victrex plc and brings a wealth of strategic,
technical, innovation and commercial experience which
aligns with the Group’s plans for growth.
External appointments:
Material Insights Limited (Director)
Food Freshness Technology Limited (Chair)
LYNDSEY SCOTT
Non-Executive Director
Appointed: August 2019
Committees: Nomination, Audit,
Remuneration (Chair)
Lyndsey joined the Board as a Non-Executive Director
in 2019. She has spent most of her career in multi-national
organisations and management consultancy across
different sectors, most recently with International Personal
Finance plc as Chief Human Resources Officer (a role from
which she retired in May 2024). Lyndsey brings experience
in strategy creation, planning and delivery of large scale
cultural and performance change. Lyndsey Chairs the
Board’s Remuneration Committee.
External appointments:
Billington Holdings plc (Non-Executive Director)
SARAH MILES
Non-Executive Director
Appointed: November 2021
Committees: Nomination,
Audit, Remuneration
Sarah was appointed as a Non-Executive Director
in November 2021. Sarah brings strong leadership,
strategic, and commercial experience. She is currently
Chief Executive Officer at hush, was Chief Executive Officer
at Feelunique and Sephora UK, and has held Executive
roles in Amazon and Diageo.
External appointments:
hush (Chief Executive Officer)
The British Retail Consortium (Board Member)
JIM SHARP
Non-Executive Director
Appointed: September 2009
Committees: Nomination,
Audit (Chair), Remuneration
Jim was appointed as a Non-Executive Director in 2009.
He began his career in financial services with J. Henry
Schroder & Co. from 1992 to 2002, where he was a Director.
Since then, Jim has held various senior roles across private
equity backed businesses. As previously announced,
Jim will stand down from the Board and as Chair
of the Audit Committee at the Group’s AGM taking place
in September 2024.
External appointments:
The Cotswold Company (Chair)
The Brunner Investment Trust plc (Director)
Paper Foundation (Director)
MATTHEW RATCLIFFE
General Counsel and
Company Secretary
Appointed: September 2023
Committees: Executive
Matthew joined James Cropper in September 2023
as General Counsel and Company Secretary. Matthew is
a solicitor with broad commercial, corporate and regulatory
experience. He began his career at Pinsent Masons LLP
and was previously Group Legal Director and Company
Secretary at Carr’s Group plc.
GOVERNANCE
BOARD OF DIRECTORS
64
65
QCA CODE AND STATEMENT
OF COMPLIANCE
The Company’s shares are listed on the
Alternative Investment Market (AIM) of
the London Stock Exchange and subject
to AIM Rules. We continue to adopt the
QCA Corporate Governance Code (the
“Code”) which provides an appropriate
and practical governance framework
and is implemented through robust
practices and systems of control aligned
to our business model. We consider that
meaningful compliance with the
principles of the Code should provide
shareholders with confidence in how
the Group operates. During the year,
we complied with all principles of the
Code in full and became a QCA member.
THE BOARD
The Board is responsible for promoting
the long-term sustainable success of the
Group for the benefit of its shareholders
and supporting all stakeholders. The
Board establishes the Group’s purpose
and sets its strategic direction, ensuring
that these remain aligned with the
Group’s culture and values. For
information on the Board’s focus
areas, please see the Board Activities
section below.
The Board consists of Senior Executive
Management together with experienced
Non-Executive Directors (details of
Board members can be found on pages
62 to 63). The Board meets regularly in
accordance with its planned agenda,
and otherwise as may be required.
Meetings take place in person or where
necessary by video conferencing.
All Directors have full and timely access
to relevant information. The Board
maintains a schedule of matters
reserved for its approval, which is
regularly reviewed and made available
on the Group’s website.
BOARD COMMITTEES
The Board delegates certain
matters to its Audit, Remuneration,
and Nomination Committees which are
comprised of Non-Executive Directors.
Written terms of reference govern the
responsibilities of the Committees,
which are reviewed regularly by the
Board and made available on the
Group’s website.
The Committees ensure that there is
independent oversight of the matters
within their remit and assist the Board
in fulfilling its responsibilities. Where
appropriate, each Committee has the
power to appoint external advisors to
support the performance of its duties.
Full reports from each of the
Committees, detailing their
responsibilities, key considerations,
and actions during the year, are set out
from pages 69, 71 and 73.
EXECUTIVE COMMITTEE
The Executive Committee is responsible
for developing strategy recommendations
to the Board, executing the Board’s
approved strategy, day-to-day
management of the Group’s operations,
and developing and implementing the
Group’s safety, environmental, social
and governance framework.
The Executive Committee consists
of the Executive Directors, Divisional
Managing Directors and senior
managers including the People and
Culture Director and General Counsel
and Company Secretary. Written terms
of reference govern the responsibilities
of the Committee, which are reviewed
regularly and made available on the
Group’s website.
Committee meetings to discuss
performance and key developments
take place monthly. Update briefings
take place weekly. Focused strategic
discussions take place twice yearly.
Feedback from meetings is shared
with the Board.
DIVISIONAL SENIOR
LEADERSHIP TEAMS
The Senior Leadership Teams within
each of our Advance Materials and
Paper & Packaging divisions have
day-to-day responsibility for managing
operations, monitoring performance
and commercial developments, and
delivering business strategy.
The Senior Leadership Teams comprise
Divisional Managing Directors together
with divisional senior management,
supported by members of Group
functional teams for Finance and HR.
Meetings take place monthly, with
feedback being shared with the
Executive Committee.
OTHER GOVERNANCE
STRUCTURES
Other key governance structures
within the Group include:
PENSIONS COMMITTEE
The Pensions Committee is responsible
for supporting the Board in the discharge
of the Company’s obligations and powers
in connection with the Company’s
defined benefit pension schemes. It
closely monitors performance of the
schemes with the Trustee and investment
managers, engages with the Trustee in
connection with investment strategy,
and ensures that appropriate governance
arrangements exist.
The Committee is chaired by the Chief
Financial and Operations Officer and
comprises other Board members and
senior management. It meets regularly
as required from time to time.
ESG WORKING GROUP
The Board has a strong commitment
to ESG, which is central to the James
Cropper purpose. In early 2024, we
launched our ESG Working Group to
build upon the work of our previous ESG
Committee. The Working Group meets
quarterly to support the Board and
Executive Committee in the
development and effective delivery of
strategic ESG objectives. The Working
Group is chaired by the General Counsel
and Company Secretary and comprises a
diverse range of knowledgeable and
passionate people from across the
Group at all levels and from a range of
sites who actively participate. For more
information on the ESG Working Group,
see page 48.
DIVISION OF
RESPONSIBILITIES
The roles of the Chair and Chief
Executive are separate, clearly
understood, and agreed by the Board.
THE NON-EXECUTIVE CHAIR
The Chair leads the Board, ensuring
its effectiveness while taking account
of the interests of the Group’s various
stakeholders, promoting high standards
of corporate governance.
Key responsibilities include:
• Chairing the Board, its Nomination
Committee and General Meetings.
• Ensuring the Directors
effectively contribute and engage
in constructive debate.
• Setting the Board’s agenda in
conjunction with the CEO and
Company Secretary.
• Ensuring that Board’s effectiveness
is reviewed annually and leading
the performance evaluation of
the Chief Executive and
Non-executive Directors.
• Ensuring that effective induction
and training programmes exist
and encouraging the continued
development of Directors and
the Board as a whole.
• Serving as an ambassador for the
Group and its products and services,
culture, and values.
• Engaging with shareholders and other
stakeholders and ensuring that the
Board develops an understanding of
external views and interests.
Robust corporate governance is central to the delivery
of our long-term strategic objectives. The Board is
committed to maintaining high standards, and effective
practices which complement the Group’s operations.
Chair’s introduction to Corporate Governance
Dear Shareholder
On behalf of the Board, I am pleased to
present our Corporate Governance Report
for the period ended 30 March 2024. This
statement provides an overview of our
governance framework and how the
Board discharges its responsibilities.
The Board recognises the fundamental
importance of effective governance to
long-term value creation, and FY24
saw the continued development of
the Group’s approach which included
becoming members of the Quoted
Companies Alliance. We continue
to apply and report against the QCA
Corporate Governance Code, and I am
pleased to confirm that during FY24
we complied with its principles in full.
In addition to the QCA Code, the
Board monitors the FRC’s Corporate
Governance Code, and developing
best-practice, to ensure our approach
remains robust.
Despite trading challenges, FY24 was
a year in which significant strategic
progress was made (see my letter on
pages 10 to 11 for more information).
We also saw changes on the Board
and in key management roles across the
organisation and I am delighted by the
level of talent James Cropper continues
to attract. The Board is confident that
the business is now well positioned for
growth, and that we possess the
leadership, skills, and experience
to deliver on the Board’s long-term
strategic plans.
In July 2024 we were pleased to confirm
that Jon Yeung would be joining the
Board following conclusion of our AGM
in September 2024 as an independent
Non-Executive Director and Audit
Committee Chair in succession to Jim
Sharp who will stand down from the
Board at the AGM after 15 years’ service.
The Board is grateful for the significant
contribution made by Jim in supporting
the Board and the business during his
tenure.
There were also changes to the Executive
team, with Andrew Goody joining as
Chief Financial and Operations officer in
November 2023, and Patrick Willink
being appointed to the new role as
Chief Innovation Officer in April 2023.
In September 2023 we also recruited
Matthew Ratcliffe as General Counsel
and Company Secretary to help drive
our commitment to effective governance.
Following the appointment of Jon Yeung,
the Board will comprise myself (as
Non-Executive Chair) together with
three Executive Directors and four
independent Non-Executive directors,
presenting an excellent balance of
experience, skills, and knowledge,
together with robust independent
challenge.
Full details of changes to the Board in
the year can be found in the Nomination
Committee report from page 71.
In the year, we reviewed our governance
structures to ensure that these remain
robust and consistent with our business
model. This resulted in various updates
including the establishment of an ESG
Working Group, to build upon the
progress made by our previous ESG
Committee. We also refreshed our
Pensions Committee, under the
leadership of Andrew Goody, and
launched a new Group-wide delegation
of authority framework to provide
consistency across operations and
empower our people in performing their
roles. We also built upon our Code of
Ethics with the launch of an independent
whistleblowing service in conjunction
with Safecall, to provide our people with
the ability to report concerns in the
workplace totally anonymously.
During the year, the Remuneration
Committee reviewed our discretionary
share plans to ensure these remain
aligned with best practice and
consistent with the Directors’
Remuneration Policy. For further
information on these changes please
see the Remuneration Committee
Report from page 73. Following the AGM,
the Remuneration Committee
will comprise solely of independent
Non-Executive Directors, to avoid the
risk of perceived conflicts of interest and
ensure that remuneration arrangements
are robustly challenged.
In 2024, I met with some of our biggest
shareholders to discuss the business
and the Board’s strategy, challenges and
change during the year, my involvement
as Non-Executive Chair, and generally to
provide the opportunity to ask
questions. Feedback from these
meetings was constructive and provided
much welcome insight to the views of
our investors. As a Board we are keen
to understand the interests of our
investors, and I am very grateful to those
who took the time to meet this year.
Transparent and effective governance
is fundamental to the Group’s
performance, reputation, and integrity.
The Board remains committed to high
standards, as part of its strategy to
create value through long-term
sustainable growth.
Mark Cropper
Non-Executive Chair
CORPORATE GOVERNANCE
REPORT: CHAIR’S INTRODUCTION
GOVERNANCE STRUCTURES
GOVERNANCE
CORPORATE GOVERNANCE STATEMENT
66
67
THE CHIEF EXECUTIVE OFFICER
The Chief Executive is responsible for
developing the Group’s strategy and
the operating performance of the Group.
Key responsibilities include:
• The effective management of the
Company’s businesses.
• Leading development of the
Company's strategic direction and
implementing the agreed strategy.
• Developing objectives for the
executive team.
• Managing the Company’s risk profile
and maintaining an effective
framework of controls.
• Ensuring effective succession
plans are in place and leading in the
development of people.
• Ensuring effective communication
with shareholders and key
stakeholders on business strategy
and performance.
• Providing regular operational
updates to the Board.
SENIOR INDEPENDENT DIRECTOR
The responsibilities of the Senior
Independent Director include:
• Providing a sounding board for the
Chair and acting as an intermediary
for Non-Executive Directors where
necessary.
• Working closely with the Chair and
other Directors, and/or shareholders
to resolve issues as may be required
from time to time.
• Leading the appraisal of the of the
performance of the Chair.
NON-EXECUTIVE DIRECTORS
The Non-Executive Directors bring
insight and experience to the Board.
They have responsibility for:
• Constructively challenging the
strategies proposed by the
Executive Directors.
• Scrutinising the performance of
management in achieving agreed
goals and objectives.
• Devoting time to develop and refresh
knowledge and skills, and being
well-informed about the Company.
• Playing a leading role in the functioning
of the Board Committees.
• Meeting with the Senior Independent
Director to review the Chair’s
performance and other matters.
The Board is supported by the Company
Secretary, who assists in upholding
corporate governance standards. The
Company Secretary ensures compliance
with Board procedures and provides
support to the Chair. He advises the
Board on corporate governance
developments and ensures that the Board
receives information in a timely manner.
BOARD ACTIVITIES
The Board held seven scheduled
meetings during FY24, which were
arranged to coincide with key dates
in the Group’s financial calendar.
In addition to regular scheduled
meetings, a number of additional
meetings took place during the year
in order to deal with specific business
arising from time to time. Principal
considerations at Board meetings
include:
• Health and Safety
• Strategy
• Financial Performance
• Risk
• Environment
• People and Culture
• Stakeholder engagement
• Governance
In advance of all Board meetings the
Directors are supplied with papers
covering the matters to be addressed.
Members of the Executive Committee,
senior management, or third parties
may also attend meetings, or parts of
meetings, by invitation from time to
time. Executive Directors may attend
Committee meetings (or parts of such
meetings) by invitation where required.
The Company Secretary is responsible to
the Board for the timeliness and quality
of information.
BOARD COMPOSITION
At the date of this report, the Board
comprises three Executive Directors,
a Non-Executive Chair and four
Non-Executive Directors. Following the
AGM in September 2024, four Non-
Executive Directors will be considered
independent by the Board.
Biographies for all current Board
members are set out on pages 62 to 63.
For information on changes to the Board
during the year, see the Nomination
Committee report which can be found
from page 71.
SKILLS AND EXPERIENCES
The Board recognises the importance
of Directors bringing a strong balance
of skills, knowledge and experience to
delivery of the Company’s strategic
objectives. During the year, the
Nomination Committee undertook an
assessment of the knowledge, skills,
experience and diversity on the Board.
The outcomes from this exercise were
reviewed by the Board and have been
used to inform succession planning.
This process will the subject of regular
review to ensure the Board remains
well balanced.
DIRECTOR INDEPENDENCE
The Board reviews the independence
of its Non-Executive Directors regularly.
Taking into account all circumstances,
the Board considers Non-Executive
Directors Martin Court, Sarah Miles and
Lyndsey Scott to be independent. The
Board also considers Jon Yeung, who will
join the Board following our AGM in
September, to be independent. Whilst it is
acknowledged that Jim Sharp has served
on the Board in excess of nine years, the
Board considers that this alone has not
compromised his independence and that,
in all circumstances notwithstanding his
tenure, he has remained independent of
judgement and character. Mark Cropper,
Steve Adams, Andrew Goody, and Patrick
Willink are not considered by the Board
to be independent. Following the AGM in
September 2024, the Board will comprise
a Non-Executive Chair, three Executive
Directors and four independent Non-
Executive Directors which provides a
good balance of organisational
knowledge, entrepreneurial leadership,
and robust independent challenge.
CONFLICTS OF INTEREST
The Companies Act 2006 and the
Company’s Articles of Association
require the Board to consider actual
or potential conflicts of interest.
The Board has a policy for managing and,
where appropriate, authorising actual or
potential conflicts of interest, or related
party transactions. Directors are
required to declare any interests they or
their close family members have in third
party organisations, as well as other
circumstances which could give rise to
a conflict of interest. Registers of related
parties and third-party interests are
regularly reviewed by the Board.
Directors are required to seek clearance
from the Chair before taking on any new
appointments to ensure that any potential
conflicts of interest can be identified and
addressed appropriately. At the outset
of every Board and Committee meeting,
Directors are required to declare any
actual or potential conflicts in relation
to matters on the agenda.
EFFECTIVENESS
The Board adopts an inclusive and open
style which encourages collaboration
and the free flow of information
between Executive and Non-Executive
Directors. Board members are
encouraged to discuss matters openly
and add value by sharing personal skills
and experiences. No individual or group
of individuals dominate the Board’s
decision-making process. All Directors
communicate regularly and contact with
senior executives within the Group is
sought and encouraged.
In the year the Board undertook an
internal effectiveness review, which was
led by the Senior Independent Director.
The review involved a series of one-to-one
discussions held by the SID with each
Board member. These conversations were
framed around three key themes: (i) what
the Board does well; (ii) what the Board
can improve; and (iii) the effectiveness
of the Chair. The effectiveness of Board
Committees was also considered.
The inputs from Directors and outcomes
from those conversations was reviewed
by the SID and the Chair and developed
into recommendations which were
presented to the Board.
It was noted that FY24 had been a year of
significant change on the Board. Despite
this, it was generally considered that
Board effectiveness had grown due to
improved meeting structure and levels
of reporting leading to open discussion
and good levels of constructive challenge.
Recommendations included:
• Developing new KPIs to enhance
financial reporting and the monitoring
of performance.
• Increasing the Board’s focus on strategy
through separate sessions in FY25.
• Reviewing Executive objectives to
ensure these align with strategy.
• Extending the oversight of the
Remuneration Committee to broader
workforce considerations.
Recommendations from the previous
review conducted in 2023 included
enhancing the contribution of the
Board’s Committees and increasing
interaction between Board members
outside of the Boardroom. In FY24 we
built upon these recommendations,
undertaking a full review of our Board
and Committee structures to ensure
strong alignment and good information
flows. We also arranged various dinners
and other meetings between Directors,
often also involving senior management,
throughout the year.
The Board recognises the importance
of regular reviews with a view to
continuously improving how it operates.
DIVERSITY
The Board recognises the benefits of
diversity at all levels of the organisation.
Diversity on the Board was reviewed in
the year by the Nomination Committee
and this approach will help support
effective future succession planning.
Our female representation on the Board
is 25%. For more information on the
Group’s approach to diversity, see the
Nomination Committee Report from
page 71.
INDUCTION AND
PROFESSIONAL
DEVELOPMENT
Upon joining the Group, Directors are
provided with an induction which
ensures that they are fully informed and
have the necessary support to perform
their roles effectively. This typically
involves meetings with members of the
Board together with senior management,
visits to operational sites and the
provision of information on the Group’s
products, markets and strategy, and key
governance arrangements.
The Chair ensures that Directors receive
information to enable them to perform
their duties properly. Briefings are
provided to the Board on governance,
regulatory, financial and legal matters
by the Company Secretary, Chief
Executive, the Chief Financial and
Operations Officer, and external
advisors where required. Directors are
aware of their responsibility to regularly
update their skills and knowledge.
SUPPORT
Directors can obtain independent
professional advice at the Group’s
expense in performance of their duties.
None of the Directors obtained
independent professional advice in the
period under review. All Directors have
access to the advice and the services of
the Company Secretary and access to
senior management across the Group
where required.
ELECTION AND RE-ELECTION
OF DIRECTORS
In accordance with best practice, all
current Directors will stand for election
(or re-election) annually at the
Company’s AGM (save for Jim Sharp who
will stand down from the Board at the
conclusion of the AGM).
RISK MANAGEMENT AND
INTERNAL CONTROLS
The Board recognises that driving
growth in value requires an appropriate
balance of risk and reward. Effective risk
management is fundamental to the
Group’s long-term sustainable success.
The Board regularly reviews the Group’s
principal and emerging risks and
monitors the effectiveness of the
Group’s systems of control. Further
information is contained in the Risk
Report on pages 39 to 43.
GOING CONCERN
In carrying out their duties in respect
of going concern, the Directors carry
out a review of the Group and Company’s
financial position and cash flow
forecasts for at least 12 months from
the date of approval of the financial
statements. These are based on a
comprehensive review of revenue,
expenditure and cash flows, taking into
account specific business risks and the
current economic environment.
RELATIONS WITH
SHAREHOLDERS
The Board recognises the importance
and benefits of regular engagement
with shareholders and the Group’s
other stakeholders. Further information
is contained in the s.172 Statement on
pages 44 to 45.
ANNUAL GENERAL
MEETING (AGM)
Our AGM will be taking place on 4
September 2024. All Directors will
attend the AGM, and following the
meeting to consider the proposed
resolutions, there will be opportunity
for shareholders to meet the Directors
informally.
I very much look forward to the event
which serves as a useful opportunity
to engage with our investors, answer
questions, and provide further insight
into the James Cropper business.
Mark Cropper
Non-Executive Chair
1 Appointed 27 November 2023 2 Stood down on 14 June 2023 3 Stood down on 31 January 2024
4 Part or all of meeting by invitation
ATTENDANCE AT BOARD AND COMMITTEE MEETINGS IN FY24
BOARD MEMBER
BOARD
NOMINATION
COMMITTEE
AUDIT
COMMITTEE
REMUNERATION
COMMITTEE
MARK CROPPER
7
2
24
54
STEVE ADAMS
7
24
24
54
ANDREW GOODY1
2
24
0
34
PATRICK WILLINK
6
0
0
0
MARTIN COURT
7
2
2
5
LYNDSEY SCOTT
6
2
2
4
SARAH MILES
7
2
1
5
JIM SHARP
7
2
2
5
ISABELLE MADDOCK2
2
0
0
0
JAMES GRAVESTOCK3
5
0
0
0
GOVERNANCE
CORPORATE GOVERNANCE STATEMENT
68
69
HOW WE APPLY
THE QCA CODE
AUDIT COMMITTEE
PRINCIPLE
COMPLIANCE
1
Establish a strategy and business
model which promote long-term
value for shareholders.
• Information regarding the Group’s strategy and business model can be found
in the Strategic Report and particularly on pages 12 to 27.
• Information regarding the governance structures responsible for the establishment
of the Group’s strategy can be found in the Corporate Governance Report on page 65.
2
Seek to understand and
meet shareholder needs
and expectations.
• Information regarding the Board’s arrangements for engaging with shareholders and
considering shareholder interests, including engagement during the year in question, can be
found in the s.172 Report on pages 44 to 45.
3
Take into account wider
stakeholder and social
responsibilities and their
implications for long-term success.
• Information regarding the Board’s arrangements for engaging with stakeholders and
considering stakeholder interests, including engagement during the year in question, can be
found in the s.172 Report on pages 44 to 45, and in the ESG Report on pages 48 to 56 .
4
Embed effective risk management,
considering both opportunities and
threats, throughout
the organisation.
• Information regarding the Group’s arrangements for identifying, reviewing, and managing
risks can be found in the Risk Report on pages 39 to 43 and the Group’s TCFD Disclosures
on pages 57-60.
5
Maintain the Board as a
well-functioning, balanced
team led by the chair.
• Information regarding the operation of the Board and its Sub-Committees, and the
division of responsibilities between Board members, can be found in the Corporate
Governance Report on pages 65 to 67.
• Information regarding Board activities in the year, principal considerations at
Board meetings, and Board meeting attendance, can be found in the Corporate
Governance Report on page 65 to 67.
• Information regarding the independence of Board members can be found in the
Corporate Governance Report on page 66.
• Information regarding the support of the Company Secretary to the Board
can be found in the Corporate Governance Report on page 67.
6
Ensure that between them the
Directors have the necessary
up-to-date experience, skills,
and capabilities.
• Information regarding the skills and experiences of each individual Director
can be found on pages 62 to 63.
• Information regarding the skills and capability assessment carried out by the
Board in the year can be found in the Corporate Governance Report on page 66.
• Information about Board succession processes in the year can be found in the
Nomination Committee Report on page 71 to 72.
• Information regarding Non-Executive Director inductions and continuous professional
development can be found in the Corporate Governance Report on page 67 and the Nomination
Committee Report on page 72.
7
Evaluate Board performance based
on clear and relevant objectives,
seeking continuous improvement.
• Information regarding the effectiveness review carried out by the Board in the year,
including the review process together with identified recommendations, and progress
made in the year against previous recommendations, can be found in the Corporate
Governance Report on page 67.
8
Promote a corporate culture
that is based on ethical values
and behaviours.
• Information regarding the Company’s purpose and business model can be found in
the Strategic Report on pages 2 to 27.
• Information regarding the Company’s approach to culture (including people, safety,
diversity, ethics and sustainability) can be found in the ESG Report on pages 48 to 55.
9
Maintain governance structures
and processes that are fit for
purpose and support good
decision-making by the Board.
• Information regarding the operation of the Board and its Sub-Committees, and the
division of responsibilities between Board members, can be found in the Corporate
Governance Report on pages 64 to 67.
10
Communicate how the Company
is governed and is performing
by maintaining a dialogue with
shareholders and other relevant
stakeholders.
• Information regarding the Board’s arrangements for engaging with shareholders
and other stakeholders, including engagement during the year in question, can be found in the
s.172 Report on pages 44 to 45.
I am pleased to introduce the Audit Committee report
for the period ended 30 March 2024. This was the second
year of working with Grant Thornton, and my final year
chairing the Audit Committee.
Jim Sharp, Audit Committee Chair
ROLE OF THE COMMITTEE
The Audit Committee is constituted
by the Board and is responsible for
assisting the Board in discharging its
responsibilities for reviewing the
Company’s financial statements and the
effectiveness of internal controls, and to
monitor the effectiveness, performance
and objectivity of the external auditors.
COMMITTEE MEMBERSHIP
The Committee comprises only
Non-Executive Directors and comprises
Jim Sharp (Chair), Lyndsey Scott, Martin
Court and Sarah Miles. As announced on
22 July 2024, Jon Yeung will join the
Board as an independent Non-Executive
Director and Audit Committee Chair
following the AGM in September 2024.
I will stand down from the Board and
as Audit Committee Chair at the AGM.
Following the AGM the Committee
will comprise solely of independent
Non-Executive Directors.
Members of the Committee collectively
have a deep understanding of the
Group’s operations and sectors together
with knowledge and understanding
of financial matters and risk
management. As current Chair, I have
over 30 years’ financial services
experience. My successor, Jon Yeung,
is a chartered accountant and brings
a wealth of finance experience from
executive roles. Jon is also currently
a Non-Executive Director and Audit
Committee Chair at Fera Science.
MEETINGS IN THE YEAR
There were 2 scheduled meetings in
FY24. Details of Director attendance
at meetings is shown on page 66.
Unscheduled meetings also took place
during the year, particularly relating
to the extended audit process relating
to the FY23 year-end.
RESPONSIBILITIES
OF THE COMMITTEE
The Committee operates under terms
of reference which are reviewed
annually and published on the
Company’s website at
www.jamescropper.com.
Key responsibilities of the
Committee include:
• Monitoring the integrity of the
Group’s financial statements and
results announcements.
• Reviewing the effectiveness of Group’s
systems of internal financial control.
• Reviewing the Annual Report and
Accounts and advising the Board on
whether, taken as a whole, it is fair,
balanced and understandable.
• Reviewing and approving statements
to be included in the Annual Report
concerning internal controls, risk
management, and the viability
statement.
• Reviewing the Group’s arrangements
for employees to raise concerns about
possible wrongdoing.
• Making recommendations to the
Board in relation to the appointment,
re-appointment and removal of the
external auditor.
• Overseeing the relationship between
the external auditor, including
approving remuneration arrangements
and engagement terms, and evaluating
the auditor’s independence.
To support the Committee in effectively
discharging its obligations, reports from
the external auditor and senior finance
personnel led by the Chief Financial and
Operations Officer, are considered and
constructively challenged.
KEY ACTIVITIES IN FY24
This was the second year working with
Grant Thornton UK LLP as external
auditor. Key activities included:
• Reviewing key reporting estimates and
judgements, and the Group’s financial
statements to ensure these were fair,
balanced and understandable.
• Reviewing the Group’s disclosures
concerning Risk, including those
consistent with the recommendations
of the Task Force on Climate-Related
Disclosures.
• Agreeing terms of engagement for the
external auditor including the external
audit fee.
• Considering the independence
of the external auditor.
The Committee also reviewed
recommendations arising from the
Board’s effectiveness review during
the year including planning to ensure
a smooth Committee Chair succession.
KEY ESTIMATES
AND JUDGEMENTS
An important responsibility of the
Committee is to review and agree
significant estimates and judgements
made by management. To discharge this
responsibility, the Committee reviewed
detailed written reports from the Chief
Financial Officer and the external
auditor in connection with the Group’s
results. The Committee considered the
content of these reports, providing
appropriate challenge, in evaluating the
appropriateness and robustness of the
estimates and judgements adopted.
Key estimates and judgements
considered in relation to the Group’s
FY24 full year results included:
LIABILITIES IN CONNECTION WITH
THE GROUP’S DEFINED BENEFIT
PENSION SCHEMES
The Committee reviewed a valuation
report of the scheme’s investments
prepared in accordance with IAS19,
together with key actuarial assumptions
used to value the scheme obligations
including but not limited to rates of
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REPORT OF THE AUDIT COMMITTEE
70
71
inflation, discount rates and life
expectancies. The assumptions made
were reviewed, supported by
independent actuarial specialists,
to assess their appropriateness, and
the disclosures on the sensitivity of
the obligations to changes in such
assumptions were reviewed. The
Committee was satisfied that the
scheme’s assets were appropriately
valued, that the assumptions adopted
in relation to the scheme’s liabilities
were appropriate, and that disclosures
made in relation to the scheme
were appropriate.
IMPAIRMENT
The Committee reviewed the future
business performance assumptions
adopted by management for the Paper
& Packaging business following three
successive years of operating losses
and challenging market conditions.
Taking into consideration and
challenging assumptions around future
revenue growth rates and the discount
rates applied to future cash flows
(which included considering specialist
advice) the Committee concurred
with management that it would be
appropriate to recognise an impairment
of £4.4m against the carrying value
of the fixed assets in the Paper
& Packaging business.
The Committee also reviewed the
valuation of investments in subsidiaries
and intra-group loans due to the
performance of James Cropper
Speciality Papers Limited and James
Cropper 3D Products Limited being
below expectations. In the light of actual
performance, together with estimation
uncertainties in the assessment of
future performance in those two
businesses, the Committee determined
that it would be appropriate to record
an impairment of £23.0m against the
value of such investments and intra-
group loans (£16.1m against James
Cropper Speciality Papers Limited
and £6.9m against James Cropper 3D
Products Limited).
EXTERNAL AUDITOR AND
INDEPENDENCE
The reappointment of Grant Thornton
UK LLP as the Group’s external auditor
was recommended by the Board and
approved by shareholders at the
AGM on 26 September 2023.
In the year, the Committee considered
the expertise and independence of
Grant Thornton UK LLP, as well as the
terms of engagement and remuneration.
In addition, Grant Thornton confirmed
its compliance with regulatory and
professional standards (including
ethical standards), and that it’s
objectivity and independence was not
compromised. Grant Thornton’s audit
partner is David White and this is
his second year in that role.
The Committee considers Grant
Thornton to remain independent and
recommended to the Board that Grant
Thornton be reappointed as the Group’s
external auditor at the AGM in
September 2024.
GOING CONCERN
The Committee considered cash flow
forecasts for the 18 month period to
September 2025. Reviewing a severe
but plausible scenario, the Committee
noted that whilst the Group had
significant headroom under available
facilities, the forecasts showed a breach
of the Group’s banking covenants at the
test dates in June 2024 and September
2024. Following discussions with the
Group’s bankers, a temporary variation
to the covenants was agreed in respect
of those test dates, which the Group
is expected to meet even applying
the severe but plausible downside
scenario. The Committee was
accordingly satisfied that the Group
is a going concern.
NON-AUDIT SERVICES
Since first being appointed as external
auditor, Grant Thornton UK LLP has
not provided any non-audit services
to the Group.
INTERNAL CONTROLS AND
RISK MANAGEMENT
During the year the Committee
monitored the effectiveness of the
Group’s internal control and risk
management systems. The Committee
also reviewed the Group’s disclosures
in relation to internal controls,
principal and emerging risks,
including disclosures designed to meet
the recommendations of the Task Force
on Climate Related Disclosures, which
can be found on pages 50 to 51. This was
the first time the Group reported against
TCFD recommendations (see pages 57 to
60) and work remains ongoing with the
support of the ESG Working Group to
enhance our disclosures going forwards.
WHISTLEBLOWING
The Board is committed to building
a responsible culture where individuals
can report concerns confidently and
without fear of retaliation. To build
upon the Group’s Code of Ethics and
Whistleblowing Policy, in FY24 the
Group launched an independent
reporting service in conjunction with
Safecall, where employees can remain
entirely anonymous should they wish
to do so. The Committee considers the
Group’s whistleblowing arrangements
regularly to ensure these remain
effective together with any reports
made by employees and actions
to address concerns raised.
AGM 2024
I will be available at the forthcoming
AGM in September 2024 to respond to
any shareholder questions that might be
raised on the Committee’s activities.
Jim Sharp
Audit Committee Chair
REPORT OF THE
NOMINATION COMMITTEE
I am pleased to present the Nomination Committee
Report for the period ended 30 March 2024. This was
a busy year for the Committee, with a number of Executive
Director and key senior management changes, and a
succession process relating to our Audit Committee Chair.
Mark Cropper, Nomination Committee Chair
ROLE OF THE COMMITTEE
The Nomination Committee is
constituted by the Board. Its primary
responsibility is to identify and
nominate candidates to fill vacancies
arising on the Board from time to time.
The Committee also keeps under review
the balance of skills, knowledge and
experience on the Board, and monitors
and supports senior management
succession planning.
COMMITTEE MEMBERSHIP
The Committee consists only of Non-
Executive Directors and comprises Mark
Cropper (Chair), Jim Sharp, Lyndsey
Scott, Martin Court and Sarah Miles.
As announced on 22 July 2024, Jim Sharp
will stand down from the Committee and
the Board at the AGM in September 2024,
following which Jon Yeung will join the
Board as an independent Non-Executive
Director and as a member of the
Nomination Committee.
MEETINGS IN THE YEAR
There were 2 scheduled meetings
in FY24. Details of Director attendance
at meetings is shown on page 66.
Unscheduled Committee meetings also
took place in the year, which largely
related to Board succession planning.
RESPONSIBILITIES OF
THE COMMITTEE
The Committee operates under terms of
reference which are reviewed annually
and are published on the Company’s
website (www.jamescropper.com).
Key responsibilities of the
Committee include:
• Reviewing the structure, size and
composition (including the skills,
knowledge, experience and diversity)
of the Board and making
recommendations to the Board
with regard to any changes.
• Ensuring plans are in place for the
orderly succession of Board and
senior management positions and
overseeing leadership development
across the Company.
• Leading Board succession processes
and making recommendations to the
Board on proposed appointments.
• Setting the Company’s policy
on diversity and inclusion and
overseeing its implementation
in succession planning.
KEY ACTIVITIES IN FY24
This was a busy year for the Committee
including various changes on the Board
and in senior management positions.
The Committee also undertook an
evaluation to ensure that the Board
continues to contain the balance of
skills, knowledge and experience
required to deliver the Board’s strategy.
Key succession planning activities for
the Committee included as follows:
• On 19 April 2023, James Cropper
announced its strategy for accelerated
growth and a revised business
structure. As part of this, and to
increase the Group’s focus on
innovation to drive future growth,
Patrick Willink moved into a new
position as Chief Innovation Officer
leading a newly developed Centre for
Innovation.
• In June 2023 it was announced that
Isabelle Maddock would stand down
from the Board after 17 years with
James Cropper and 9 years as Chief
Financial Officer. The Board is very
grateful for Isabelle’s leadership,
dedication, and significant
contribution. At the same time, it was
announced that Andrew Goody would
be joining the Board as Chief Financial
and Operations Officer later in 2023.
Andy was appointed followed an
extensive search process carried out
by the Committee and supported by
independent recruitment consultants
at 6 Group. Andy ultimately joined the
Board on 27 November 2023, bringing
with him over 20 years’ financial,
commercial, and business
transformation experience.
• In January 2024, James Gravestock stood
down from the Board to pursue
opportunities outside the Company.
James was Managing Director of the
Advanced Materials business, having
held the position since 2021. The Board is
grateful for James’s contribution to the
development of the Advanced Materials
business which enjoyed record
performance in FY23. Following a search
process supported by 6 Group, we were
pleased to confirm that Andy Walton
joined the business as Managing Director
for the Advanced Materials business in
July 2024. Andy joins James Cropper
from Victrex plc, and we very much look
forward to him joining the business to
support our growth plans.
• During the year the Committee
undertook an external search for an
independent Non-Executive Director
and Audit Committee Chair in
succession to Jim Sharp who will stand
down from the Board at the AGM in
September 2024. In July the Company
announced that Jon Yeung will be
appointed to the Board after our
AGM following a process supported
by independent search consultants
at Nurole.
• Finally, in September 2023, following
a search process supported by 6 Group,
the Company appointed Matthew
GOVERNANCE
REPORT OF THE NOMINATION COMMITTEE
72
73
Ratcliffe as General Counsel and
Company Secretary in succession
to Jim Aldridge who left the business
in May 2023.
BOARD APPOINTMENT
PROCESSES
The Committee regularly reviews the
skills, knowledge, experience, and
diversity of the Board to ensure that it
continues to operate effectively and is
suitably balanced against the Company’s
strategic priorities. When considering
succession processes, the Committee
builds upon this assessment to identify
requirements and build a role profile
with the support of external specialist
search consultants. An initial pool of
candidates is typically identified by
search consultants for consideration,
taking into account the requirements
of the role and desire to ensure levels
of diversity. A short list of candidates
is then further assessed subjected to
interviews including with members of
the Board. Following this process, and
the identification of a suitable candidate,
the Committee makes a
recommendation to the Board.
DIVERSITY AND INCLUSION
The Company’s principal concern when
making employment decisions is
ensuring that candidates possess (or
have the potential to develop) the skills,
knowledge and experience required to
meet the requirements of the Company.
All appointments, whether external
recruitments or internal promotions,
are based on merit, and are not
influenced or affected by race, colour,
nationality, religion or belief, gender,
marital status or civil partnership,
family status, pregnancy or maternity,
sexual orientation, gender
reassignment, disability, or age.
The Nomination Committee recognises
that diversity strengthens the Board,
and that it is important to ensure the
Board is not solely comprised of
like-minded individuals with similar
backgrounds. The Board is also
committed to diversity and inclusive
practices which provide equality of
opportunity. It is recognised that
successful delivery of the Company’s
strategy depends on the recruitment
and retention of motivated and skilled
people in an increasingly competitive
labour market, and that steps taken to
improve diversity increase the
attractiveness of the Company and
enhance the available talent pool.
Further work will be carried out in FY25
to support the Company’s policy and
approach to diversity and inclusion
including the development of objectives.
TRAINING
All Directors are committed to ongoing
development and remaining current on
relevant issues in areas such as
governance, industry and market trends,
legal developments, and evolving areas
of risk. The Directors are supported to
undertake professional development
identified as necessary or desirable. An
induction programme is in place for new
Board members including meeting with
Directors and senior managers and
visiting sites.
EFFECTIVENESS REVIEW
The Board undertook an internal
effectiveness review in the year (see the
Corporate Governance Report on page
67 for more information).
DIRECTOR INDEPENDENCE
Details of the independence of Directors
in the Corporate Governance report on
page 66.
THE AGM
In accordance with best practice, at the
forthcoming Annual General Meeting to
take place September 2024, each of Steve
Adams, Patrick Willink, Mark Cropper,
Lyndsey Scott, Sarah Miles, and Martin
Court will stand for re-election to the
Board. Andrew Goody will stand for
election to the Board, having been
appointed in November 2023.
I will be available at the meeting to
respond to any shareholder questions
that might be raised on the Committee’s
activities.
Mark Cropper
Nomination Committee Chair
REPORT OF THE
REMUNERATION COMMITTEE
ANNUAL SUMMARY ON REMUNERATION
I am pleased to present the report of the Remuneration
Committee for the period ended 30 March 2024.
This was a year of much change on the Board which
brought various remuneration considerations, together
with strategic progress being made across the business
despite trading challenges.
Lyndsey Scott, Remuneration Committee Chair
Dear Shareholder
I am pleased to present the Directors’
Remuneration Report for the period
ended 30 March 2024.
This report is designed to enable
shareholders to understand our
remuneration strategy and its alignment
to performance and shareholder
interests. The report is split into
three sections:
1.
This annual summary which
highlights key considerations
for the Committee in the year.
2.
A summary of the Directors’
Remuneration Policy.
3.
The Annual Report on Remuneration,
which explains how the Directors’
Remuneration Policy was applied in
FY24. The Annual Report on
Remuneration will be subject to an
advisory vote at the forthcoming
AGM, at it was at our 2023 AGM
ROLE OF THE COMMITTEE
The primary role of the Remuneration
Committee is to make recommendations
to the Board on the Group’s policy for
Director remuneration. The Committee
also has delegated responsibility for
setting remuneration for the Executive
Directors and Non-Executive Chair and
oversees remuneration arrangements
for senior management.
COMMITTEE MEMBERSHIP
The Remuneration Committee currently
comprises Lyndsey Scott (Chair),
Martin Court, Sarah Miles, and Jim
Sharp. During the period, Mark Cropper
stood down from the Committee.
As was announced in July 2024, Jon
Yeung will join the Board as an
independent Non-Executive Director
and member of the Remuneration
Committee, succeeding Jim Sharp who
will stand down from the Committee
and the Board, following our AGM.
Thereafter, the Committee will be
comprised solely of independent
Non-Executive Directors.
Other Directors (and members of Senior
Management or advisors) may attend
Committee meetings by invitation only.
No person attends any part of a meeting
during which their own remuneration
is discussed. The Non-Executive Chair
and Executive Directors determine
the remuneration of the other Non-
Executive Directors. The Committee
operates under terms of reference which
are published on the Company’s website
at www.jamescropper.com and reviewed
annually.
COMMITTEE
RESPONSIBILITIES
Key responsibilities of the
Committee include:
• Determining and keeping under
review the Directors’ Remuneration
Policy, ensuring that it promotes
delivery of the Board’s strategy, is
consistent with the Company’s
purpose and values, and aligns with
long-term shareholder interests.
• Determining the remuneration
arrangements for each Executive
Director, the Non-Executive Chair
and senior managers, considering
an appropriate balance of fixed,
performance-related, and
long-term structures.
• Monitoring remuneration trends
and wider workforce arrangements.
• Reviewing the design of any share
incentive plans for approval by
the Board.
• Determining targets and outcomes
for performance-related remuneration
schemes, ensuring that discretion is
retained to exercise independent
judgement and avoid inappropriate
formulaic outcomes.
• Engaging with shareholders on
matters within its remit.
MEETINGS IN THE YEAR
• There were 5 scheduled meetings
in FY24. Details of Director attendance
at meetings is shown on page 66.
Unscheduled Committee meetings
also took place in the year, which
largely related to Board succession.
PERFORMANCE AND
REMUNERATION
The Group’s performance in the year is
reflected in the remuneration received
by Executive Directors, based upon
financial and non-financial targets. The
financial and non-financial targets set
by the Committee, together with the
Please note that as an AIM-listed entity, the Group is not required to comply with Schedule 8 of the Large and Medium-sized Companies and Groups (Accounts
and Reports) Regulations 2013 or the principles relating to Directors’ remuneration in the UK Corporate Governance Code. The information contained in this
report is disclosed to fulfil the requirements of AIM Rule 19. The Board recognises the importance of providing shareholders with information with respect to
Director remuneration, and follows the guidance issued by the Quoted Companies Alliance. The information is unaudited except where stated.
01
GOVERNANCE
REPORT OF THE REMUNERATION COMMITTEE
74
75
resulting remuneration payable to the
Executive Directors, are detailed in
the Annual Report on Remuneration
which follows.
As described in the Strategic Report
(on pages 10 to 35) financial performance
in the year was below the Board’s
original expectations.
On 19 April 2023, the Group announced
its strategy for accelerated growth.
This included repositioning its offering
across four segments under the James
Cropper brand, streamlining operations
and reducing its cost base (including
a reduction in the workforce) and
simplifying processes and systems
to realise efficiencies. The Group also
announced the creation of a Centre of
Innovation, designed to ensure that the
Group is best placed to address future
challenges, whether technical,
environmental, or economic.
Despite a strong trading during the first
half, challenges experienced in late 2023
and into 2024 across both divisions
resulted in performance expectations
being significantly revised in January
2024. Full year performance was slightly
ahead of these revised expectations, albeit
below the Board’s original expectations.
In the light of strategic progress
made during the year, the Committee
determined that limited payouts would
be awarded to Executive Directors under
the Annual Incentive to reflect the
achievement of strategic targets. No
payouts were made under the Annual
Incentive in relation to financial targets.
Due to the Group’s performance over
the 3-year performance period, awards
made in FY21 under the Group’s Long-
Term Incentive Plan (LTIP) did not vest.
The Committee is satisfied that the
Remuneration Policy operated as
intended in the year, and that outcomes
were aligned with Group strategy and
shareholder interests.
KEY MATTERS CONSIDERED
IN FY24
BOARD AND COMMITTEE
MEMBERSHIP
On 14 June 2023, it was announced that
Isabelle Maddock would step down from
the Board and as Chief Financial Officer.
Andrew Goody subsequently joined the
Board on 27 November 2023 as Chief
Financial and Operations Officer.
On 31 January 2024 James Gravestock
also stood down from the Board. Details
of Andrew Goody’s remuneration
arrangements, and the arrangements on
departure for each of Isabelle Maddock
and James Gravestock, are set out in the
Annual Report on Remuneration.
Details of changes to membership of the
committee are provided above (page73).
DISCRETIONARY SHARE SCHEMES
During the year, the Committee
undertook a review of the Company’s
discretionary share plans. This resulted
in updates to the James Cropper
Long-Term Incentive Plan: (i) ensuring
the Remuneration Committee retains
broad discretion when determining
outcomes; (ii) enabling the exercise of
malus and clawback where appropriate;
and (ii) providing for post-vesting and
post-employment holding periods. The
Committee also established the James
Cropper Deferred Bonus Share Plan,
which enables the deferral of a
proportion of Executive Director annual
incentives in the form of shares, in
accordance with the Directors’
Remuneration Policy.
DIRECTORS’
REMUNERATION FOR FY25
Inflationary increases of 3.0% were
applied to Executive Director salaries
and Non-Executive fees with effect
from 1 April 2024. This compares
to an inflationary increase of 4.6%
applied to the broader UK workforce
following a collective bargaining
agreement reached across the UK
paper industry.
The Annual Incentive and LTIP will be
operated in a similar way to last year
and in line with the policy table set out
on page 75.
ANNUAL GENERAL MEETING
At the Group’s AGM on 26 September 2023,
the Committee’s Remuneration Report
was approved by shareholders (on an
advisory vote) with 92.9% of votes being
cast in favour. The Committee notes
feedback received prior to that AGM
including a recommendation from proxy
advisors to vote against the remuneration
report due to a severance payment
made in FY23 to the outgoing CEO as
compensation for loss of office. In this
year's report, we have disclosed a payment
being made in FY24 to the outgoing CFO
together with an explanation.
I hope that shareholders will support
the Remuneration Committee’s Report
at the forthcoming Annual General
Meeting. I will be available at the
meeting to respond to any shareholder
questions on the Committee’s activities.
Lyndsey Scott
Remuneration Committee Chair
POLICY SUMMARY TABLE
OVERVIEW OF POLICY
The Directors Remuneration Policy
is designed to:
• Attract and retain individuals with
the talent, experience and leadership
required to fulfil the Board’s strategic
objectives.
• Motivate behaviours designed to meet
strategic objectives, aligned to the
Company’s purpose and values.
• Provide fair and transparent reward
where this is justified and appropriate.
The Remuneration Committee recognises
that a significant proportion of
remuneration should be aligned with
stakeholder interests and encourage long-
term sustainable growth in shareholder
value. With this in mind, remuneration
for Executive Directors comprises:
• Fixed remuneration in the form of
basic salary, benefits, and pension.
• Performance-related remuneration in
the form of an annual incentive and
awards made under the Company’s
Long-Term Incentive Plan. The stretch
element of the annual incentive is also
deferred in the form of shares under the
Company’s Deferred Bonus Share Plan.
Targets under performance-related
remuneration are fixed by the Committee
which retains discretion to ensure that
outcomes remain appropriate.
REMUNERATION ELEMENT
AND LINK TO STRATEGY
OPERATION AND PERFORMANCE METRICS
OPPORTUNITY
Base Salary: To reflect market
value of the role and
individual’s performance and
contribution and enable the
Group to recruit and retain
Directors of sufficient calibre
required to support
achievement of both short and
long-term goals.
• The salary of each Executive Director will be reviewed annually by the
Remuneration Committee without any obligation to increase such salary.
• Base salaries are benchmarked against companies of a comparable size with
a targeted approach of median positioning against the market, subject to
satisfactory performance.
• There may be reviews and changes to base salary during the year
if considered appropriate by the Remuneration Committee.
There is no prescribed
maximum annual base
salary or salary increase.
Benefits allowance: To attract
and retain the right individuals
and level of talent required to
support achievement of both
short and long-term goals.
• Each Executive Director is awarded a benefit allowance which allows individuals
to select from a range of personal benefits including, but not limited to, private
medical insurance and a company car.
• Any unused monetary sum is paid to the individual at the end of the tax
year via the PAYE system.
• The benefit allowance is reviewed periodically by the Remuneration Committee.
No prescribed maximum value.
Pension: To attract and retain
the right individuals and level
of talent required to support
achievement of both short- and
long-term goals.
• Executive Directors are members of either the Company’s defined contribution
scheme or the Company’s defined benefit scheme or receive
a pension allowance.
Director pension arrangements
align with the pension
arrangements for the general
workforce, depending on the
scheme they are a member of.
Annual Incentive Plan:
To reward the delivery of the
Group’s annual financial and
strategic goals. To align the
interests of the Executives and
shareholders in the short and
medium term.
• The Annual Incentive is earned on the achievement of performance targets
ordinarily set by the Committee at the start of each financial year.
• The Annual Incentive incorporates financial and non-financial performance
measures. Financial performance measures include a basic target and a stretch
target.
• Payments for performance up to the stretch target are made in cash.
• Payments for performance exceeding the stretch target are deferred for three
years and made in the form of shares via the Group’s Deferred Bonus Share Plan.
• Awards which vest to Executive Directors are subject to a post-vesting holding
period of two years.
The target for all Executive
Directors is 25% of base salary.
Under the stretch opportunity,
the CEO may receive up to a further
25% of salary (taking the maximum
opportunity to 50% of salary) and
other Executive Directors may
receive up to a further 15% of salary
(taking the maximum opportunity
to 40% of salary).
Long Term Incentive Plan
(LTIP): To incentivise the
delivery of key performance
measures over the long term.
To retain key Executives
and increase their share
ownership in the Company,
aligning their interests with
those of shareholders.
• Under the LTIP, nil cost options to acquire ordinary shares in the Company (or to
receive cash of equivalent value) can be awarded to Executive Directors and other
employees within the Group, at the discretion of the Committee.
• The vesting of awards is subject to performance conditions measured
over a period of three financial years.
• Awards which vest to Executive Directors are subject to a post-vesting holding
period of two years.
75% of salary for the CEO
and 50% of salary for other
Executive Directors.
Shareholding Guideline:
Alignment of the Executive
Directors’ interests with those
of the Group’s shareholders.
Operation
• Requirement to purchase a minimum of 500 Company shares upon joining the
Company and to be retained during service.
Not applicable.
Non-Executive Director
Remuneration: To attract and
retain the right individuals
required to support the
achievement of the Company’s
strategic goals.
Operation
• Remuneration comprises a single base fee for services to the Company.
Non-Executive Directors are entitled to reimbursement of reasonable expenses.
• Non-Executive Director remuneration reflects the time commitment and
responsibility of their roles; consideration of increases made elsewhere in the
Group; market rates; and that Non-Executives do not particulate in performance-
related, pension, or share-based schemes.
Fees are reviewed annually by
the Executive Directors and
Non-Executive Chair. Under the
Company’s Articles of association,
the maximum aggregate amount
that can be paid to all Non-Executive
Directors for their services is
£400,000 per annum (or such
other amount approved by
ordinary resolution).
02 SUMMARY OF THE DIRECTORS
REMUNERATION POLICY
SERVICE CONTRACTS
The Non-Executive Chair has a notice
period of 12 months. Other Non-
Executive Directors are engaged on
terms requiring one months’ notice of
termination to be given by either party.
MALUS AND CLAWBACK
Performance related remuneration is
subject to malus and clawback in certain
circumstances including material financial
misstatement, reputational damage, gross
misconduct, fraud, error in the assessment
of performance measures and corporate
failure. Malus and clawback apply during
the following periods:
• Annual incentive payments (both cash
payments and deferred share
payments) are subject to malus and
clawback during the period ending on
the third anniversary of payment being
made of the cash element.
• LTIP awards are subject to malus and
clawback during the period ending on
the third anniversary of the vesting date.
DIRECTOR
NOTICE PERIOD
S Adams
6 months
A Goody
6 months
P Willink
12 months
GOVERNANCE
REPORT OF THE REMUNERATION COMMITTEE
76
77
CASH AWARDS
Conditional cash awards (“Cash Awards”) grant participating employees a conditional right to be paid a cash amount based upon the
market value of a specified number of Ordinary Shares following vesting. Cash Awards outstanding and made during the year under
the LTIP were in accordance with the table below (which describes awards made to members of the Concert Party – see page 79 for
more information).
AWARDS UNDER THE LTIP IN FY24
Share and cash awards detailed above were made on 19 December 2023, with share awards made as nil cost options, subject
to the performance conditions covering the three financial years ending 31 March 2026. Performance targets were set against
the following measures:
Each performance measure is structured with a threshold target (resulting in 10% vesting) and a maximum target (resulting in 100%
vesting). Vesting is adjusted on a straight-line basis between threshold and maximum targets. Awards will lapse to the extent that
performance is below the threshold target for each performance measure.
The adjusted EPS performance targets were set from a base adjusted EPS of 25.1 pence as follows:
AWARDS UNDER THE LTIP IN FY21
Due to the Group’s performance over the 3-year performance period, awards made in FY21 under the Group’s LTIP did not vest.
DIRECTORS’ INTERESTS
*Non-beneficial holdings include shares held jointly as trustee with other Directors.
**Cash Awards
ADVISORS TO THE COMMITTEE
In FY24, the Committee engaged the services of H2Glenfern Remuneration Advisory in connection with the preparation of the
Remuneration Report and Pinsent Masons LLP in connection with the review of discretionary share schemes.
This part of the Directors’ Remuneration Report outlines the key considerations of the Committee during the year and sets out
a summary of how the Directors’ Remuneration Policy was applied during FY24.
DETAILS OF DIRECTORS’ REMUNERATION
03 ANNUAL REPORT ON REMUNERATION 2024
£’000
SALARY
AND FEES
BENEFITS
ANNUAL
INCENTIVE
LTIP
PENSION
TOTAL
EXECUTIVE
2024
2023
2024
2023
2024
2023
2024
2023
2024
2023
2024
2023
S ADAMS
234
2081
28
26
6
10
-
-
14
12
282
256
A GOODY2
62
-
8
-
3
-
-
-
3
-
73
-
P WILLINK
168
162
24
23
6
12
-
-
03
04
198
197
I MADDOCK5
37
174
1
23
-
-
-
-
2
10
40
207
J GRAVESTOCK6
151
174
20
23
-
29
-
-
6
7
177
233
NON-EXECUTIVE
2024
2023
2024
2023
2024
2023
2024
2023
2024
2023
2024
2023
M CROPPER
130
130
-
-
-
-
-
-
-
-
130
130
M COURT
37
37
-
-
-
-
-
-
-
-
37
37
L SCOTT
37
37
-
-
-
-
-
-
-
-
37
37
S MILES
37
37
-
-
-
-
-
-
-
-
37
37
J SHARP
37
37
-
-
-
-
-
-
-
-
37
37
1 Reflecting that the annual salary payable to Steve Adams was increased from £167,000 to £233,550 upon his appointment as CEO on 10 August 2022.
2 Reflective of the period from 27 November 2023 (the date A Goody was appointed to the Board) to 30 March 2024.
3 P Willink accrues defined benefit pension entitlements based upon a pensionable salary.
4 P Willink accrues defined benefit pension entitlements based upon a pensionable salary.
5 I Maddock stepped down from the Board on 14 June 2023. In addition to the payments specified in the table, I Maddock received £95k by way of payment in lieu of contractual
notice and benefits and £106k by way of compensation for loss of office. No payment was made to I Maddock under the Annual Incentive, and all unvested awards made under
the LTIP lapsed.
6 J Gravestock stepped down from the Board on 31 January 2024. No payment was made to J Gravestock under the Annual Incentive, and all unvested awards made under the
LTIP lapsed.
£’000
OPTIONS AT 1
APRIL 2023
OPTIONS
AWARDED IN
PERIOD
MID-MARKET PRICE
(£) AT DATE OF
AWARD
OPTIONS
EXERCISED
IN PERIOD
OPTIONS
LAPSED
IN PERIOD
OPTIONS AT
30 MARCH
2024
S ADAMS
19,752
27,110
6.46
-
6,112
40,750
A GOODY
-
13,977
6.46
-
-
13,977
I MADDOCK
14,502
-
-
-
14,502
-
J GRAVESTOCK
8,390
-
-
-
8.390
-
£’000
OPTIONS AT 1
APRIL 2023
OPTIONS
AWARDED IN
PERIOD
MID-MARKET PRICE
(£) OF OPTIONS
AWARDED
OPTIONS
EXERCISED
IN PERIOD
OPTIONS
LAPSED
IN PERIOD
OPTIONS AT
30 MARCH
2024
P WILLINK
13,525
13,037
6.46
-
5,700
20,082
M CROPPER
2,940
-
-
-
2,940
-
THRESHOLD
MAXIMUM
TARGET
COMPOUND ANNUAL GROWTH IN
ADJUSTED EPS OF 35%
COMPOUND ANNUAL GROWTH IN
ADJUSTED EPS OF 70%
VESTING
10%
100%
PERFORMANCE MEASURE
WEIGHTING
GROWTH IN ADJUSTED EARNINGS PER SHARE ("EPS”)
40%
CUMULATIVE OPERATING CASH FLOW
30%
REDUCTION IN CARBON EMISSIONS INTENSITY RATIO
30%
ANNUAL INCENTIVE
The annual incentive is calculated using a combination of stretching but realistic financial and non-financial targets which are set
by the Committee considering performance expectations, historic performance, market outlook and strategy.
For FY24, 80% of the annual incentive for Executive Directors was determined by financial performance both at a Group and divisional
level. The remaining 20% was determined by the achievement of key individual strategic objectives.
For the year ended 30 March 2024, the financial targets set by the Committee for Executive Directors were not met. Recognising
however that non-financial objectives set by the Committee were delivered in the year, and the robust response of the business to
challenges experienced in the second half of the financial year, the Committee determined it to be appropriate to award modest annual
incentive payments to the Executive Directors. Details of the payments made to Executive Directors are provided in the table above.
LONG-TERM INCENTIVE PLAN
Share awards outstanding and made during the financial period to 30 March 2024 under the James Cropper plc Long-Term Incentive
Plan (LTIP) to Executive Directors were as follows:
DIRECTOR
SHAREHOLDING
UNVESTED LTIP
AWARDS
UNVESTED DBSP
AWARDS
BENEFICIAL
NON-BENEFICIAL*
MARK CROPPER
1,927,254
559,571
0
0
STEVE ADAMS
1,099
0
40,750
0
ANDREW GOODY
1,564
0
13,997
0
PATRICK WILLINK
61,705
108,058
20,082**
0
JIM SHARP
11,380
81,751
0
0
LYNDSEY SCOTT
500
81,571
0
0
SARAH MILES
500
81,571
0
0
MARTIN COURT
500
81,571
0
0
GOVERNANCE
REPORT OF THE REMUNERATION COMMITTEE
78
79
DIRECTORS' REPORT
The Directors present their Annual
Report and the audited financial
statements of James Cropper Group for
the financial year ended 30 March 2024.
PRINCIPAL ACTIVITIES
The principal activity of the Group
comprises the manufacture of advanced
materials and specialist papers and
packaging products. There have not
been any significant changes in the
Group’s principal activities in the year
under review.
The Directors are not aware, at the date of
this report, of any likely major changes in
the Group’s activities in the next year.
REVIEW OF BUSINESS AND
FUTURE DEVELOPMENTS
The Strategic Report on pages 2 to 60
reports on the performance of the
Group for the period ended 30 March
2024 and its prospects for the future.
The Strategic Report has been prepared
to provide information to shareholders
on the performance of the Group and to
assess the Group’s strategies and the
potential for those strategies to succeed.
These statements are made by the
Directors in good faith based on the
information available to them up to the
time of their approval of this report and
such statements should be treated with
caution due to the inherent uncertainties,
including both economic and business
risk factors, underlying any such
forward looking information.
THE BOARD
The Directors who served during the
year under review were:
• Mark Cropper (Non-Executive Chair)
• Steve Adams (Chief Executive Officer)
• Andrew Goody (Chief Financial
and Operations Officer) (appointed
27 November 2023)
• Patrick Willink
(Chief Innovation Officer)
• Martin Court (Senior Independent
Director)
• Sarah Miles (Non-Executive Director)
• Lyndsey Scott (Non-Executive Director)
• Jim Sharp (Non-Executive Director)
• Isabelle Maddock (stood down
14 June 2023)
• James Gravestock (stood down
31 January 2024)
The biographies of the Directors as
at the date of this report are on pages
62 to 63.
As announced in July 2024, Jon Yeung
will join the Board as a Non-Executive
Director and Audit Committee Chair
following the AGM in September 2024.
Jim Sharp will stand down from the
Board at the AGM.
Details of the Directors’ remuneration are
shown in the Remuneration Committee
Report on pages 73 to 77. Details of the
Directors’ interests in the share capital
of the Company are set out below.
RESULTS AND DIVIDENDS
The results for the period are shown in
the Statement of Comprehensive Income
on page 89.
An interim dividend of 3.0p per ordinary
share was paid on 8 January 2024.
The Directors are not recommending
the payment of a final dividend in
respect of the financial year ended 30
March 2024. The total dividend for the
year will therefore remain at 3.0p per
ordinary share.
Full details of dividends in respect of the
year ended 30 March 2024 are given in
note 7 of the financial statements.
CORPORATE GOVERNANCE
A report on Corporate Governance is set
out on pages 64 to 68, and forms part of
this report by reference.
HEALTH & SAFETY
The Group is committed to providing a
safe working environment for all
employees. Group policies are reviewed
regularly to ensure that policies relating
to training, risk assessment and accident
management are appropriate.
Health & Safety issues are reported and
discussed as a high agenda item at every
Board and Executive Committee meeting.
CHARITABLE AND
POLITICAL DONATIONS
It is the Group’s policy not to make any
donations to, or incur expenditure on
behalf of political parties, other political
organisations or independent election
candidates and the Board does not
intend to change this policy.
Donations totalling £10,529 (2023:
£6,327) were during the year made for
various charitable purposes.
ENGAGEMENT WITH
KEY STAKEHOLDERS
In accordance with the Large and Medium-
sized Companies and Groups (Accounts and
Reports) Regulations 2008 (as amended by
the Companies (Miscellaneous Reporting)
Regulations 2018), the Company’s statement
on engagement with, and having due regard
to, the interests of key stakeholders is
contained within the Section 172(1)
statement in the Strategic Report on pages
44 to 45 (also known as the Section 172
statement).
The section 172 statement also
summarises how the Directors have had
regard to the need to foster the Group’s
business relationships.
EMPLOYEE ENGAGEMENT,
DIVERSITY AND INCLUSION
The Group’s employees are its most
important asset. The Group operates an
equal opportunities policy that aims to
treat individuals fairly and not to
discriminate in any way.
For information on how Directors
engage with and have regard to
employee interests, and on our approach
to diversity and inclusion, please see
the S.172 statement on pages 44-45 and
our People Report on page 55.
ENVIRONMENTAL POLICY
James Cropper Group recognises the
importance of its environmental
responsibilities and designs and
implements policies to reduce any
damage that might be caused by the
Group’s activities.
Initiatives designed to minimise the
Group’s impact on the environment
include the safe disposal of waste,
recycling and the use of recycled
materials, reducing energy consumption
and transitioning from the use from
fossil fuels to green electricity sources.
Further details can be found in the ESG
report on pages 48-56.
FINANCIAL INSTRUMENTS
Disclosure around financial risks,
financial instruments and hedging is
included in note 20 to the annual
financial statements.
RESEARCH AND
DEVELOPMENT
The Group invests in research projects
and the development of new technology.
Research and development expenditure and
the related tax credits are disclosed in note 4
to the annual financial statements.
SHARE CAPITAL
Full details of the issued share capital
of the Company are set out in note 23
to the consolidated financial statements.
The holders of ordinary shares are
entitled to one vote per share at the
Company’s general meetings.
AUTHORITY TO
ALLOT SHARES
A resolution will be proposed to renew
an existing authority which expires at
the Annual General Meeting to give the
Directors authority to exercise the powers
of the Company to allot unissued shares.
DIRECTORS POWER
TO DISAPPLY
PRE-EMPTION RIGHTS
A resolution will be proposed at the Annual
General Meeting which disapplies statutory
pre-emption rights on the allotment of
shares by empowering the Directors to allot
shares for cash without offering them to
existing shareholders first.
GOING CONCERN
The consolidated financial statements
have been prepared on a going concern
basis under the historical cost convention
except for the revaluation of certain
financial instruments to fair value.
The accounting policy relating to going
concern is set out in note 1 to the financial
statements.
Based on the evaluation set out in note 1
the Directors consider that the Group
and company will have sufficient funds
to continue to meet their liabilities as
they fall due for at least 12 months from
the date of approval of the financial
statements. Therefore the Directors have
adopted the going concern basis in
preparing the financial statements.
DISCLOSURE OF
INFORMATION TO
THE AUDITOR
Grant Thornton UK LLP has expressed
its willingness to continue in office.
Its appointment and authority for the
Directors to agree its remuneration
will be proposed at the Annual
General Meeting.
Each of the Directors as at the date
of approval of this Annual Report
confirms that:
• So far as the Director is aware there is
no relevant audit information of which
the Company’s Auditor is unaware; and
• The Director has taken all steps he/she
ought to have taken as a Director in
order to make himself/herself aware
of any relevant audit information and
to establish that the Company’s
Auditor is aware of that information.
ANNUAL GENERAL MEETING
Notice of Annual General Meeting, which
sets out the resolutions to be proposed at
the forthcoming Annual General Meeting
will be posted to shareholders at 21 clear
days before the date of the AGM.
The meeting will be held at The Bryce
Institute, Burneside, Kendal, Cumbria,
LA9 6QZ on 4 September 2024.
SUBSTANTIAL INTERESTS
(INCLUDING CONCERT
PARTY)
Shareholdings in excess of 3% of
the Company’s issued share capital
at 28 June 2024 were as set out
in the table below.
DETAILS OF
DIRECTORS’ INTERESTS
Information on the interests of Directors
(serving at the date of this report) in the
share capital of the Company, and over
options over ordinary shares in the
Company, are detailed in the
Remuneration Committee Report on
page 77.
Any material related party transactions
between the Directors and the Company
are set out in note 28 to the consolidated
financial statements.
Non-beneficial interests include shares
held jointly as trustee with other
Directors.
The Company has purchased and
maintained throughout the period
Directors’ and officers’ liability insurance
in respect of the Directors.
Approved by the Board of Directors
on 22 July 2024.
Matthew Ratcliffe
General Counsel and Company Secretary
SHAREHOLDER
NUMBER OF SHARES
% OF ISSUED SHARE CAPITAL
CROPPER FAMILY*
(BENEFICIAL AND NON-BENEFICIAL HOLDINGS)
3,117,971
32.63
WILLINK FAMILY*
(BENEFICIAL AND NON-BENEFICIAL HOLDINGS)
456,357
4.78
ACLAND FAMILY*
(BENEFICIAL HOLDINGS)
52,386
0.55
TOTAL CONCERT PARTY*
37.96
LIONTRUST ASSET MANAGEMENT LIMITED
1,263,179
13.22
GOVERNANCE
DIRECTORS REPORT
*The Cropper, Willink and Acland families are related and are deemed to be acting in concert with the total holding of 37.96% in the Company.
80
81
The directors are responsible for
preparing the Annual Report and the
financial statements in accordance
with applicable law and regulations.
Company law requires the directors
to prepare financial statements for
each financial year. Under that law the
directors have to prepare the financial
statements in accordance with
UK-adopted international
accounting standards.
Under company law the directors must
not approve the financial statements
unless they are satisfied that they give
a true and fair view of the state of affairs
and profit or loss of the company and
group for that period. In preparing these
financial statements, the directors are
required to:
• select suitable accounting policies
and then apply them consistently;
• make judgements and accounting
estimates that are reasonable and
prudent;
• state whether applicable UK-adopted
international accounting standards
have been followed, subject to any
material departures disclosed and
explained in the financial statements;
and
• prepare the financial statements on
the going concern basis unless it is
inappropriate to presume that the
company will continue in business.
The directors are responsible for
keeping adequate accounting records
that are sufficient to show and explain
the company’s transactions and disclose
with reasonable accuracy at any time the
financial position of the company and
enable them to ensure that the financial
statements comply with the Companies
Act 2006.
They are also responsible for
safeguarding the assets of the company
and hence for taking reasonable steps
for the prevention and detection of fraud
and other irregularities. The directors
confirm that:
• so far as each director is aware, there is
no relevant audit information of which
the company’s auditor is unaware; and
• the directors have taken all the steps
that they ought to have taken as
directors in order to make themselves
aware of any relevant audit
information and to establish that
the company’s auditor is aware
of that information.
To the best of our knowledge:
• the group financial statements,
prepared in accordance with
UK-adopted international accounting
standards, give a true and fair view of
the assets, liabilities, financial position
and profit or loss of the company and
the undertakings included in the
consolidation taken as a whole; and
• the Strategic Report and Directors’
Report include a fair review of the
development and performance of
the business and the position of the
company and the undertakings
included in the consolidation taken
as a whole, together with a description
of the principal risks and uncertainties
that they face.
Approved by the Board of Directors on
22 July 2024 and signed on its behalf by
Matthew Ratcliffe
General Counsel and Company Secretary
STATEMENT OF
DIRECTORS'
RESPONSIBILITIES
CONTENTS
GOVERNANCE
STRATEGIC REPORT
06
Financial Highlights
06
Commercial Highlights
07
Chair’s Letter
10
Positioned for Growth
12
Our Accelerated Growth Strategy
13
Market Trends
14
Chief Executive's Review
18
Advanced Materials in Focus
22
Paper and Packaging in Focus
26
Chief Financial Officer's Review
30
The Pension Report
36
Risk Management
39
S.172: Promoting the Success of our Group
44
ESG Report
48
Our People
54
Safety
56
TCFD Disclosures
57
GOVERNANCE
62
Board of Directors
62
Corporate Governance Statement
64
Compliance with the QCA Code
68
Report of the Audit Committee
69
Report of the Nominations Committee
71
Report of the Remuneration Committee
73
Directors’ Report
78
Statement of Directors’ Responsibilities
80
FINANCIAL STATEMENTS
82
Group Independent Auditor’s Report
82
Group Statement of Comprehensive Income
89
Statement of Financial Position
90
Statement of Cash Flows
91
Statement of Changes In Equity
92
Notes to the Financial Statements
93
Shareholder Information
132
82
83
OVERALL MATERIALITY:
Group: £802,000, which represents
approximately 0.75% of the Group’s
revenue.
Parent company: £480,000, which
represents 1% of the parent company’s
total assets.
KEY AUDIT MATTERS
WERE IDENTIFIED AS:
• Valuation of pension benefit obligation
(same as previous period)
• Impairment of fixed assets in the
Paper and Packaging CGU (new in
the current period); and
• Valuation of investments in
subsidiaries and intra-group
loans (new in the current period).
Scoping has been determined to ensure
appropriate coverage of the significant
risks as well as coverage of the key
results in the financial statements and
specifically we performed the following
audit work:
• Group revenue: 79%
• Group total assets: 76%
We performed an audit of the financial
information of two components using
component materiality (full-scope audit),
an audit of one or more account balances,
classes of transactions or disclosures of
the component (specific scope audit) for
two components assessed to be material
and specified audit procedures on one
component.
We performed analytical procedures at
Group level on the financial information
of all the remaining eleven components.
FINANCIAL STATEMENTS
GROUP INDEPENDENT AUDITOR'S REPORT
INDEPENDENT AUDITOR’S
REPORT TO THE MEMBERS
OF JAMES CROPPER PUBLIC
LIMITED COMPANY
BASIS FOR OPINION
We conducted our audit in accordance
with International Standards on Auditing
(UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards
are further described in the ‘Auditor’s
responsibilities for the audit of the
financial statements’ section of our
report. We are independent of the Group
and the parent company in accordance
with the ethical requirements that are
relevant to our audit of the financial
statements in the UK, including the FRC’s
Ethical Standard as applied to listed
entities, and we have fulfilled our other
ethical responsibilities in accordance
with these requirements. We believe that
the audit evidence we have obtained is
sufficient and appropriate to provide a
basis for our opinion.
CONCLUSIONS RELATING
TO GOING CONCERN
We are responsible for concluding on the
appropriateness of the directors’ use of
the going concern basis of accounting
and, based on the audit evidence
obtained, whether a material uncertainty
exists related to events or conditions that
may cast significant doubt on the Group’s
and the parent company’s ability to
continue as a going concern. If we
conclude that a material uncertainty
exists, we are required to draw attention
in our report to the related disclosures in
the financial statements or, if such
disclosures are inadequate, to modify the
auditor’s opinion. Our conclusions are
based on the audit evidence obtained up
to the date of our report. However, future
events or conditions may cause the
Group or the parent company to cease to
continue as a going concern.
Our evaluation of the directors’
assessment of the Group’s and the parent
company’s ability to continue to adopt
the going concern basis of accounting
included:
• Performing procedures on the
directors’ going concern assessment
for a period of at least 12 months
from the date the financial statements
are approved. This included challenge
of management’s forecasts and
supporting Board paper;
• Assessing the funding agreements
in place to ensure sufficient funding
availability within the going concern
assessment period;
• Reviewing subsequent events
following the year end in order to
establish any areas that could affect
the group’s and parent company’s
ability to report as a going concern;
including a review of the board
minutes in relation to the strategic
business plans.
• Obtaining post year end results
achieved and compared to the going
concern forecast to determine
whether the business is trading in line
with forecast;
• We have evaluated management’s
reverse stress test over the forecast
period, considering the impact of
changing key assumptions and
understanding how these could break
the forecast to assess the likelihood
of such a situation occurring and
assessed the likelihood of the
downside scenario;
• Sensitising revenue and EBITDA
to account for each assessment
scenario performed by management,
including assessing the impact on cash
flow and covenants;
• Corroborating the existence of the
Group’s loan facilities and related
covenant requirements, including
confirming the reset of covenants,
for the period covered by
management’s forecasts. We analysed
and considered the level of headroom
on covenants throughout the going
concern period;
• Analysing the movement in net debt
and assumptions in respect of working
capital; and
• Assessing the adequacy of the going
concern disclosures included within
the financial statements.
In our evaluation of the directors’
conclusions, we considered the inherent
risks associated with the Group’s and the
parent company’s business model
including effects arising from macro-
economic uncertainties such as
inflationary pressures, we assessed
and challenged the reasonableness of
estimates made by the directors and the
related disclosures and analysed how
those risks might affect the Group’s and
the parent company’s financial resources
or ability to continue operations over the
going concern period.
In auditing the financial statements,
we have concluded that the directors’
use of the going concern basis of
accounting in the preparation of the
financial statements is appropriate.
Based on the work we have performed,
we have not identified any material
uncertainties relating to events or
conditions that, individually or
collectively, may cast significant doubt
on the Group’s and the parent company’s
ability to continue as a going concern for
a period of at least twelve months from
when the financial statements are
authorised for issue.
Our responsibilities and the
responsibilities of the directors with
respect to going concern are described
in the relevant sections of this report.
OPINION
OUR OPINION ON THE FINANCIAL
STATEMENTS IS UNMODIFIED
We have audited the financial statements
of James Cropper Public Limited Company
(the ‘parent company’) and its subsidiaries
(the ‘Group’) for the 52 week period ended
30 March 2024, which comprise the Group
Statement of Comprehensive Income,
the Statement of Financial Position, the
Statement of Cash Flows, the Group
Statement of Changes in equity, the
Company Statement of Changes in Equity
and notes to the financial statements,
including a summary of significant
accounting policies. The financial
reporting framework that has been
applied in the preparation of the Group
financial statements is applicable law
and UK-adopted international accounting
standards. The financial reporting
framework that has been applied in the
preparation of the parent company
financial statements is applicable law and
United Kingdom Accounting Standards,
including Financial Reporting Standard
101 ‘Reduced Disclosure Framework’
(United Kingdom Generally Accepted
Accounting Practice).
IN OUR OPINION:
• the financial statements give a true and
fair view of the state of the Group’s and
of the parent company’s affairs as at 30
March 2024 and of the Group’s loss for
the period then ended;
• the Group financial statements have
been properly prepared in accordance
with UK-adopted international
accounting standards;
• the parent company financial
statements have been properly
prepared in accordance with United
Kingdom Generally Accepted
Accounting Practice; and
• the financial statements have been
prepared in accordance with the
requirements of the Companies
Act 2006.
KEY AUDIT
MATTERS
DESCRIPTION
AUDIT RESPONSE
DISCLOSURES
KEY OBSERVATIONS
OUR APPROACH TO THE AUDIT
Key audit matters are those matters that,
in our professional judgement, were
of most significance in our audit of
the financial statements of the current
period and include the most significant
assessed risks of material misstatement
(whether or not due to fraud) that we
identified. These matters included those
that had the greatest effect on: the
overall audit strategy; the allocation of
resources in the audit; and directing the
efforts of the engagement team. These
matters were addressed in the context of
our audit of the financial statements as a
whole, and in forming our opinion
thereon, and we do not provide a
separate opinion on these matters.
KEY AUDIT MATTERS
MATERIALITY
KEY AUDIT
MATTERS
SCOPING
In the previous year, we performed
full-scope audits on two components,
specific-scope audits on six components
and analytical procedures on eight
components. The change in scoping is as
a result of changes in the relative
contribution of the components in scope.
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85
HIGH
LOW
HIGH
LOW
Extent of management judgement
Potential financial statement impact
Going concern
Valuation of pension
benefit obligation
Valuation of investment in
subsidaries and intra-group
loans (parent company)
Impairment of Fixed Assets in
the Paper and Packaging CGU
Management override
of controls
Revenue cycle including
fraudulent transactions
(Occurence for outliers
in the revenue cycle)
FINANCIAL STATEMENTS
GROUP INDEPENDENT AUDITOR'S REPORT
Key audit matter
Significant risk
HOW OUR SCOPE ADDRESSED
THE MATTER
In responding to the key audit matter,
we performed the following audit
procedures:
• Assessed and challenged
management’s identification of CGUs
in accordance with the requirements
of IAS 36;
• Assessed and challenged
management's short, medium and
long-term revenue growth rates used
in the forecast, including comparison
to economic and industry forecasts,
where appropriate;
• Assessed and challenged
management's impairment review,
including determining whether
appropriate costs are included, and
that these costs appropriately factor
in the current economic climate, and
corroborated medium and long-term
VALUATION OF PENSION
BENEFIT OBLIGATION
We assessed the pension benefit
obligation valuation within the financial
statements as one of the most significant
assessed risks of material misstatement
due to error.
The Group has two funded pension
schemes providing defined benefits for
a number of its employees; the James
Cropper PLC Pension Scheme (‘Staff
Scheme’) and the James Cropper PLC
Works Pension Plan (‘Works Scheme’).
As at 30 March 2024, the net pension
obligation amounts to £17.3m (2023:
£16.1m), the loss recognised in other
comprehensive income amounts to
£1.8m (2023: £3.9m), the fair value of the
plan assets is £69.7m (2023: £73.2m), and
the present value of the defined benefit
obligation is £87.0m (2023: £89.3m).
The valuation of the obligation is
dependent on the underlying
assumptions and inputs made from the
actuary, as well as movements within
market conditions, specifically being the
discount rate, inflation expectations and
life expectancy assumptions.
The inputs surrounding these
assumptions are considered to be
complex, and as such, require significant
management judgement to be made, with
the support of third-party actuaries.
A minor change within any of the
underlying assumptions and estimates
used to calculate the Group’s pension
obligation could have a significant
impact on the Group’s net pension deficit.
HOW OUR SCOPE ADDRESSED
THE MATTER
In responding to the key audit matter, we
increases to relevant evidence,
such as external market data;
• Utilised valuation experts to
independently determine a weighted
average cost of capital, to assess
whether the weighted average cost of
capital (WACC) used by management,
as determined by their expert, is
appropriate;
• Evaluated historical forecasting
accuracy by comparing results
achieved in prior years to budgets;
• Performed sensitivity analysis on the
key assumptions, including the
forecasted cash flows, the long-term
growth rates and discount rates and
assessing the impact on the carrying
value of fixed assets; and
• Assessed whether the disclosures
regarding impairment within the
financial statements are appropriate.
performed the following audit
procedures for both schemes:
• Assessed the competence, capabilities
and objectivity of the pension scheme
actuary and the completeness and
reliability of the data provided;
• Obtained and analysed the pension
report directly from the actuary and
compared the report disclosures to
those in the financial statements;
• Considered the nature and scope of
the work of the actuary and the
appropriateness of the assumptions
used in the calculation of the estimate;
• Engaged our internal actuarial
expert to assess the reasonableness
of assumptions made in relation
to the schemes focussing primarily
on the discount rate, inflation, and
mortality assumptions;
• Tested the movement in the member
data by agreeing to information
provided by the scheme administrator,
to ensure that there have not been any
material or abnormal movements in
the membership profile; and
• Assessed the completeness and
accuracy of the disclosures included
within the financial statements.
RELEVANT DISCLOSURES IN THE
ANNUAL REPORT
• Financial statements; Use of Estimates
and Judgements; Retirement benefits
• Financial statements; Note 21;
Retirement benefits
KEY OBSERVATIONS
Based on our audit work, we determined
the valuation methodologies and the
actuarial assumptions inherent within
RELEVANT DISCLOSURES IN THE
ANNUAL REPORT
• Financial statements; Use of Estimates
and Judgements; Impairment
• Financial statements; Note 10;
Property, Plant and Equipment
KEY OBSERVATIONS
From the work performed, our challenge
of management regarding the cash flows
and growth rates included in the
impairment model resulted in a £4.4m
change in the impairment charge
recorded.
Following the recording of the
impairment charge, we did not identify
further material misstatements in the
valuation of the fixed assets related to
the Paper and Packaging CGU.
them to be balanced and consistent with
the expectation of our actuarial expert.
We consider that the group's disclosures
within Note 20 appropriately describe
the significant degree of inherent
precision in the assumptions and
estimates and the potential impact on
future periods of revisions to these
estimates. No material misstatements
were identified within the calculation.
IMPAIRMENT OF FIXED
ASSETS IN THE PAPER
AND PACKAGING CGU
We identified the impairment of fixed
assets within the Paper and Packaging
CGU as one of the most significant
assessed risks of material misstatement
due to error.
The carrying value of the paper and
packaging division’s fixed assets at 30
March 2024 was £12.3m after an
impairment charge of £4.4m. Based on
the current trading of the Paper and
Packaging CGU, we have identified a
significant risk in relation to the
impairment of fixed assets in the Paper
and Packaging CGU due to performance
being lower than forecasted, resulting in
a lower headroom in the current year
than expected.
There are key judgements made by
management in assessing the recoverable
amount when assessing non-current
assess for impairment, including revenue
growth and discount rates applied in the
discounted cash flow calculations,
as well as the identification of CGUs.
We recognise that these judgements are
subject to management bias and error
and can also significantly impact the
results of the impairment assessment.
KEY AUDIT MATTERS – GROUP
KEY AUDIT MATTERS – PARENT COMPANY
VALUATION OF
INVESTMENTS IN
SUBSIDIARIES AND
INTRA-GROUP LOANS
We identified the valuation of
investments in subsidiaries and the
intra-group loans as one of the most
significant assessed risks of material
misstatement due to error.
There is an increased risk that the
valuation of investments in subsidiaries
are impaired as per International
Accounting Standards (‘IAS’) 36
‘Impairment of Assets’ because of the
high level of estimation uncertainty in
management’s assessment of the future
performance of the Group and in
determining appropriate operating cash
flows, long-term growth rates and
discount rate to apply in calculating the
recoverable amounts of the investments
and intra-group loans.
Similarly, we note that there is also an
increased risk surrounding the
recoverability of intra-group loans as per
International Financial Reporting
Standards (‘IFRS’) 9 ‘Financial
Instruments’ due to the reasons noted
above regarding estimation uncertainty
of the Group’s future performance.
We have pinpointed this significant risk
to the investments in and intra-group
loans from James Cropper Speciality
Paper and James Cropper 3D Products
(Colourform). This is on the basis that
actual performance has been below
budget in the current financial year for
these companies.
HOW OUR SCOPE ADDRESSED
THE MATTER
In responding to the key audit matter, we
performed the following audit
procedures:
• Obtained and evaluated management’s
assessment of whether there are
indicators of impairment in the
investments held to assess compliance
with IAS 36;
• Assessed and challenged
management's medium and long-term
growth rates used in the forecast
including comparison to short-term
economic and industry forecasts
where appropriate;
• Assessed and challenged
management's impairment review,
including determining whether
appropriate costs and cash flows are
included, and that these appropriately
factor in the current economic climate,
and corroborate medium and
long-term growth assumptions to
relevant evidence, such as external
market data;
• Utilised valuation experts to
independently determine a weighted
average cost of capital, to assess
whether the WACC used by
management, as determined by their
expert, is appropriate;
• Evaluated historical forecasting
accuracy by comparing results
achieved in prior years to budgets;
• Performed sensitivity analysis on the
key assumptions, including the
forecasted cash flows, the long-term
growth rates and discount rates and
assessing the impact on the value-in-
use calculation;
• Assessed and challenged
management’s assessment of the
expected credit loss provision against
amounts owed by group undertakings;
and
• Assessed whether the disclosures
regarding impairment and expected
credit loss within the financial
statements are appropriate.
RELEVANT DISCLOSURES IN THE
ANNUAL REPORT
• Financial statements; Use of Estimates
and Judgements; Impairment
• Financial statements; Note 12;
Investments in Subsidiary
Undertakings
• Financial statements; Note 13; Amounts
Owed by the Group Undertakings
KEY OBSERVATIONS
From the work performed, our challenge
of management regarding the cash flows
and growth rates included in the
impairment/expected credit loss model
resulted in a material change (£23.0m) in
the impairment charge of investments
and intra-group loans recorded.
Following the recording of the
impairment charge, we did not identify
further material misstatements in the
valuation of investments in subsidiaries
and intra-group loans.
In the graph below, we have presented the key audit matters and significant risks relevant to the audit. This is not a complete list
of all risks identified by our audit.
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87
FINANCIAL STATEMENTS
GROUP INDEPENDENT AUDITOR'S REPORT
OUR APPLICATION
OF MATERIALITY
We apply the concept of materiality both
in planning and performing the audit,
and in evaluating the effect of identified
misstatements on the audit and of
uncorrected misstatements, if any, on
the financial statements and in forming
the opinion in the auditor’s report.
Materiality was determined as follows:
MATERIALITY FOR FINANCIAL
STATEMENTS AS A WHOLE
We define materiality as the magnitude of
misstatement in the financial statements
that, individually or in the aggregate,
could reasonably be expected to influence
the economic decisions of the users of
these financial statements. We use
materiality in determining the nature,
timing and extent of our audit work.
MATERIALITY THRESHOLD - GROUP
£802,000 (2023: £325,000), which
represents approximately 0.75% of the
Group’s revenue.
MATERIALITY THRESHOLD -
PARENT COMPANY
£480,000(2023: £130,000), which
represents approximately 1% of the
parent company’s total assets.
SIGNIFICANT JUDGEMENTS MADE
BY AUDITOR IN DETERMINING
MATERIALITY - GROUP
In determining materiality, we made the
following significant judgements:
• We determined revenue to be the most
appropriate benchmark for the Group
due to this having importance in both
external financial reporting and
internal management reporting. This is
a key driver of business activity and is a
measure on which growth is monitored.
• We determined a percentage of 0.75%
to be appropriate based on the Group’s
size and complexity.
We performed a risk-based audit that
requires an understanding of the Group’s
and the parent company’s business and
in particular matters related to:
UNDERSTANDING THE GROUP, ITS
COMPONENTS, AND THEIR
ENVIRONMENTS, INCLUDING
GROUP-WIDE CONTROLS
• The engagement team obtained an
understanding of the Group and its
environment, including Group-wide
controls and specific controls in each
division, and assessed the risks of
material misstatement at the Group level;
• The engagement team obtained an
understanding of the Group’s
organisational structure and
considered its impact on the scope of
the audit, including assessing the level
of centralisation of the Group control
function; and
• The engagement team performed
walkthroughs of key areas of focus,
including significant risks and other
significant classes of transactions, in
order to confirm their understanding
of the control environment across
the Group.
IDENTIFYING SIGNIFICANT
COMPONENTS
• The engagement team evaluated the
identified components to assess their
significance and determined the
planned audit response based on a
measure of materiality. Significance
was determined after taking into
account relative contribution to the
Group’s revenue and total assets , and
by considering qualitative factors,
such as the component’s specific
nature or circumstances.
TYPE OF WORK TO BE PERFORMED
ON FINANCIAL INFORMATION OF
PARENT AND OTHER COMPONENTS
(INCLUDING HOW IT ADDRESSED
THE KEY AUDIT MATTERS)
• Audits of the financial information of
the component using component
materiality (full-scope audit) were
performed on the financial information
of two components. These procedures
included a combination of tests of detail
and analytical procedures.
• Audits of one or more account balances,
classes of transactions or disclosures of
the component (specific-scope audit)
procedures were carried out on a
further two components using
component materiality. These
procedures included a combination of
tests of details and analytical
procedures and were designed to
increase coverage of the Group’s
financial statement line items;
• Specified audit procedures were
carried out on one component using
component materiality.
• For the eleven components that were
not individually significant to the
Group, or assessed as requiring
specific-scope audits, analytical
procedures were carried out at Group
level, using group materiality.
• The full-scope and specific-scope
audits included all our audit work on
the identified key audit matters as
described in the key audit matters
section of our report.
PERFORMANCE OF OUR AUDIT
• All audit procedures to support the
Group audit opinion were performed
by the Group engagement team. Our
audit procedures were performed by a
combination of remote and in-person
auditing, including attending the
parent company’s primary location in
Kendal to perform audit procedures.
• As part of planning procedures, an
evaluation was completed over the
Group’s internal control environment
including its IT systems and controls to
inform our risk assessment. Our audit
testing approach was wholly substantive.
CHANGES IN APPROACH FROM
PREVIOUS PERIOD
• There has been a decrease in the
number of components with specified
audit procedures, this is due to the
changes in the relative contribution of
the components in scope.
OTHER INFORMATION
The other information comprises the
information included in the annual
report, other than the financial
statements and our auditor’s report
thereon. The directors are responsible
for the other information contained
within the annual report. Our opinion on
the financial statements does not cover
the other information and, except to the
extent otherwise explicitly stated in our
report, we do not express any form of
assurance conclusion thereon.
Our responsibility is to read the other
information and, in doing so, consider
whether the other information is materially
inconsistent with the financial statements
or our knowledge obtained in the audit or
otherwise appears to be materially
misstated. If we identify such material
inconsistencies or apparent material
misstatements, we are required to determine
whether there is a material misstatement in
the financial statements themselves. If, based
on the work we have performed, we conclude
that there is a material misstatement of this
other information, we are required to report
that fact.
We have nothing to report in this regard.
OUR OPINION ON OTHER
MATTERS PRESCRIBED BY
THE COMPANIES ACT 2006
IS UNMODIFIED
In our opinion, based on the work
undertaken in the course of the audit:
• the information given in the strategic
report and the directors’ report for the
financial period for which the financial
statements are prepared is consistent
with the financial statements; and
• the strategic report and the directors’
report have been prepared
in accordance with applicable
legal requirements.
The graph below illustrates how performance materiality interacts with our overall materiality and the threshold
for communication to the audit committee.
OVERALL MATERIALITY – PARENT COMPANY
OVERALL MATERIALITY – GROUP
FSM: Financial statement materiality, PM: Performance materiality, TfC: Threshold for communication to the audit committee
Materiality for the current year is higher
than the level that we determined for the
period ended 1 April 2023 as a result of an
increase in the benchmark amount.
SIGNIFICANT JUDGEMENTS MADE
BY AUDITOR IN DETERMINING
MATERIALITY - PARENT COMPANY
In determining materiality, we made the
following significant judgements:
• This benchmark is considered the
most appropriate because the parent
company is not a trading company.
• The percentage of 1% was selected
based on the risk profile of the parent
company as a component within a
listed entity Group.
Materiality for the current year is higher
than the level that we determined for the
period ended 1 April 2023 as in the prior
year it was capped as a proportion of
Group materiality.
The parent company materiality is solely
for the purposes of the parent company
statutory audit. A lower component
materiality has been used in respect of
the parent company for the Group
financial statement audit.
PERFORMANCE MATERIALITY
USED TO DRIVE THE EXTENT
OF OUR TESTING
We set performance materiality at an
amount less than materiality for the financial
statements as a whole to reduce to an
appropriately low level the probability that
the aggregate of uncorrected and undetected
misstatements exceeds materiality for the
financial statements as a whole.
PERFORMANCE MATERIALITY
THRESHOLD - GROUP
£561,400 (2023: £211,000) which is 70% (2023:
65%) of financial statement materiality.
PERFORMANCE MATERIALITY
THRESHOLD - PARENT COMPANY
£336,000 (2023: £85,000), which is
70% (2023: 65%) of financial statement
materiality.
SIGNIFICANT JUDGEMENTS MADE
BY AUDITOR IN DETERMINING
PERFORMANCE MATERIALITY - GROUP
In determining performance materiality,
we made the following significant
judgements:
• We assessed the effectiveness of the
control environment from the
procedures performed in the planning
stage of the audit.
• The nature, size and volume of
misstatements identified in the
previous audit.
SIGNIFICANT JUDGEMENTS MADE
BY AUDITOR IN DETERMINING
PERFORMANCE MATERIALITY -
PARENT COMPANY
In determining performance materiality, we
made the following significant judgements:
• We assessed the effectiveness of the
control environment from the
procedures performed in the planning
stage of the audit and did not identify
any significant deficiencies.
• The nature, size and volume of
misstatements identified in the
previous audit.
SPECIFIC MATERIALITY
We determine specific materiality for
one or more particular classes of
transactions, account balances or
disclosures for which misstatements of
lesser amounts than materiality for the
financial statements as a whole could
reasonably be expected to influence the
economic decisions of users taken on the
basis of the financial statements.
SPECIFIC MATERIALITY - GROUP
AND PARENT COMPANY
We determined a lower level of specific
materiality for the following areas:
• Directors’ remuneration; and
• Identified related party transactions
outside of the normal course
of business.
COMMUNICATION OF
MISSTATEMENTS TO THE
AUDIT COMMITTEE
We determine a threshold for reporting
unadjusted differences to the audit
committee.
THRESHOLD FOR COMMUNICATION
- GROUP
£40,100 (2023: £16,250), which represents
5% of financial statement materiality,
and misstatements below that threshold
that, in our view, warrant reporting on
qualitative grounds.
THRESHOLD FOR COMMUNICATION
- PARENT COMPANY
£24,000 (2023: £8,000), which represents
5% of financial statement materiality,
and misstatements below that threshold
that, in our view, warrant reporting on
qualitative grounds.
AN OVERVIEW OF THE SCOPE OF OUR AUDIT
AUDIT APPROACH
NO. OF COMPONENTS
% COVERAGE
TOTAL ASSETS
% COVERAGE
REVENUE
FULL-SCOPE AUDIT
2 (2023: 2)
66 (2023: 64)
68 (2023: 74)
SPECIFIC-SCOPE AUDIT
2 (2023: 2)
10 (2023: 0)
11 (2023: 0)
SPECIFIED AUDIT
PROCEDURES
1 (2023: 4)
9 (2023: 32)
0 (2023: 13)
ANALYTICAL PROCEDURES
11 (2023: 8)
15 (2023: 4)
21 (2023: 13)
£24K
£336K
£480K
TFC
PM
FSM
£40.1K
£561.4K
REVENUE:
£103M
FSM:
£802K,
0.75%
FSM:
£480K,
1%
TOTAL ASSETS:
£50M
£802K
TFC
PM
FSM
88
89
FINANCIAL STATEMENTS
GROUP STATEMENT OF COMPREHENSIVE INCOME
52 week period to
53 week period to
30 March 2024
1 April 2023
Note
£’000
£'000
Revenue
2
102,968
129,664
Expected credit loss provision
130
134
Other income
1,970
650
Changes in inventories of finished goods and
work in progress
(2,604 )
817
Raw materials and consumables used
(34,785 )
(48,556 )
Energy costs
(7,130 )
(15,162 )
Employee benefit costs
24
(34,547 )
(34,459 )
Depreciation and amortisation
4
(4,619 )
(4,278 )
Impairment of property, plant and equipment
4
(4,427 )
-
Write-off of assets on restructuring
4
(469 )
-
Other expenses
4
(19,514 )
(25,471 )
OPERATING (LOSS) / PROFIT
2
(3,027 )
3,339
Fair value movement on derivatives
-
(330 )
Interest payable and similar charges
3
(2,234 )
(1,697 )
Interest receivable and similar income
3
-
1
(LOSS) / PROFIT BEFORE TAXATION
4
(5,261 )
1,313
Tax income / (expense)
5
1,264
(797 )
(LOSS) / PROFIT FOR THE PERIOD
(3,997 )
516
(Loss) / earnings per share – basic and diluted
6
(41.8p )
5.4 p
OTHER COMPREHENSIVE INCOME
(Loss) / profit for the period
(3,997 )
516
ITEMS THAT ARE OR MAY BE RECLASSIFIED TO PROFIT
OR LOSS
Exchange differences on translation of foreign
operations
(196 )
222
Cash flow hedges – effective portion of changes
in fair value
14,18
(258 )
1,040
Cash flow hedges – cost of hedging
14
109
(355 )
ITEMS THAT WILL NEVER BE RECLASSIFIED TO PROFIT
OR LOSS
Retirement benefit liabilities – actuarial losses
21
(1,787 )
(3,888 )
Deferred tax on actuarial losses on retirement
benefit liabilities
447
972
Other comprehensive expense for the period
(1,685 )
(2,009 )
TOTAL COMPREHENSIVE EXPENSE FOR THE PERIOD
ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY
(5,682 )
(1,493 )
The accompanying notes form part of the financial statements
GROUP STATEMENT OF COMPREHENSIVE INCOME
audit conducted in accordance with ISAs
(UK) will always detect a material
misstatement when it exists.
Misstatements can arise from fraud or
error and are considered material if,
individually or in the aggregate, they
could reasonably be expected to influence
the economic decisions of users taken on
the basis of these financial statements.
Irregularities, including fraud, are
instances of non-compliance with laws
and regulations. The extent to which our
procedures are capable of detecting
irregularities, including fraud, is
detailed below:
• We obtained an understanding of the
legal and regulatory frameworks
applicable to the Group and parent
company, and the industry in which it
operates. We determined that the most
significant are UK-adopted
international accounting standards
(for the Group), United Kingdom
Generally Accepted Accounting
Practice (for the parent company), the
Companies Act 2006 and relevant UK
tax regulations;
• We corroborated our understanding of
the legal and regulatory framework
applicable to the entity by discussing
relevant frameworks with Group
management and reviewed Board
minutes and papers provided to the
Audit Committee to support this;
• We assessed the susceptibility of the
Group's and the parent company’s
financial statements to material
misstatement, including how fraud
might occur, by evaluating
management's incentives and
opportunities for manipulation of the
financial statements. This included the
evaluation of the risk of management
override of controls. We determined that
the principal risks were in relation to:
− Material transactions impacting
EBITDA around each quarter end,
in line with covenant requirements;
− Material post-close journal entries;
− Potential management bias in
determining accounting estimates,
especially in relation to their
assessment of the valuation of
investments and intra-group loans; and
− Transactions with related parties.
• Audit procedures performed by the
engagement team included:
− evaluating the processes and controls
established to address the risks
related to irregularities and fraud;
− journal entry testing, in particular
those journals determined to be in
respect of our principal risks
documented above; and
− challenging assumptions and
judgements made by management in
its significant accounting estimates.
• These audit procedures were
designed to provide reasonable
assurance that the financial
statements were free from fraud or
error. The risk of not detecting a
material misstatement due to fraud
is higher than the risk of not
detecting one resulting from error
and detecting irregularities that
result from fraud is inherently more
difficult than detecting those that
result from error, as fraud may
involve collusion, deliberate
concealment, forgery or intentional
misrepresentations. Also, the
further removed non-compliance
with laws and regulations is from
events and transactions reflected in
the financial statements, the less
likely we would become aware of it;
• The engagement partner’s assessment
of the appropriateness of the collective
competence and capabilities of the
engagement team included
consideration of the engagement team’s:
− understanding of, and practical
experience with, audit engagements
of a similar nature and complexity
through appropriate training and
participation;
− knowledge of the industry in which
the Group and the parent company
operate; and
− understanding of the legal and
regulatory requirements specific to
the Group and the parent company.
• We issued engagement team
communications in respect of
potential non-compliance with laws
and regulations and fraud.
A further description of our
responsibilities for the audit of the
financial statements is located on the
Financial Reporting Council’s website at:
www.frc.org.uk/auditorsresponsibilities.
This description forms part of our
auditor’s report.
USE OF OUR REPORT
This report is made solely to the
company’s members, as a body, in
accordance with Chapter 3 of Part 16 of
the Companies Act 2006. Our audit work
has been undertaken so that we might
state to the company’s members those
matters we are required to state to them
in an auditor’s report and for no other
purpose. To the fullest extent permitted
by law, we do not accept or assume
responsibility to anyone other than the
company and the company’s members as
a body, for our audit work, for this report,
or for the opinions we have formed.
David White
Senior Statutory Auditor for and on
behalf of Grant Thornton UK LLP
Statutory Auditor,
Chartered Accountants
Birmingham
22 July 2024
MATTER ON WHICH
WE ARE REQUIRED TO
REPORT UNDER THE
COMPANIES ACT 2006
In the light of the knowledge and
understanding of the Group and the
parent company and their environment
obtained in the course of the audit,
we have not identified material
misstatements in the strategic report
or the directors’ report.
MATTERS ON WHICH
WE ARE REQUIRED TO
REPORT BY EXCEPTION
We have nothing to report in respect of
the following matters in relation to
which the Companies Act 2006 requires
us to report to you if, in our opinion:
• adequate accounting records have not
been kept by the parent company, or
returns adequate for our audit have
not been received from branches not
visited by us; or
• the parent company financial
statements are not in agreement with
the accounting records and returns; or
• certain disclosures of directors’
remuneration specified by law are not
made; or
• we have not received all the
information and explanations we
require for our audit.
RESPONSIBILITIES
OF DIRECTORS
As explained more fully in the statement
of directors’ responsibilities set out on
page 80, the directors are responsible for
the preparation of the financial
statements and for being satisfied that
they give a true and fair view, and for
such internal control as the directors
determine is necessary to enable the
preparation of financial statements that
are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, the
directors are responsible for assessing
the Group’s and the parent company’s
ability to continue as a going concern,
disclosing, as applicable, matters related
to going concern and using the going
concern basis of accounting unless the
directors either intend to liquidate the
group or the parent company or to cease
operations, or have no realistic
alternative but to do so.
AUDITOR’S
RESPONSIBILITIES FOR
THE AUDIT OF THE
FINANCIAL STATEMENTS
Our objectives are to obtain reasonable
assurance about whether the financial
statements as a whole are free from
material misstatement, whether due to
fraud or error, and to issue an auditor’s
report that includes our opinion.
Reasonable assurance is a high level of
assurance but is not a guarantee that an
90
91
The Parent Company reported a loss for the period ended 30 March 2024 of £(22,623)k (2023: profit of £4,042k).
The financial statements on pages 89 to 131 were approved by the Board of Directors on 22 July 2024 and were signed on its behalf by:
M A J Cropper
Non-Executive Chair
Company Registration No: 00030226
STATEMENT OF FINANCIAL POSITION
Group as Group as at
Company as Company as at
at 30 March
1 April at 30 March
1 April 2023
Note
2024
2023
2024
£’000
£’000
£’000
£’000
Restated
ASSETS
Goodwill
8
1,264
1,264
-
-
Intangible assets
9
1,210
1,524
564
788
Property, plant and equipment
10
27,667
32,717
1,696
1,758
Right-of-use assets
11
6,028
6,765
270
402
Investments in subsidiary undertakings
12
-
-
2,350
7,350
Amounts owed by group undertakings
13
-
-
32,002
40,867
Other financial assets
14
341
654
341
654
Deferred tax assets
22
5,400
4,198
4,384
4,118
TOTAL NON-CURRENT ASSETS
41,910
47,122
41,607
55,937
Inventories
15
15,796
18,304
-
-
Trade and other receivables
16
17,723
24,763
3,275
13,124
Provision for impairment
16
(513 )
(643 )
-
-
Other financial assets
14
478
428
478
428
Cash and cash equivalents
9,211
7,679
5,021
3,506
Corporation tax
1,345
815
585
582
TOTAL CURRENT ASSETS
44,040
51,346
9,359
17,640
TOTAL ASSETS
85,950
98,468
50,966
73,577
LIABILITIES
Trade and other payables
17
15,570
21,106
6,896
7,465
Other financial liabilities
18
-
58
-
58
Loans and borrowings
19
1,610
1,758
155
217
TOTAL CURRENT LIABILITIES
17,180
22,922
7,051
7,740
Long-term borrowings
19
23,138
22,515
14,944
13,019
Retirement benefit liabilities
21
17,293
16,140
17,293
16,140
Contingent consideration on business acquisition
17
-
1,423
-
-
Deferred tax liabilities
22
2,772
3,403
98
112
TOTAL NON-CURRENT LIABILITIES
43,203
43,481
32,335
29,271
TOTAL LIABILITIES
60,383
66,403
39,386
37,011
EQUITY
Share capital
23
2,389
2,389
2,389
2,389
Share premium
1,588
1,588
1,588
1,588
Translation reserve
579
775
-
-
Reserve for own shares
(1,407 )
(1,407 )
(1,407 )
(1,407 )
Cash flow hedging reserve
782
1,040
776
1,092
Cost of hedging reserve
(246 )
(355 )
(246 )
(355 )
Retained earnings
21,882
28,035
8,480
33,259
TOTAL SHAREHOLDERS’ EQUITY
25,567
32,065
11,580
36,566
TOTAL EQUITY AND LIABILITIES
85,950
98,468
50,966
73,577
The accompanying notes form part of the financial statements
The accompanying notes form part of the financial statements
STATEMENT OF CASH FLOWS
For the period ended 30 March 2024 (2023: for the period ended 1 April 2023)
Group 2024
Group 2023
Note
£’000
£’000
CASH FLOWS FROM OPERATING ACTIVITIES
(Loss) / profit for the period
(3,997 )
516
ADJUSTMENTS FOR:
Tax (income) / expense
5
(1,264 )
797
Depreciation and amortisation
4
4,619
4,278
Impairment of property, plant and equipment
4
4,427
-
Write-off of assets on restructuring
4
469
-
Earn out adjustment on contingent consideration on
business acquisition
4
(422 )
986
Net IAS 19 pension adjustments within profit
(6 )
442
Past service pension deficit payments
(1,381 )
(1,665 )
Foreign exchange differences
(40 )
(136 )
Profit on disposal of property, plant and equipment and
intangible assets
4
(40 )
(589 )
Interest receivable and similar income
3
-
(1 )
Interest payable and similar charges
3
2,234
1,697
Share based payments
(152 )
(59 )
Fair value movements on derivatives
-
330
CHANGES IN WORKING CAPITAL:
Decrease / (increase) in inventories
2,352
(696 )
Decrease / (increase) in trade and other receivables
6,110
(3,614 )
(Decrease) / increase in trade and other payables
(5,576 )
2,396
Tax (paid) / received
(163)
868
NET CASH GENERATED FROM OPERATING ACTIVITIES
7,170
5,550
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of intangible assets
9
(965 )
(1,126 )
Purchase of property, plant and equipment
10
(3,220 )
(5,267 )
Proceeds on disposal of intangible assets
120
-
Contingent consideration on business acquisition paid
17
(250 )
(250 )
NET CASH USED IN INVESTING ACTIVITIES
(4,315 )
(6,643 )
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of new loans
19
2,000
5,050
Repayment of borrowings
19
(429 )
(288 )
Repayment of lease liabilities
19
(1,449 )
(1,561 )
Interest received
-
1
Interest paid
(941 )
(858 )
Non-deliverable forward contract payment
-
(330 )
Payments on interest rate cap
-
(495 )
Dividends paid to shareholders
7
(664 )
(897 )
NET CASH USED IN / GENERATED FROM FINANCING ACTIVITIES
(1,483 )
622
NET INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS
1,372
(471 )
Effects of exchange rate fluctuations on cash held
160
400
NET INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS
1,532
(71 )
Cash and cash equivalents at the start of the period
7,679
7,750
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD
9,211
7,679
CASH AND CASH EQUIVALENTS CONSISTS OF:
Cash at bank and in hand
9,211
7,679
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD
9,211
7,679
FINANCIAL STATEMENTS
STATEMENT OF CASH FLOWS
92
93
STATEMENT OF CHANGES IN EQUITY - COMPANY
Reserve
Cost of
Cash flow
Share
Share
for Own
Hedging
Hedging Retained
All figures in £’000
capital
premium
Shares
reserve
reserve Earnings
Total
AT 26 MARCH 2022
2,389
1,588
(1,407 )
-
-
33,089
35,659
Comprehensive income for the period
-
-
-
-
-
4,042
4,042
Total other comprehensive
income / (expense)
-
-
-
(355 )
1,092
(2,916 ) (2,179 )
Dividends paid
-
-
-
-
-
(897 )
(897 )
Share based payment charge
-
-
-
-
-
(59 )
(59 )
Total contributions by and distributions to
owners of the Group
-
-
-
-
-
(956 )
(956 )
AT 1 APRIL 2023
2,389
1,588
(1,407 )
(355 )
1,092
33,259 36,566
Comprehensive expense for the period
-
-
-
-
-
(22,623 ) (22,623 )
Total other comprehensive
income / (expense)
-
-
-
109
(316 )
(1,340 ) (1,547 )
Dividends paid
-
-
-
-
-
(664 )
(664 )
Share based payment charge
-
-
-
-
-
(152 )
(152 )
Total contributions by and distributions to
owners of the Group
-
-
-
-
-
(816 )
(816 )
AT 30 MARCH 2024
2,389
1,588
(1,407 )
(246 )
776
8,480
11,580
STATEMENT OF CHANGES IN EQUITY - GROUP
Reserve
Cost of
Cash flow
Share
Share Translation
for Own
Hedging
Hedging Retained
All figures in £'000
capital premium
reserve
Shares
reserve
reserve earnings
Total
AT 26 MARCH 2022
2,389
1,588
553
(1,407 )
-
-
31,391
34,514
Comprehensive income for
the period
-
-
-
-
-
-
516
516
Total other comprehensive
(expense) / income
-
-
222
-
(355 )
1,040
(2,916 ) (2,009 )
Dividends paid
-
-
-
-
-
-
(897 )
(897 )
Share based payment charge
-
-
-
-
-
-
(59 )
(59 )
Total contributions by and
distributions to owners of
the Group
-
-
-
-
-
-
(956 )
(956 )
AT 1 APRIL 2023
2,389
1,588
775
(1,407 )
(355 )
1,040
28,035
32,065
Comprehensive expense for
the period
-
-
-
-
-
-
(3,997 ) (3,997 )
Total other comprehensive
(expense) / income
-
-
(196 )
-
109
(258 )
(1,340 ) (1,685 )
Dividends paid
-
-
-
-
-
-
(664 )
(664 )
Share based payment charge
-
-
-
-
-
-
(152 )
(152 )
Total contributions by and
distributions to owners of
the Group
-
-
-
-
-
-
(816 )
(816 )
AT 30 MARCH 2024
2,389
1,588
579
(1,407 )
(246 )
782
21,882
25,567
The accompanying notes form part of the financial statements
NOTES TO THE
FINANCIAL STATEMENTS
1 ACCOUNTING POLICIES
The principal accounting policies
adopted in the preparation of these
financial statements are set out below.
These policies have been consistently
applied to all the years presented,
unless otherwise stated.
STATEMENT OF COMPLIANCE
These financial statements are
consolidated financial statements for the
Group consisting of James Cropper PLC,
a company registered in the UK, and all
its subsidiaries. The consolidated
financial statements have been prepared
in accordance with UK adopted
international accounting standards and
with those parts of the Companies Act
2006 applicable to companies reporting
under IFRS. The financial statements of
the parent company have been prepared
in accordance with Financial Reporting
Standard 101 Reduced Disclosure
Framework (“FRS 101”) and the following
disclosure exemptions have been adopted:
• A statement of cash flows has not
been presented; and
• An analysis of revenue from contracts
with customers has not been given.
BASIS OF PREPARATION
The accounting “year” for the Group
is a 52 week accounting period ended
30 March 2024 (2023: 53 week
accounting period ended 1 April 2023).
The consolidated financial statements
have been prepared on a going concern
basis under the historical cost convention
except for the revaluation of certain
financial instruments to fair value.
In determining the appropriate basis of
preparation, the impact of the energy
crisis and other inflationary pressures
have been considered.
The financial statements are presented in
Pounds Sterling, being the currency of the
primary economic environment in which
the Group operates. All values are
rounded to the nearest thousand pounds,
except where otherwise indicated.
On publishing the parent company
financial statements here together
with the Group financial statements,
the Company is taking advantage of
the exemption in s408 of the Companies
Act 2006 not to present its individual
Statement of Comprehensive Income
and related notes that form a part of
these approved financial statements.
GOING CONCERN
The Group sets an annual budget and
3-year strategic plan against which
performance is compared, and operates
a monthly reporting and quarterly
forecasting cycle, which the Board uses
to monitor profitability and liquidity
and ensure the Group has sufficient debt
facilities to ensure its ongoing viability.
The Board believes that an 18-month
planning horizon to September 2025, based
on the Board approved annual budget and
strategic plan, is an appropriate period over
which to evaluate the Group’s ability to
continue as a going concern.
In carrying out this evaluation the
Board considered the challenging
trading environment during the second
half of the financial period to 30 March
2024 and applied various sensitivities,
including modelling a severe but
plausible downside scenario that
reduced revenue significantly below
the levels assumed in the budget and
strategic plan. The Board also carried out
a reverse stress test to identify the extent
to which revenue, profit and cash
generation would have to fall in order
to cause challenges to liquidity or bank
covenant compliance. Given the market
outlook and trading after the end of the
financial period the Board concluded
that the reverse stress test was an
implausible scenario.
As part of its risk mitigation strategy
the Group has agreed amendments to
the two financial covenants in its UK
bank loan for the June, September and
December 2024 test dates to provide
additional headroom against potential
downside scenarios.
Based on this evaluation the Directors
consider that the Group and company
will have sufficient funds to continue to
meet their liabilities as they fall due
for at least 12 months from the date of
approval of the financial statements.
Therefore the Directors have adopted
the going concern basis in preparing
the financial statements.
BASIS OF CONSOLIDATION
The financial statements of the
Group consolidate the accounts of
the parent company and all of its
subsidiaries. All subsidiaries have
the same reporting date.
All transactions and balances between
Group companies are eliminated on
consolidation, including unrealised
gains and losses on transactions
between Group companies. Where
unrealised losses or intra-group asset
sales are reversed on consolidation, the
asset is also tested for impairment from
a Group perspective.
Amounts reported in the financial
statements of subsidiaries have been
adjusted where necessary to ensure
consistency with the accounting
policies of the Group.
Profit or loss and other comprehensive
income of subsidiaries acquired or
disposed of during the year are
recognised from the date of acquisition,
or up to the effective date of disposal
as applicable.
(A) REVENUE RECOGNITION
Revenue represents income derived
from contracts for the provision of
goods or services by the Company and its
subsidiary undertakings to customers in
exchange for consideration in the
ordinary course of the Group’s business.
Upon approval by the parties to a
contract, the contract is assessed to
identify each promise to transfer either
a distinct good or service, or a series of
distinct goods or services that are
substantially the same and have the
same pattern of transfer to the customer.
The accompanying notes form part of the financial statements
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
94
95
Revenue from the sale of goods is
recognised when control of the goods
has been transferred to the buyer. Goods
are identified as products made from
either natural fibres (e.g. paper or
moulded paper products) or man-made
fibres (e.g. highly technical nonwoven
products made by the Advanced
Materials division).
Revenue is recognised when:
• the Group has transferred
control to the buyer;
• all significant performance
obligations have been met;
• the Group retains neither continuing
managerial involvement nor effective
control over the goods;
• it is probable that the economic
benefits associated with the transaction
will flow to the Group; and
• the amount of revenue can be
measured reliably.
Transfer of control varies depending on
the individual terms of the contract of
sale. For sales in the UK, transfer of
control occurs when the goods are
despatched to the customer. However, for
some international shipments, transfer
of control occurs either upon loading the
goods onto the relevant carrier or when
the goods have arrived in the overseas
port. The point of transfer of control for
international shipments is dictated by
the terms of each sale.
Although the majority of the Group’s
contracts with customers are not
complex, with revenue being fixed for a
specific quantity of goods, the Group has
identified a number of contracts in which
customers are given volume rebates and/
or other promotional rebates based on
quantities purchased over a contractually
agreed period of time. Rebates payable
to customers are contingent on the
occurrence or non-occurrence of a
future event, e.g. the customer meeting
certain agreed criteria. Rebates are
recorded using the most likely method
(the single most likely amount in a range
of possible consideration amounts).
Management makes estimates on an
ongoing basis, primarily based on
current customer spending and historic
data, in order to assess customer
revenues and to calculate the value of
rebates to be deducted from revenue.
Where rebates are expected to be given
to customers, the rebates are quantified
and charged directly to the Consolidated
Statement of Comprehensive Income
over the period to which they relate
and are recognised as a deduction
from revenue.
Revenue is only recognised to the
extent that it is highly probable that
a significant reversal will not occur.
A contract liability is recognised for
expected volume discounts payable to
customers in relation to sales made
until the end of the reporting period.
The estimated volume discount is
revised at each reporting date.
(B) OPERATING SEGMENTS
IFRS 8 Operating Segments requires
that entities reflect the ‘management
approach’ to reporting the financial
performance of its operating segments.
Management has determined the
segments that are reported in a manner
consistent with the internal reporting
provided to the chief operating
decision-maker, identified as the
Executive Committee that makes
strategic decisions. This committee
considers the business principally based
on three operating segments. Operating
segments are those components of the
Group that are engaged in providing a
group of related products that are
subject to risks and returns that are
different to other operating segments.
Geographical areas are components
where the eventual product destination
is in a particular geographic environment
which is subject to risks and returns that
are different from other such areas. Costs
are allocated to segments based on the
segment to which they relate. Central costs
are recharged on an appropriate basis.
(C) EMISSION QUOTAS
The Group participates in the UK
Emissions Trading Scheme. The
Group has adopted an accounting
policy which recognises the emission
allowances as an intangible asset and
an associated liability.
The intangible asset is valued at the
market price on the date of issue. The
liability is valued at the market price
on the date of issue up to the level of
allocated allowances held.
Should emissions exceed the annual
allowance any excess of liability above
the level of the allowances held is
valued at the market price ruling at the
Statement of Financial Position date and
charged against operating profit
Allowances not utilised are maintained
against a potential future shortfall.
When allowances are utilised both the
intangible asset and liability are
amortised to the Statement of
Comprehensive Income.
Emission allowances are assessed
annually for impairment based on
latest market prices.
(D) FOREIGN CURRENCIES
The consolidated financial statements
are presented in Pounds Sterling, which
is the Group’s presentation currency.
Transactions in foreign currencies are
translated at the foreign exchange rate
ruling at the date of the transaction.
Monetary assets and liabilities
denominated in foreign currencies at the
Statement of Financial Position date are
translated at the foreign exchange rate
ruling at that date. Foreign exchange
differences arising on translation are
recognised in the Statement of
Comprehensive Income.
Non-monetary assets and liabilities
that are measured at historical cost in a
foreign currency are translated using
the exchange rate at the date of the
transaction.
The assets and liabilities of foreign
operations are translated at foreign
exchange rates ruling at the Statement
of Financial Position date. The revenues
and expenses of foreign operations are
translated at an average rate for the
period where this rate approximates to
the foreign exchange rates ruling at the
dates of the transactions. Exchange
differences arising from translation of
foreign operations are taken directly to
the translation reserve; they are released
into the Statement of Comprehensive
Income upon disposal.
The portion of gain or loss on foreign
currency borrowings that are used to
hedge a net investment in a foreign
operation, that is determined to be
an effective hedge, is included as a
movement in the cumulative translation
reserve. On subsequent disposal such
gains or losses will form part of the
profit/loss on disposal within the
Statement of Comprehensive Income.
Any ineffective portion is recognised
immediately in the Statement of
Comprehensive Income.
(E) INTANGIBLE FIXED ASSETS
Intangible assets are stated at cost less
accumulated amortisation and
accumulated impairments losses, if any.
The following useful lives have been
determined for intangible assets.
Customer relationships
10 years
Technology*
10 years
Computer software
3 - 10 years
* Internally developed hydrogen
production technology related to
platinum group materials coatings
and electrolysis.
Goodwill is tested annually for impairment,
whereby the recoverable amount of the
respective cash generating unit, determined
through a value in use calculation is
compared to its carrying amount.
(F) PROPERTY PLANT
AND EQUIPMENT
Property, plant and equipment are stated
at cost less accumulated depreciation
and impairment losses. Depreciation is
provided on all property, plant and
equipment, other than freehold land, at
rates calculated to write off the cost less
residual value of each asset evenly over
its expected useful life, as follows:
Freehold buildings
14 - 40 years
Plant and machinery
2 - 20 years
Residual values and useful lives
are reviewed annually. Land is
not depreciated.
(G) IMPAIRMENT OF ASSETS
At each reporting date, the Group
assesses whether there is any indication
that an asset may be impaired. Where an
indicator of impairment exists, the
Group makes an estimate of
recoverable amount.
Where the carrying value of an asset
exceeds its recoverable amount the
asset is written down to its recoverable
amount. Recoverable amount is the
higher of fair value less costs to sell
and value in use and is calculated for
individual assets. If an asset does not
generate cash flows that are largely
independent of those from other assets
or groups of assets, the recoverable
amount of the cash generating unit to
which the asset belongs is determined.
Discount rates reflecting the asset specific
risks and the time value of money are
used for the value in use calculation.
(H) RESEARCH AND DEVELOPMENT
Research expenditure is recognised as an
expense as incurred. Costs incurred on
development projects (relating to the
design and testing of new or improved
products) are recognised as intangible
assets when all of the following
criteria are met:
• it is demonstrable that the asset will
generate future economic benefits;
• it is the intention to complete the
intangible asset so that it will be
available for use or sale;
• adequate resources are available to
complete the development;
• the asset can be used or sold;
• it is technically feasible to complete
the asset; and
• the expenditure attributable to the
asset during development can be
reliably measured.
Other development expenditures are
recognised as an expense as incurred.
Development costs with a finite useful
life that have been capitalised are
amortised from the commencement
of the commercial production of the
product on a straight-line basis over
the period of its expected benefit.
Research and development expenditure
credit (RDEC) is recognised within other
operating income on an accrual basis.
(J) IFRS 16 ‘LEASES’
The Group leases various warehouses,
machinery, production lines and motor
vehicles. Lease terms are negotiated on
an individual basis and contain a range of
different terms and conditions. The lease
agreements do not impose any covenants,
but leased assets may not be used as
security for other borrowing purposes.
Assets and liabilities arising from a lease
are initially measured on a present value
basis. Lease liabilities are secured on the
assets leased. Lease liabilities include
the net present value of the following
lease payments:
• fixed payments (including in-
substance fixed payments), less any
lease incentives receivable;
• variable lease payments that are based
on an index or rate;
• amounts expected to be payable by the
lessee under residual value guarantees;
• the exercise price of a purchase option
if the lessee is reasonably certain to
exercise that option;
• payments of penalties for terminating
the lease, if the lease term reflects the
lessee exercising that option.
The lease payments are discounted using
the interest rate implicit in the lease. If
that rate cannot be determined, the
lessee’s incremental borrowing rate is
used, being the rate that the lessee would
have to pay to borrow the funds
necessary to obtain an asset of similar
value in a similar economic environment
with similar terms and conditions.
The liability is subsequently stated at
amortised cost using the effective
interest rate method.
Right-of-use assets are measured at cost
comprising the following:
i. the amount of the initial
measurement of the lease liability;
ii. any lease payments made at or
before the commencement date
less any lease incentives received;
iii. any initial direct costs; and
iv. restoration costs.
Right-of-use assets are subsequently
carried at cost less accumulated
depreciation and impairment losses.
Depreciation is provided on all right-of-
use assets at rates calculated to write off
the cost less residual value of each asset
evenly over the lease term.
There are no short-term leases, and
leases of low-value assets are recognised
on a straight-line basis as an expense in
the statement of consolidated income.
The Group has no short-term, low-value
leases, or leases with variable payments.
(K) INVENTORIES
Inventories are stated at the lower of
cost and net realisable value. The cost
of finished goods and work in progress
comprises design costs, raw materials,
direct labour, other direct costs and
related production overheads (based on
normal operating capacity). It excludes
borrowing costs. Net realisable value is
the estimated selling price in the ordinary
course of business, less applicable
variable selling expenses. Engineering
spares are included within inventories.
(L) GRANTS
Capital grants are credited to a deferral
account and released to income over
the expected useful lives of the relevant
assets. Grants of a revenue nature
are credited to the Statement of
Comprehensive Income in the period
to which they relate.
The accompanying notes form part of the financial statements
The accompanying notes form part of the financial statements
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
96
97
(M) INVESTMENTS IN SUBSIDIARY
UNDERTAKINGS AND AMOUNTS
OWED BY GROUP UNDERTAKINGS
Investments in subsidiary undertakings
are stated at cost less any impairment
in value.
Amounts owed by Group undertakings
are recognised initially at fair value and
are subsequently carried at amortised
cost using the effective interest method,
less any impairment.
(N) TRADE RECEIVABLES
Trade receivables are recorded at their
initial transaction price after appropriate
revision for impairment. A provision
for impairment is calculated using an
expected credit loss impairment model.
Under this impairment model approach,
in line with IFRS 9, it is not necessary for
a credit event to have occurred before
credit losses are recognised. Instead, the
Group accounts for expected credit losses
and changes in those expected credit
losses. The amount of expected credit
losses is updated at each reporting date.
To measure expected credit losses
the Group assesses historic credit loss
experiences and adjusts for current
and forward looking information on
macroeconomic factors affecting the
Group’s customers including the state
of the economy and industry specific
factors in countries where the Group
operates. Trade receivables are held at
amortised cost using the effective
interest method, less any impairment.
(O) TRADE PAYABLES
Trade payables are recorded at their fair
value. Trade payables are subsequently
stated at amortised cost using the
effective interest method.
(P) OTHER INCOME
Other income includes the research and
development expenditure credit (RDEC),
royalties received and grants received
for funded projects.
(Q) HEDGE ACCOUNTING
Cash flow hedge:
Where a derivative financial instrument
is designated as a hedge of the variability
in cash flows of a recognised asset or
liability, the effective part of any gain
or loss on the derivative financial
instrument is recognised in other
comprehensive income. Any ineffective
portion of the hedge is recognised
immediately in the Statement of
Comprehensive Income.
Hedging relationships are classified
as cash flow hedges where the
hedging instrument hedges exposure
to variability in cash flows that is
attributable to a particular risk
associated with a recognised asset
or liability such as interest payments
on variable rate debt.
(R) CASH AND CASH EQUIVALENTS
Cash and cash equivalents includes
cash in hand, deposits held at call
with banks, other short-term highly
liquid investments with original
maturities of three months or less,
and bank overdrafts.
Bank overdrafts are shown as
borrowings within current liabilities
on the Statement of Financial Position.
Bank overdrafts that are repayable on
demand and form an integral part of the
Group’s cash management are included
as a component of cash and cash
equivalents for the purpose only
of the Statement of Cash Flows.
(S) BORROWING COSTS
Borrowings are recognised initially
at fair value, net of transaction costs
incurred. Borrowings are subsequently
stated at amortised cost; any difference
between the proceeds (net of transaction
costs) and the redemption value is
recognised in the Statement of
Comprehensive Income over the
period of the borrowings using the
effective interest method.
(T) INTEREST
Interest is recognised in the Statement
of Comprehensive Income on an accrual
basis using the effective interest method.
(U) SHARE BASED PAYMENTS AND
OWN SHARES HELD
The Group operates an equity settled
share-based payment scheme, being a
Long-Term Incentive Plan (LTIP) for
certain Directors and senior managers.
The Employee Benefit Trust (EBT) holds
shares for the granting and vesting of
shares under the LTIP scheme. The cost
of purchasing and transferring own
shares held by the EBT are shown as
movements against equity.
The EBT is not treated as an extension of
the parent and is therefore not included
in the parent’s individual accounts and is
only consolidated in the Group accounts.
The costs of purchasing own shares
held by the EBT are shown as a deduction
within shareholders’ equity in the
consolidated Statement of Changes
in Equity.
The Group recognises an expense
to the Statement of Comprehensive
Income representing the fair value of
outstanding equity settled share-based
payment awards to employees which
have not vested as at the period end.
The fair values are charged to the
Statement of Comprehensive Income over
the relevant vesting period adjusted to
reflect actual and expected vesting levels.
(V) CAPITAL MANAGEMENT
The Group and Company’s capital
includes share capital, reserves and
retained earnings. The Group and
Company’s policies are designed to
ensure the ability to continue as a going
concern, in order to provide returns to
the shareholders and benefits to other
stakeholders. The Group and Company
invest in financial assets to provide
an adequate level of return to the
shareholders commensurate with
the level of risk.
The Group and Company manage the
capital structure and adjust this in light
of changes in the economic conditions
and risks associated with the underlying
assets. In order to maintain or adjust the
capital structure, the Group and
Company may adjust the amount of any
dividend paid to the shareholders, return
capital to the shareholders, issue new
shares, or sell assets to reduce debt.
Details of borrowings are set out in note
19 and details of shares are set out in note
23. The Group and Company are not
subject to any externally imposed
capital requirements. There have been
no material changes in the management
of capital during the period.
(W) TAXATION
Tax on the Statement of Comprehensive
Income for the year comprises current
and deferred tax. Tax is recognised in
the Statement of Comprehensive Income,
according to the accounting treatment
of the related transaction.
Deferred tax is provided on temporary
differences between the carrying
amounts of assets and liabilities for
financial reporting purposes and the
amounts used for taxation purposes.
The accompanying notes form part of the financial statements
The following temporary differences are
not provided for: the initial recognition
of goodwill; the initial recognition of
assets or liabilities that affect neither
accounting nor taxable profit other
than in a business combination; and
differences relating to investments in
subsidiaries to the extent that they are
not expected to reverse in the
foreseeable future.
The amount of deferred tax provided is
based on the expected realisation or
settlement of the carrying amount of
assets and liabilities, using tax rates
enacted or substantively enacted at the
Statement of Financial Position date.
A deferred tax asset is recognised only to
the extent that it is probable that future
taxable profit will be available against
which the asset can be utilised.
(X) RETIREMENT BENEFITS
The Group operates various pension
schemes. The schemes are generally
funded through payments to trustee-
administered funds, determined by
periodic actuarial valuations. The Group
has both defined benefit and defined
contribution plans. A defined benefit
plan is a pension plan that defines an
amount of pension benefit that an
employee will receive on retirement. A
defined contribution plan is a pension
plan under which the Group pays fixed
contributions.
The liability recognised in the Statement
of Financial Position in respect of defined
benefit pension plans is the present value
of the defined benefit obligation at the
Statement of Financial Position date less
the fair value of plan assets. The defined
benefit obligation is calculated annually
by independent actuaries using the
projected unit credit method.
The present value of the defined benefit
obligation is determined by discounting
the estimated future cash flows at a rate
based on the interest rates of high-
quality corporate bonds that are
denominated in the currency in which
the benefits will be paid, and that have
terms to maturity approximating to the
terms of the related pension liability.
If there is a net surplus on the schemes,
the value of the asset is measured at the
economic benefit, calculated as the
difference between the expected value
of future service costs to the Staff
Scheme and the total contributions
required from the Company under the
Schedule of Contributions.
If a material surplus occurs, the
Company will seek external legal advice
to determine whether the Company has
an unconditional right to a refund of
surplus in the future.
Actuarial gains and losses arising from
experience adjustments and changes in
actuarial assumptions are recognised in
the period in which they occur in Other
Comprehensive Income and in the
Statement of Changes in Equity.
Past service costs are recognised
immediately in income, unless the
changes to the pension plan are
conditional on the employees remaining
in service for a specified period of time
(the vesting period). In this case, the
past-service costs are amortised on a
straight-line basis over the vesting period.
For defined contribution plans, the
Group pays agreed contributions to
the schemes. The Group has no
further payment obligations once
the contributions have been paid.
The contributions are recognised as
an employee benefit expense when they
are due.
(Y) NON-GAAP
PERFORMANCE MEASURES
In the reporting of financial information,
the Group has adopted certain non-
GAAP measures of historic or future
financial performance, position or cash
flows other than those defined or
specified under International Financial
Reporting Standards (IFRS).
Where non-GAAP measures have been
used, it is the belief of the Group that
such measures help provide a clearer
understanding of the underlying
performance, removing the impact of
exceptional items and IAS 19 adjustments
that can distort core operating profitability
of the Group and make year on year
comparison of performance challenging.
Non-GAAP measures should be
considered in addition to, and are
not intended to be a substitute for,
or superior to, IFRS measures.
Exceptional items are material income
or costs which derive from events or
transactions which are unusual or
infrequent in their nature and are
disclosed separately in the notes to
the financial statements.
Exceptional items are presented in
the Statement of Comprehensive
Income in the income or expense to
which they relate.
(Z) USE OF ESTIMATES
AND JUDGEMENTS
The preparation of financial statements
in conformity with IFRS requires the use
of estimates and judgements that affect
the reported amounts of assets and
liabilities at the date of the financial
statements and the reported amounts
of revenue and expenses during the
reporting period.
Although these estimates are based
on management’s best knowledge of
the amount, event or actions, actual
results ultimately may differ from
those estimates.
The Group’s key sources of significant
estimates are as detailed below:
i. Retirement benefits
IAS 19 Employee Benefits requires the
Group to make assumptions including,
but not limited to, rates of inflation,
discount rates and life expectancies.
The use of different assumptions, in any
of the above calculations, could have a
material effect on the accounting values
of the relevant Statement of Financial
Position assets and liabilities which
could also result in a change to the cost
of such liabilities as recognised in profit
or loss over time.
These assumptions are subject to
periodic review. The Group takes
specialist advice and seeks to follow
the most appropriate method, applied
consistently from year to year.
See note 21 for additional information and
a sensitivity analysis highlighting the
impact of a change in key assumptions.
ii. Contingencies
The Group has identified that the
historical valuation of the defined
benefit pension obligation did not
capture the potential additional
liabilities arising in relation to the
normal retirement dates for male and
female members of the Staff Scheme.
An estimate of the additional liability has
been included in the financial statements
since year ended 31 March 2019. An
allowance of 0.15% of liabilities has been
included in the valuation. If the ultimate
impact is greater or lesser, the difference
will be taken as an experience adjustment
through the Other Comprehensive
Income in the relevant year.
The accompanying notes form part of the financial statements
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
98
99
The impact on the liability as at the
reporting date for a range of reasonable
sensitivities is set out below.
SCHEME LIABILITIES
All figures in ’£000
0.05%
86,993
0.15%
87,020
0.25%
87,107
iii. Impairment of property plant and
equipment, investments in subsidiary
undertakings and amounts owed by
group undertakings.
IAS 36 requires an entity to assess whether
there is any indication that an asset may be
impaired. The Group considers that three
successive years of operating losses and
the underlying market conditions that
have contributed to those losses are an
indication of potential impairment of the
fixed assets in the Paper and Packaging
CGU. Therefore an impairment review was
carried out, which resulted in an
impairment of £4.4m being recognised
against the carrying value of the fixed
assets in the Paper and Packaging business.
The impairment review required the Group
to make assumptions including, but not
limited to, future revenue growth rates and
the discount rate to apply to future cash
flows. The use of different assumptions
could have a material effect on the
impairment charge included in the Group
Statement of Comprehensive Income and
the fixed asset carrying value included in
the Statement of Financial Position.
The Group considered various scenarios
and market sensitivities in assessing the
future revenue growth rate assumptions
to use in the impairment calculation.
The Group took specialist advice to
determine the discount rate to apply
to future cash flows.
Similar judgements were made by the
parent company in relation to
investments in subsidiary undertakings
and amounts owed by group
undertakings, resulting in impairments
in accordance with IAS 36 and IFRS 9 as
set out in notes 12 and 13.
2 SEGMENTAL REPORTING
IFRS 8 Operating Segments requires
that entities adopt the ‘management
approach’ to reporting the financial
performance of its operating segments.
Management has determined the
segments that are reported in a manner
consistent with the internal reporting
provided to the chief operating decision
maker, identified as the Executive
Committee that makes strategic
decisions. This committee considers the
business principally via three segments,
principally based in the UK:
• James Cropper Paper Products (Paper):
comprising James Cropper Speciality
Papers, a manufacturer of specialist
paper and boards, James Cropper
Converting, a converter of paper, and
Colourform, a manufacturer of
moulded fibre products.
• Technical Fibre Products (TFP) –
a manufacturer of advanced materials.
• Group Services and Eliminations –
comprise central functions providing
services to the subsidiary companies,
and the elimination of inter-segment
revenue, profit and investments.
“Adjusted Operating Profit before
exceptional items and IAS 19” refers to
operating profit prior to exceptional
items and the IAS 19 pension adjustment.
The “IAS 19 pension adjustment” refers
to the impact on operating profit of the
pension schemes’ operating costs, as
described in the IAS 19 section of the
Financial Review.
Inter-segment transactions are
performed in the normal course
of business and at arm’s length.
OPERATING SEGMENTS
PERIOD ENDED 30 MARCH 2024
Group Services
Continuing
All figures in £'000
Paper
TFP
and Eliminations
Operations
REVENUE
External
68,465
34,503
-
102,968
SEGMENT PROFIT/(LOSS)
Adjusted Operating (Loss) / Profit before
exceptional items and IAS 19
(5,138 )
7,715
(600 )
1,977
Exceptional costs
(6,308 )
354
944
(5,010 )
IAS 19 Pension adjustments to loss
-
-
6
6
OPERATING (LOSS) / PROFIT
(11,446 )
8,069
350
(3,027 )
Interest payable and similar charges
(2,234 )
LOSS BEFORE TAX
(5,261 )
Tax income
1,264
LOSS FOR THE PERIOD
(3,997 )
TOTAL ASSETS
62,663
68,482
(45,195 )
85,950
TOTAL LIABILITIES
89,353
50,282
(79,252 )
60,383
Group
Paper
Services and
Continuing
All figures in £'000
Products
TFP
Eliminations
Operations
REVENUE
External
92,477
37,187
-
129,664
92,477
37,187
-
129,664
SEGMENT PROFIT
Adjusted Operating (Loss) /
Profit before exceptional items and IAS 19
(3,904 )
9,244
(5731)
4,767
Exceptional costs
-
(986 )
-1
(986 )
IAS 19 Pension adjustments to profit
-
-
(4421)
(442 )
OPERATING (LOSS) / PROFIT
(3,904 )
8,258
(1,0151)
3,339
Fair value movement on derivatives
1
(330 )
Interest payable and similar charges
1
(1,697 )
Interest receivable and similar income
1
1
PROFIT BEFORE TAX
1
1,313
Tax expense
1
(797 )
PROFIT FOR THE PERIOD
1
516
TOTAL ASSETS
74,723
68,482
(44,7371)
98,468
TOTAL LIABILITIES
83,422
56,874
(73,8931)
66,403
The Group’s country of domicile is the UK. Revenue from external customers is based on the customers’ location. Non-current assets
are based on the location of the assets and exclude financial assets, deferred tax assets and post-employment benefit net assets.
The accompanying notes form part of the financial statements
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
All figures in £'000
2024
2023
2024
2023
UK
39,468
53,517
32,063
37,424
Europe
29,681
35,986
-
-
US
24,155
27,209
4,447
4,846
Asia
8,660
10,997
-
-
Rest of the Americas
440
966
-
-
Australasia
405
762
-
-
Africa
159
227
-
-
TOTAL
102,968
129,664
36,510
42,270
Revenue from external
customers
Non-current assets
excluding deferred tax
All figures in £'000
Paper
TFP
Group
Total
Additions to non-current assets
2,610
750
410
3,770
PERIOD ENDED 1 APRIL 2023
100
101
3 FINANCE COSTS
Finance costs include costs in respect of interest payable on borrowings and defined benefit pension schemes.
Finance income includes interest received from short term deposits.
All figures in £’000
2024
2023
FINANCE COSTS
Interest payable on bank borrowings
782
705
Interest payable in relation to lease liabilities
219
268
Net finance costs arising on defined benefit schemes
753
345
Other finance charges
109
127
Fair value adjustment on contingent consideration
262
109
Fair value adjustments on derivatives
109
143
TOTAL FINANCE COSTS
2,234
1,697
FINANCE INCOME
Finance income in respect of cash and short term investments
-
1
TOTAL FINANCE INCOME
-
1
NET FINANCE COSTS
2,234
1,696
The accompanying notes form part of the financial statements
All figures in £’000
The following items have been charged / (credited) in arriving at profit/(LOSS) before tax: Note
2024
2023
Employee benefit costs
24
34,547
34,459
Depreciation and amortisation
- Intangible assets
9
195
205
- Property, plant and equipment
10
3,494
3,065
- Right-of-use assets
11
930
1,008
Write-off of assets on restructuring
469
-
Impairment of assets on restructuring
10
4,427
-
9,515
4,278
Other income:
- Government grants received
(36 )
(307 )
- Pension settlement
(1,404 )
-
- Rental income
(40 )
-
- Research and development tax credits
(490 )
(338 )
- Storage
-
(5 )
(1,970 )
(650 )
Other expenses:
- Administration costs
10,771
10,711
- Distribution costs
2,724
4,869
- Earn-out adjustment on contingent consideration on business acquisition
(422 )
986
- Environmental taxation
(317 )
2,089
- Foreign exchange differences
(194 )
(235 )
- Profit on disposal of property, plant and equipment and intangible assets
(40 )
(589 )
- Repairs and maintenance expenditure on property, plant and equipment
5,948
6,326
- Sales and marketing costs
1,044
1,314
19,514
25,471
Provision for impairment reversal – Trade receivables
(130 )
(134 )
Government grants relate to assistance received for research projects and the development of new technology. Research and
development expenditure across the Group for the year ended 30 March 2024 was £2,526k (2023: £3,207k) and is included in other
expenses and employee benefit costs.
SERVICES PROVIDED BY THE GROUP'S AUDITOR AND NETWORK FIRMS
During the year the Group obtained the following services from the Group's auditor at costs as detailed below:
All figures in £’000
2024
2023
AUDIT SERVICES
Fees payable to the Company’s auditor for the audit of parent
company and consolidated accounts
90
98
Remuneration payable to the Company’s auditor for the
auditing of subsidiary accounts and associates of the Company
pursuant to legislation (including that of countries and
territories outside Great Britain)
230
250
Expenses billed
16
-
336
348
Other non-audit services
-
10
4 PROFIT/(LOSS) BEFORE TAXATION
The accompanying notes form part of the financial statements
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
5 TAXATION
Analysis of Group tax charges in the period.
All figures in £'000
CONTINUING OPERATIONS
Note
2024
2023
Current tax
122
419
Adjustments in respect of prior period current tax
(6 )
70
TOTAL CURRENT TAX
116
489
Deferred tax
(1,320 )
179
Adjustments in respect of prior period deferred tax
(60 )
76
Effects of changes in tax rate
-
53
TOTAL DEFERRED TAX
22
(1,380 )
308
TAX PER STATEMENT OF COMPREHENSIVE INCOME
(1,264 )
797
TAX ON ITEMS CHARGED TO OTHER COMPREHENSIVE INCOME
Deferred tax on actuarial gains on retirement benefit liabilities
(447 )
(972 )
TAX ON ITEMS CHARGED TO EQUITY
Deferred tax on share options
(6 )
10
102
103
The accompanying notes form part of the financial statements
The accompanying notes form part of the financial statements
2024
2023
Weighted
Weighted
average
average
number
Amount
number
Amount
Loss
of shares per share
Earnings
of shares
per share
£’000
‘000
pence
£’000
‘000
pence
Earnings attributable to
ordinary shareholders
(3,997 )
9,555
(41.8)
516
9,555
5.4
BASIC AND DILUTED EPS
(3,997 )
9,555
(41.8)
516
9,555
5.4
6 EARNINGS PER SHARE
Basic earnings per share is calculated on the Group’s loss for the period attributable to equity shareholders of £(3,997)k (2023: profit
of £516k) divided by 9.6m (2023: 9.6m), being the weighted average number of shares in issue during the year.
Diluted earnings per share reflects any commitments made by the Group to issue shares in the future. The weighted average
number of ordinary shares in issue is adjusted to assume conversion of all dilutive potential ordinary shares. Current share options
would be vested by awarding shares already in existence and held within the Group. At 30 March 2024 there were no potential
dilutive share options outstanding (2023: nil).
7 DIVIDENDS
All figures in £'000
2024
2023
Final paid for the period ended 1 April 2023 / 26 March 2022
378
708
Interim paid for the period ended 30 March 2024 / 1 April 2023
286
189
Total dividends paid in the year
664
897
Final dividend per share for the period ended 1 April 2023 / 26 March 2022
4.0 p
7.5 p
Interim dividend per share for the period ended 30 March 2024 / 1 April 2023
3.0 p
2.0 p
The Directors are not proposing a final dividend in respect of the period ended 30 March 2024 (2023: 4.0 pence per share).
The total dividend declared for the period is 3.0 pence per share (2023: 6.0 pence per share).
8 GOODWILL
Group
Company
All figures in £'000
2024
2023
2024
2023
COST AND CARRYING VALUE
At 1 April 2023 / 26 March 2022
1,264
1,264
-
-
At 30 March 2024 / 1 April 2023
1,264
1,264
-
-
Goodwill arose on the acquisition of PV3 Technologies Ltd (now known as TFP Hydrogen Products Ltd) by Technical Fibre Products
Ltd on 18 January 2021.
The Group is required to test, on an annual basis, whether goodwill has suffered any impairment. The recoverable amount of
goodwill has been determined based on value in use calculations using cash flow projections from formally approved budgets
covering the three-year period to 31 March 2027. The discount rate used to calculate value in use was 14% and the long-term growth
rate used to calculate the terminal value was 1.8%. The value in use exceeds the carrying amount and consequently no impairment
has been suffered. There is no reasonable possible change in key assumptions that would lead to an impairment charge.
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
The tax for the period is higher (2023: higher) than the standard rate of corporation tax in the UK of 25%
(2023: 19%).
The differences are explained below:
All figures in £'000
Group
Group
Continuing operations
2024
2023
PROFIT/(LOSS) BEFORE TAX
(5,261 )
1,313
Profit/(loss) on ordinary activities multiplied by rate of corporation
(1,315 )
249
tax in the UK of 25% (2023:19%)
Effects of:
Adjustments to tax in respect of prior period
(66 )
146
Changes to tax rates
-
53
Share options
(4 )
64
Expenses not deductible for tax purposes
205
309
Deferred tax not recognised in overseas jurisdictions
(84 )
15
Other
-
(39 )
TOTAL TAX (CREDIT)/CHARGE
(1,264 )
797
9 INTANGIBLE ASSETS
Group
Computer
Development
Customer
Emission
All figures in £’000
Software
Costs Relationships
Technology Allowances
Total
COST
At 1 April 2023
4,330
457
567
359
494
6,207
Additions
229
-
-
-
736
965
Disposals/surrender of
allowances
-
-
-
-
(1,084 )
(1,084 )
Derecognition of fully
amortised assets
-
(457 )
-
-
-
(457 )
AT 30 MARCH 2024
4,559
-
567
359
146
5,631
AGGREGATE AMORTISATION
At 1 April 2023
4,020
457
126
80
-
4,683
Charge for period
104
-
55
36
-
195
Derecognition of fully
amortised assets
-
(457 )
-
-
-
(457 )
AT 30 MARCH 2024
4,124
-
181
116
-
4,421
NET BOOK VALUE AT
30 MARCH 2024
435
-
386
243
146
1,210
NET BOOK VALUE AT
1 APRIL 2023
310
-
441
279
494
1,524
104
105
Group
Computer Development
Trade
Customer
Emission
All figures in £’000
Software
Costs Secrets Relationships Technology Brands Allowances Total
COST
At 26 March 2022
4,334
457
310
567
359
31
570
6,628
Additions
231
-
-
-
-
-
3,145
3,376
Transfer to property,
plant and equipment
(6 )
-
-
-
-
-
-
(6 )
Disposals/surrender of
allowances
(229 )
-
-
-
-
-
(3,221 ) (3,450 )
Derecognition of fully
amortised assets
-
-
(310 )
-
-
(31 )
-
(341 )
AT 1 APRIL 2023
4,330
457
-
567
359
-
494
6,207
AGGREGATE AMORTISATION
At 26 March 2022
4,135
456
310
69
43
31
-
5,044
Charge for period
110
1
-
57
37
-
-
205
Transfer to property,
plant and equipment
4
-
-
-
-
-
-
4
Derecognition of fully
amortised assets
-
-
(310 )
-
-
(31 )
-
(341 )
Disposals
(229 )
-
-
-
-
-
-
(229 )
AT 1 APRIL 2023
4,020
457
-
126
80
-
-
4,683
NET BOOK VALUE
AT 1 APRIL 2023
310
-
-
441
279
-
494
1,524
NET BOOK VALUE
AT 26 MARCH 2022
199
1
-
498
316
-
570
1,584
The accompanying notes form part of the financial statements
The computer software capitalised principally relates to the ongoing development of the Group's Enterprise Resource Planning and
Financial systems.
The Emission Allowances relate to the allowances received through the UK Emissions Trading Scheme (UKETS) and are valued at
market value at the date of initial recognition. The allocated allowances are held throughout each compliance period and are used to
meet the Group’s emissions obligations.
Customer Relationships and Technology were assets acquired through the purchase of TFP Hydrogen Products Ltd by Technical
Fibre Products Ltd on 18 January 2021.
Company
All figures in £’000
Computer Software
Emission Allowances
Total
COST
At 26 March 2022
4,194
570
4,764
Additions
215
3,145
3,360
Transfer to property, plant and equipment
(6 )
-
(6 )
Disposals/surrender of allowances
(223 )
(3,221 )
(3,444 )
AT 30 MARCH 2024
4,180
494
4,674
ACCUMULATED AMORTISATION
At 26 March 2022
3,995
-
3,995
Charge for the period
110
-
110
Transfer to property, plant and equipment
4
-
4
Disposals
(223 )
-
(223 )
AT 1 APRIL 2023
3,886
-
3,886
NET BOOK VALUE AT 1 APRIL 2023
294
494
788
NET BOOK VALUE AT 26 MARCH 2022
199
570
769
Company
All figures in £’000
Computer Software
Emission Allowances
Total
COST
At 1 April 2023
4,180
494
4,674
Additions
212
736
948
Disposals/surrender of allowances
-
(1,084 )
(1,084 )
AT 30 MARCH 2024
4,392
146
4,538
ACCUMULATED AMORTISATION
At 1 April 2023
3,886
-
3,886
Charge for the period
88
-
88
AT 30 MARCH 2024
3,974
-
3,974
NET BOOK VALUE AT 30 MARCH 2024
418
146
564
NET BOOK VALUE AT 1 APRIL 2023
294
494
788
The accompanying notes form part of the financial statements
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
10 PROPERTY PLANT AND EQUIPMENT
Group
Freehold land
Plant &
Assets under
All figures in £’000
Note
& buildings
machinery
Construction1
Total
COST
At 1 April 2023
15,365 100,223
1,863 117,451
Transfers
-
67
(67 )
-
Additions at cost
75
1,843
1,302
3,220
Disposals
(91 )
(3,706 )
-
(3,797 )
Effects of movements in foreign exchange
-
(138 )
-
(138 )
AT 30 MARCH 2024
15,349
98,289
3,098
116,736
ACCUMULATED DEPRECIATION & IMPAIRMENT
At 1 April 2023
8,116 76,618
- 84,734
Charge for the period
4
348
3,146
-
3,494
Disposal
(87 )
(3,412 )
-
(3,499 )
Effects of movements in foreign exchange
-
(87 )
-
(87 )
Impairment
4
195
3,409
823
4,427
AT 30 MARCH 2024
8,572
79,674
823
89,070
NET BOOK VALUE AT 30 MARCH 2024
6,777
18,615
2,275
27,667
NET BOOK VALUE AT 1 APRIL 2023
7,249
23,605
1,863
32,717
1. Assets under construction comprise the expenditure to date on a new gas compressor and the decarbonisation programme.
106
107
The accompanying notes form part of the financial statements
During the financial period the Group, as part of the restructuring program, mothballed one of the Paper making machines. This is
shown as a disposal of £298k NBV of property, plant and equipment and the charge is an exceptional cost and is included in write-off
of assets in restructuring in the Group Statement of Comprehensive Income.
Separately to this the Group recognised an impairment loss of £4.4m in respect of the net book value of the fixed assets in its Paper
and Packaging business. The charge is an exceptional cost on the face of the Group Statement of Comprehensive Income.
The impairment has been recognised following three years of operating losses in the Group’s Paper and Packaging business as a
result of challenging market conditions. Following the impairment the recoverable amount of the fixed assets in the Paper and
Packaging business at 30 March 2024 is £12.1m. The recoverable amount is based on value in use with future cash flows discounted at
a pre-tax weighted average cost of capital of 14% which the Board believes reflects the time value of money and risks specific to the
Paper and Packaging business.
Cash flows in the Paper and Packaging cash generating unit cannot be attributed to specific assets. Therefore the impairment review
was carried out based on the CGU represented by the Paper and Packaging business as a whole.
In carrying out the impairment review the Board considered future growth rates of global paper and packaging markets. The Board
prepared forecasts for the five-year period starting on 31 March 2024 with annual revenue and EBITDA growth forecast in mid-single
digits across this period as the business’s core paper markets recover from cyclical lows and in line with forecast growth in core
packaging markets. The Group used a growth rate of 1.8% to extrapolate cash projections beyond this five-year period in line with
the OECD’s forecast long term growth rate for the UK economy. Direct input costs were forecast to increase in line with revenue and
overheads at 3% pa.
An increase of one percentage point in forecast annual revenue growth in each of the last two years of the five-year forecast
period would result in a £2.9m decrease of the impairment charge to £1.5m. A decrease of one percentage point in forecast annual
revenue growth in each of the last two years of the five-year forecast period would result in an increase in the impairment charge
of £2.9m to £7.3m. An increase of one percentage point in the discount rate to 15% would result in a £2.1m increase in the
impairment charge to £6.5m.
The accompanying notes form part of the financial statements
Group
Freehold land
Plant &
Assets under
All figures in £’000
Note
& buildings
machinery
Construction1
Total
COST
At 26 March 2022
15,243
94,250
2,896 112,389
Transfers
48
2,497
(2,545 )
-
Transfer from intangible assets
-
6
-
6
Additions at cost
74
3,681
1,512
5,267
Disposals
-
(474 )
-
(474 )
Effects of movements in foreign exchange
-
263
-
263
AT 1 APRIL 2023
15,365
100,223
1,863 117,451
ACCUMULATED DEPRECIATION
At 26 March 2022
7,970
73,868
-
81,838
Charge for period
4
347
2,718
-
3,065
Transfers
(201 )
201
-
-
Transfers to Intangible assets
-
(4 )
-
(4 )
Disposals
-
(260 )
-
(260 )
Effects of movements in foreign exchange
-
95
-
95
AT 1 APRIL 2023
8,116
76,618
-
84,734
NET BOOK VALUE AT 1 APRIL 2023
7,249
23,605
1,863
32,717
NET BOOK VALUE AT 26 MARCH 2022
7,273
20,382
2,896
30,551
Company
Freehold land
Plant &
All figures in £’000
& buildings
machinery
Total
COST
At 1 April 2023
1,782
2,740
4,522
Additions at cost
75
29
104
AT 30 MARCH 2024
1,857
2,769
4,626
ACCUMULATED DEPRECIATION
At 1 April 2023
584
2,180
2,764
Charge for period
25
141
166
AT 30 MARCH 2024
609
2,321
2,930
NET BOOK VALUE AT 30 MARCH 2024
1,248
448
1,696
NET BOOK VALUE AT 1 APRIL 2023
1,198
560
1,758
Company
Freehold land
Plant &
All figures in £’000
& buildings
machinery
Total
COST
At 26 March 2022
1,694
2,548
4,242
Transfers
14
(14 )
-
Transfers to intangible assets
-
6
6
Additions at cost
74
200
274
AT 1 APRIL 2023
1,782
2,740
4,522
ACCUMULATED DEPRECIATION
At 26 March 2022
552
2,060
2,612
Transfers
10
(10 )
-
Transfers to intangible assets
-
(4 )
(4 )
Charge for period
22
134
156
AT 1 APRIL 2023
584
2,180
2,764
NET BOOK VALUE AT 1 APRIL 2023
1,198
560
1,758
NET BOOK VALUE AT 26 MARCH 2022
1,142
488
1,630
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
1. Assets under construction comprise the expenditure to date on a new gas compressor.
108
109
The accompanying notes form part of the financial statements
11 RIGHT-OF-USE ASSETS
Plant,
Group
Land
equipment
All figures in £’000
Note
& buildings
& vehicles
Total
COST
At 1 April 2023
4,137
5,859
9,996
Additions
41
280
321
Disposals
-
(282 )
(282 )
Effects of movements in foreign exchange
(49 )
-
(49 )
AT 30 MARCH 2024
4,129
5,857
9,986
ACCUMULATED DEPRECIATION
At 1 April 2023
1,426
1,805
3,231
Charge for the period
4
422
508
930
Disposals
-
(191 )
(191 )
Effects of movements in foreign exchange
(12 )
-
(12 )
AT 30 MARCH 2024
1,836
2,122
3,958
NET BOOK VALUE AT 30 MARCH 2024
2,293
3,735
6,028
NET BOOK VALUE AT 1 APRIL 2023
2,711
4,054
6,765
Plant,
Group
Land
equipment
All figures in £’000
Note
& buildings
& vehicles
Total
COST
At 26 March 2022
3,944
5,651
9,595
Additions
26
255
281
Disposals
-
(47 )
(47 )
Effects of movements in foreign exchange
167
-
167
AT 1 APRIL 2023
4,137
5,859
9,996
ACCUMULATED DEPRECIATION
At 26 March 2022
979
1,258
2,237
Charge for the period
4
423
585
1,008
Disposals
-
(38 )
(38 )
Effects of movements in foreign exchange
24
-
24
AT 1 APRIL 2023
1,426
1,805
3,231
NET BOOK VALUE AT 1 APRIL 2023
2,711
4,054
6,765
NET BOOK VALUE AT 26 MARCH 2022
2,965
4,393
7,358
Total cash outflow of leases in the year was £1,449k (2023: £1,561k). There were no expenses relating to variable lease payments not
included in lease liabilities or expenses relating to short-term or low value assets.
The accompanying notes form part of the financial statements
Plant,
Company
equipment
All figures in £’000
& vehicles
Total
COST
At 1 April 2023
736
736
Additions
94
94
Disposals
(266 )
(266 )
AT 30 MARCH 2024
564
564
ACCUMULATED DEPRECIATION
At 1 April 2023
334
334
Charge for the period
137
137
Disposals
(177 )
(177 )
AT 30 MARCH 2024
294
294
NET BOOK VALUE AT 30 MARCH 2024
270
270
BOOK VALUE AT 1 APRIL 2023
402
402
Plant,
Company
equipment
All figures in £’000
& vehicles
Total
COST
At 26 March 2022
538
538
Additions
245
245
Disposals
(47 )
(47 )
AT 1 APRIL 2023
736
736
ACCUMULATED DEPRECIATION
At 26 March 2022
195
195
Charge for the period
177
177
Disposals
(38 )
(38 )
AT 1 APRIL 2023
334
334
NET BOOK VALUE AT 1 APRIL 2023
402
402
NET BOOK VALUE AT 26 MARCH 2022
343
343
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
110
111
The accompanying notes form part of the financial statements
Registered % holding
Direct or
Country of
office ordinary
indirect
Company Name
incorporation
(see below)
shares
holding
Nature of business
James Cropper Speciality
England
(i)
100
Direct
Manufacturer of specialist
Papers Limited
paper and board
James Cropper (Guangzhou)
China
(iii)
100
Indirect
Sales and marketing
Trading Co Limited
organisation
James Cropper Converting Limited
England
(i)
100
Direct
Paper converter
James Cropper 3D Products Limited
England
(i)
100
Direct
Manufacturer of
moulded fibre products
Technical Fibre Products Limited
England
(i)
100
Direct
Manufacturer of
advanced materials
TFP Hydrogen Products Limited
England
(i)
100
Indirect
Manufacturer of
electrochemical materials
Tech Fibers Inc
USA
(ii)
100
Indirect
Holding company
Technical Fibre Products Inc
USA
(ii)
100
Indirect
Sales and marketing
organisation
Metal Coated Fibers Inc
USA
(ii)
100
Indirect
Manufacturer of metal
coated carbon fibres
Electro Fiber Technologies LLC
USA
(ii)
100
Indirect
Manufacturer of metal
coated fibres
James Cropper EBT Limited
England
(i)
100
Direct
Dormant company
Melmore Limited
England
(i)
100
Direct
Dormant company
James Cropper Paper Limited
England
(i)
100
Direct
Dormant company
The Paper Mill Shop
England
(i)
100
Direct
Dormant company
Company Limited
James Cropper Overseas
England
(i)
100
Direct
Marketing organisation
Trading Limited
James Cropper Germany GmbH
Germany
(iv)
100
Indirect
Dormant company
12 INVESTMENTS IN SUBSIDIARY UNDERTAKINGS
Company
All figures in £’000
2024
2023
At cost
7,350
7,350
Less: provision for impairment
(5,000 )
-
At 30 March 2024 / 1 April 2023
2,350
7,350
i.
Burneside Mills, Kendal, Cumbria, England, LA9 6PZ
ii.
679 Mariaville Road, Schenectady, NY 12306, USA
iii. Level 54 Guangzhou IFC, 5 Zhujiang Road West, Zhujiang New Town, China
iv. c/o DWF Germany Rechtsanwaltsgesellschaft mbH, Habsburgerring 2, 50674 Koln, Germany.
13 AMOUNTS OWED BY THE GROUP UNDERTAKINGS
All figures in £'000
2024
2023 Restated
Amounts owed by Group undertakings
50,023
40,867
Less: Provision for impairment of loans
(18,021 )
-
Amounts owed by Group undertakings – net
32,002
40,867
Amounts owed by Group undertakings include loans of £26,000k (2023: £26,000k) with a fixed term of one year with an interest
charge of 6.25% (2023: 3.2%) per annum and intercompany funding accounts of £24,023k (2023: £20,867k). A provision for impair-
ment of £16,000k has been raised against the intercompany loans and £2,021k against the intercompany funding accounts.
The comparative has been restated as referred to in note 29.
Investments in subsidiary undertakings are stated at cost less provision for impairment. During the year, given that the operating
losses in the James Cropper Speciality Papers Limited (JCSP) over the past 3 years are a potential indicator of impairment, an im-
pairment review was performed, as a result of which the investment in JCSP was impaired to nil.
A list of principal subsidiary undertakings is given below:
14 OTHER FINANCIAL ASSETS
All figures in £’000
2024
2023
2024
2023
Interest Rate Cap
819
1,082
819
1,082
Non-current asset
341
654
341
654
Current asset
478
428
478
428
Inventories are stated after a provision for impairment of £1,301k (2023: £1,576k).
The total cost of inventories recognised in the Group Statement of Comprehensive Income for the year ended 30 March 2024,
including direct and overhead costs absorbed into the cost of goods sold, was £60,873k (2023: £93,383k). These costs are included in
the Group Statement of Comprehensive Income in raw materials and consumables used, changes in inventories of finished goods
and work in progress, energy costs, employee benefit costs and other expenses.
The Company does not hold any inventories.
15 INVENTORIES
Group
Group
All figures in £’000
2024
2023
Materials
7,504
7,251
Work in progress
1,996
2,677
Finished goods
6,296
8,376
15,796
18,304
The loss arising in the Statement of Comprehensive Income on fair value hedging instruments was £56k (2023: £143k). The net (loss) /
gain arising in the Statement of Other Comprehensive Income on fair value hedging instruments was £(207)k (2023: £737k).
The accompanying notes form part of the financial statements
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
Company
Company
Group
112
113
17 TRADE AND OTHER PAYABLES
Group
Group
Company
Company
All figures in £'000
2024
2023
2024
2023
Trade payables
6,554
11,188
983
1,179
Amounts owed to group undertakings
-
-
4,366
3,960
Other tax and social security payable
662
673
144
141
Other payables
339
1,114
243
935
Accruals
6,752
7,881
1,160
1,249
Contingent consideration1
1,263
250
-
-
DUE WITHIN ONE YEAR
15,570
21,106
6,896
7,464
The fair values of trade and other payables approximate to their carrying values.
16 TRADE AND OTHER RECEIVABLES
Group
Group
Company
Company
2024
2023
2024
2023
All figures in £’000
restated
Trade receivables
15,278
21,646
-
-
Less: Provision for impairment of receivables
(513 )
(643 )
-
-
Trade receivables – net
14,765
21,003
-
-
Amounts owed by Group undertakings
-
-
1,749
11,330
Other receivables
207
914
201
910
Prepayments
2,238
2,203
1,325
884
17,210
24,120
3,275
13,124
The carrying value of trade and other receivables classified at amortised cost approximates to fair value.
The Group does not hold any collateral as security.
The Group applies the IFRS 9 simplified approach to measuring expected credit losses using a lifetime expected credit loss provision
for trade receivables. To measure expected credit losses on a collective basis, trade receivables are grouped based on similar credit
risk and ageing.
The expected loss rates are based on the Group’s historic credit losses experienced. The historic loss rates are then adjusted for
current and forward-looking information on macroeconomic factors affecting the Group’s customers. The Group has identified
the current state of the economy and industry specific factors as the key factors in the countries where the Group operates.
As disclosed in note 29, certain amounts owed by group undertakings have been reclassified to non-current assets, as it is the
expectation that these will be settled in over one year.
CONTINGENT CONSIDERATION
Group
Group
All figures in £'000
Note
2024
2023
Balance as at 1 April 2023 / 26 March 2022
1,673
828
Payments made
(250 )
(250 )
Earn out adjustment based on performance in period
4
(422 )
986
Fair value adjustment
3
262
109
Balance at 30 March 2024 / 1 April 2023
1,263
1,673
DUE AFTER ONE YEAR
-
1,423
DUE WITHIN ONE YEAR
1,263
250
1.
Contingent consideration is the fair value of earn out considerations on the acquisition of PV3 Technologies Ltd (now known
as TFP Hydrogen Products Ltd) that was based on the estimated future performance of the subsidiary against earn out targets.
The actual performance of TFP Hydrogen Products for the period ended 30 March 2024 fell short of expectations (1 April 2023:
exceeded expectations), resulting in a decrease (1 April 2023: increase) in the contingent consideration due. The earn out period
ended on 30 March 2024. The liability disclosed as at 30 March 2024 will be settled within one year.
18 OTHER FINANCIAL LIABILITIES
Group and Company
All figures in £’000
Note
2024
2023
Foreign exchange rate swaps for hedging
20
-
58
Current liabilities
-
58
The liabilities are held at fair value. The net gain / (loss) arising in the Statement of Other Comprehensive Income on fair value
hedging instruments was £58k (2023: loss of £(52)k).
The accompanying notes form part of the financial statements
19 BORROWINGS
All figures in £'000
Note
2024
2023
2024
2023
CURRENT
Bank loans and overdrafts due within one year or on demand:
Unsecured bank loans1
537
464
30
68
Lease liabilities
1,073
1,294
125
149
20.3
1,610
1,758
155
217
NON-CURRENT LOANS
Unsecured bank loans1
18,377
16,933
14,825
12,797
Lease liabilities
4,761
5,582
119
222
20.3
23,138
22,515
14,944
13,019
The accompanying notes form part of the financial statements
1. The bank loans bear interest at rates of SONIA + 1.95% and SOFRA + 2.75%.
RECONCILIATION OF NET CASH FLOW TO NET DEBT
Group
30
1 April
Cash
Non-cash
Finance
Interest
Exchange
March
All figures in £'000
2023
flow additions
costs
paid Reclassify
movement
2024
Loans repayable
within 1 year
464
(429 )
-
1,462
(1,431 )
471
-
537
Loans repayable
after 1 year
16,933
2,000
-
-
-
(471 )
(85 )
18,377
17,397
1,571
-
1,462
(1,431 )
-
(85 )
18,914
Lease liabilities
repayable within 1 year 1,294
(1,449 )
-
219
(84 )
1,093
-
1,073
Lease liabilities
repayable after 1 year
5,582
-
321
-
-
(1,093 )
(49 )
4,761
6,876
(1,449 )
321
219
(84 )
-
(49 )
5,834
Total borrowings
24,273
122
321
1,681
(1,515 )
-
(134 )
24,748
Cash and cash
equivalents
7,679
1,372
-
-
-
-
160
9,211
NET DEBT
16,594
(1,250 )
321
1,681
(1,515 )
-
(294 )
15,537
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
Group
Company
114
115
The accompanying notes form part of the financial statements
The accompanying notes form part of the financial statements
20 FINANCIAL INSTRUMENTS AND RISK
The Group has exposure to the following risks from its use of financial instruments: Credit risk, Liquidity risk, Currency risk and
Interest rate risk. This note presents information about the fair value of the Group’s financial instruments, the Group’s exposure to
each of the risks noted and the Group’s objectives, policies and processes for measuring and managing risk. The Board has overall
responsibility for the risk management strategy and coordinates activity across the Group. This responsibility is discussed further
in the Directors’ report. Exposure to the financial risks noted arise in the normal course of the Group’s business.
20.1 FINANCIAL INSTRUMENTS BY CATEGORY
The fair values of the financial assets and liabilities of the Group are as follows:
Fair value through Amortised cost
Group
profit or loss
loans and receivables
All figures in £'000
Note
2024
2023
2024
2023
FINANCIAL ASSETS
NON-CURRENT
Other financial assets
14
341
654
-
-
341
654
-
-
CURRENT
Trade receivables
16
-
-
14,765
21,003
Other receivables
16
-
-
207
914
Other financial assets - Derivatives
14
478
428
-
-
Cash and cash equivalents
-
-
9,211
7,679
478
428
24,183
29,596
FINANCIAL LIABILITIES
CURRENT
Trade payables
17
-
-
6,554
11,188
Other payables
17
-
-
339
1,114
Accruals
17
-
-
6,752
7,881
Contingent consideration
17
1,263
250
-
-
Other financial liabilities - Derivatives
18
-
58
-
-
Loans and borrowings
19
-
-
1,610
1,758
1,263
308
15,255
21,941
NON-CURRENT
Loans and borrowings
19
-
-
23,138
22,515
Contingent consideration
17
-
1,423
-
-
-
1,423
23,138
22,515
The fair values of the financial assets and liabilities of the Company are as follows:
Fair value through Amortised cost
Company
profit or loss
loans and receivables
Note
2024
2023
2024
2023
All figures in £'000
restated
FINANCIAL ASSETS
NON-CURRENT
Amounts owed by Group undertakings
13
-
-
32,002
40,867
Other financial assets
14
341
654
-
-
341
654
32,002
40,867
CURRENT
Amounts owed by Group undertakings
16
-
-
1,749
11,330
Other receivables
16
-
-
201
910
Other financial assets - Derivatives
14
478
428
-
-
Cash and cash equivalents
-
-
5,021
3,506
478
428
6,971
15,746
FINANCIAL LIABILITIES
CURRENT
Trade payables
17
-
-
983
1,179
Amounts owed to Group undertakings
17
-
-
4,366
3,960
Other payables
17
-
-
243
935
Accruals
17
-
-
1,160
1,249
Other financial liabilities - Derivatives
18
-
58
-
-
Loans and borrowings
19
-
-
155
217
-
58
6,907
7,540
NON-CURRENT
Loans and borrowings
19
-
-
14,944
13,019
Financial instruments not measured at fair value include cash and cash equivalents, trade and other receivables, trade and other
payables, and loans and borrowings. Due to their short-term nature, the carrying values of cash and cash equivalents, trade and
other receivables, and trade and other payables approximates to their fair value. The table below analyses financial instruments
carried at fair value, by valuation method.
Fair value estimates of derivatives are based on relevant market information and using widely accepted valuation techniques
including discounted cash flow analysis on the expected cash flows for each derivative. This analysis reflects the contractual terms
of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves, spot
and forward rates, as well as option volatility. To comply with the provisions of IFRS 13, the Company incorporates credit valuation
adjustments to appropriately reflect both its own non-performance risk and the respective counterparty’s non-performance risk in
the fair value measurements. In adjusting the fair value of its derivative contracts for the effect of non-performance risk, the
Company has considered the impact of netting and any applicable credit enhancements such as collateral postings, thresholds,
mutual puts and guarantees.
2024
2024
2023
2023
All figures in £'000
Level 2
Total
Level 2
Total
FINANCIAL ASSETS (GROUP AND COMPANY)
Derivatives
819
819
1,082
1,082
FINANCIAL LIABILITIES (GROUP AND COMPANY)
Derivatives
-
-
58
58
The table below summarises the risk management exposure to fluctuations in reasonably possible changes in underlying
benchmark prices, with all other variables held.
Total value
All figures in £'000
-100 bps
-50 bps
+0 bps
+50 bps
+100 bps
FINANCIAL ASSETS (GROUP AND COMPANY)
Derivatives
565
692
819
946
1,073
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
116
117
The accompanying notes form part of the financial statements
20.2 CREDIT RISK
Credit risk is the risk of financial loss to the Group if a customer or counterparty fails to meet its contractual obligations. The Group is
exposed to credit risk from financial assets including cash and cash equivalents held at banks, and trade and other receivables. Credit
risk arising from the Group’s normal commercial activities are controlled by individual business units operating in accordance with
Group policies and procedures. The credit risk in respect of cash balances held by banks is managed by only engaging with major
reputable financial institutions. Exposure to credit risk arises from the potential for a customer to default on their invoiced sales. Some
of the Group’s businesses have credit insurance in place. For uninsured customers, the financial strength and credit worthiness of the
customer is assessed based on a variety of internal and external information. Specific credit risk controls that match the risk profile of
customers are applied. Ongoing credit risk is managed through regular review of ageing analysis, together with credit limits for each
customer. Trade receivables consist of a large number of customers in various industries and geographical areas. The Group does not
hold any collateral relating to other financial assets at each annual reporting date.
Trade receivables as at the reporting date were:
Group
All figures in £'000
2024
2023
JC Speciality Papers
8,053
11,408
JC Converting
1,393
2,032
JC 3D Products
1,252
1,112
Technical Fibre Products
4,580
7,094
Trade receivables
15,278
21,646
Provision for impairment on trade receivables
(513 )
(643 )
14,765
21,003
The Company does not have trade receivables.
PROVISION FOR IMPAIRMENT – GROUP
The majority of trade receivables are covered by credit insurance. All trade receivables have been reviewed under the expected
credit loss impairment model and a provision of £513k (2023: £643k) has been recorded accordingly. The Group applies the IFRS 9
simplified approach to measuring expected credit losses using a lifetime expected credit loss provision for trade receivables. The
expected loss rates are based on the Group’s historic credit losses experienced. The historic loss rates are then adjusted for current
and forward-looking information on macro-economic factors affecting the Group’s customers. The Group has identified gross
domestic product (GDP) and unemployment rates of the countries in which the customers are domiciled to be the most relevant
factors and accordingly adjusts historic loss rates for expected changes in these factors. Trade receivables are written off when
there is no reasonable expectation of recovery.
On the above basis the expected credit loss for trade receivables as at the reporting date was determined as follows:
2024
Trade Receivables days past due
More than
More than
More than
All figures in £'000
Current
30 days
60 days
90 days
Total
Expected credit loss rate
1%
18%
0%
61%
3%
Gross carrying amount
14,106
768
86
318
15,278
Lifetime expected credit loss
177
141
-
195
513
2023
Trade Receivables days past due
More than
More than
More than
All figures in £'000
Current
30 days
60 days
90 days
Total
Expected credit loss rate
1%
6%
24%
48%
3%
Gross carrying amount
19,046
1,990
212
398
21,646
Lifetime expected credit loss
277
123
50
193
643
The accompanying notes form part of the financial statements
Movements in provision for impairment on trade receivables are as follows:
Group
All figures in £'000
2024
2023
At 1 April 2023 / 26 March 2022
643
777
Decrease during the period
(130 )
(134 )
At 30 March 2024 / 1 April 2023
513
643
PROVISION FOR IMPAIRMENT – COMPANY
Intra-group loan receivables are as follows:
Group
All figures in £'000
2024
2023
James Cropper Speciality Papers Limited
12,000
12,000
James Cropper Converting Limited
3,000
3,000
James Cropper 3D Products Limited
4,000
4,000
Technical Fibre Products Limited
7,000
7,000
26,000
26,000
Lifetime expected credit loss
(16,000 )
-
Net Intra-group loans
10,000
26,000
The movement in the lifetime expected credit loss on intra-group loan receivables during the year was as follows:
Company
All figures in £'000
2024
2023
At 1 April 2023 / 26 March 2022
-
-
Charged during the period
16,000
-
At 30 March 2024 / 1 April 2023
16,000
-
A further provision of £2,021k was recognised against the intercompany funding accounts in the year.
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
118
119
BORROWING FACILITIES
The Group has the following undrawn committed borrowing facilities available at the reporting date:
Group
All figures in £'000
2024 Floating rate 2023 Floating rate
Expiring within one year
13,500
3,500
Expiring after one year
-
12,000
At the end of the financial period £10m was available under the Group's UK loan facility. On 14 June 2024, as a condition of resetting
the bank covenants on this facility, the Group agreed to not make further drawdowns on the facility until March 2025.
The Group’s expiry profile of the drawn down facilities is as follows:
Group
Group
Company
Company
All figures in £'000
2024
2023
2024
2023
March 2024
-
435
-
42
March 2025
507
513
-
-
March 2026
3,627
3,234
3,000
2,600
March 2027
5,925
5,560
3,000
2,600
March 2028
3,000
2,600
3,000
2,600
March 2029
3,000
2,600
3,000
2,600
March 2030
3,000
2,600
3,000
2,600
19,059
17,542
15,000
13,042
The accompanying notes form part of the financial statements
20.3 LIQUIDITY RISK
Liquidity risk is the risk that the Group will not have sufficient funds to meet liabilities. The Group’s policy is to maintain a mix of
short, medium and long term borrowings with a number of banks. Short term flexibility is achieved through overdraft facilities.
CURRENT AND NON-CURRENT FINANCIAL LIABILITIES
The maturity profile of the carrying amount of the current and non-current financial liabilities at the reporting date was as follows:
Group
2024
2023
Lease
Lease
All figures in £'000
Debt
liabilities Derivatives Total
Debt
liabilities Derivatives
Total
In less than one year
572
1,266
- 1,838
498
1,344
58
1,900
In more than one year but
not more than two years
3,626
954
- 4,580
517
1,062
-
1,579
In more than two years but
not more than five years 11,925
2,388
- 14,313
11,418
2,447
- 13,865
In more than five years
3,000
2,128
- 5,128
5,200
2,694
-
7,894
19,123
6,736
- 25,859
17,633
7,547
58 25,238
Company
2024
2023
Lease
Lease
All figures in £'000
Debt
liabilities Derivatives Total
Debt
liabilities Derivatives
Total
In less than one year
64
140
-
204
102
160
58
320
In more than one year but
not more than two years
3,000
87
- 3,087
-
137
-
137
In more than two years but
not more than five years
9,000
56
- 9,056
7,800
92
-
7,892
In more than five years
3,000
-
- 3,000
5,200
-
-
5,200
15,064
283
- 15,347
13,102
389
58 13,549
TRADE PAYABLES
Trade payables at the reporting date were:
Group
Group
Company
Company
All figures in £'000
2024
2023
2024
2023
Trade payables
6,554
11,188
983
1,179
Total contractual cash flows
6,554
11,188
983
1,179
20.4 CURRENCY RISK
The Group publishes its consolidated financial statements in pounds sterling and has subsidiaries that operate in the United States of
America, Europe and China. In addition, the group trades with certain debtors and creditors in foreign currencies. As a result, it is subject
to foreign currency exchange risk arising from exchange rate movements which will be reflected in the Group’s transaction costs.
The Group is exposed to foreign exchange risks primarily with respect to US Dollars and the Euro. Where possible, the Group
maintains a policy of balancing sales and purchases denominated in foreign currencies. Where an imbalance remains, the group
has entered into certain forward exchange contracts.
Represented below is the net exposure to foreign currencies, reported in pounds sterling, and arising from all Group activities,
at the reporting date.
The accompanying notes form part of the financial statements
2024
Group
Local
All figures in £'000
USD
Euro
Other
Currency
Total
Trade Receivables
2,357
3,748
21
8,639
14,765
Trade Payables
2,382
1,195
6
2,971
6,554
Net exposure
(25 )
2,553
15
5,668
8,211
2023
Group
Local
All figures in £'000
USD
Euro
Other
Currency
Total
Trade Receivables
4,342
5,034
84
11,543
21,003
Trade Payables
2,243
1,989 4
6,952
11,188
Net exposure
2,099
3,045
80
4,591
9,815
This represents the net exposure to foreign currencies, reported in pounds Sterling, and arising from all Group activities.
At the reporting date, the Company's exposure to foreign currency risk was as follows:
2024
Company
Local
All figures in £'000
USD
Euro
Other
Currency
Total
Trade Receivables
-
-
-
-
-
Trade Payables
5
15
-
983
983
Net exposure
(5 )
(15 )
-
(983 )
(983 )
2023
Company
Local
All figures in £'000
USD
Euro
Other
Currency
Total
Trade Receivables
-
-
-
-
-
Trade Payables
16
8
-
1,155
1,179
Net exposure
(16 )
(8 )
-
(1,155 )
(1,179 )
A one percent strengthening of the pound against the Euro and the US Dollar at the reporting date would have had the following
impact on profit.
Impact on profit
Group
Group
Company
Company
All figures in £'000
2024
2023
2024
2023
USD
-
(23 )
-
-
Euro
(25)
(34 )
-
-
This sensitivity analysis is indicative only and it should be noted that the Group’s exposure to such market rate changes is
continually changing. The calculations assume all other variables remain constant.
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
120
121
The accompanying notes form part of the financial statements
20.5 INTEREST RATE RISK
Interest rate risk derives from the Group’s exposure to changes in the value of an asset or liability or future cash flow as a result of
changes in interest rates. The Group finances its operations through a mixture of retained profit and bank borrowings. The Group
borrows in the desired currencies at fixed or floating rates of interest.
The net exposure to interest rates, measured on variable rate debt instruments, at the reporting date is summarised below.
Group
Group
Company
Company
All figures presented in £'000
2024
2023
2024
2023
Interest-bearing liabilities -
floating Borrowings
18,914
17,396
14,855 12,866
Interest-bearing liabilities -
fixed Lease liabilities
5,834 6,877
244
370
Interest-bearing liabilities
24,748
24,273
15,099
13,236
The effective interest rates at the reporting date were as follows:
2024
2023
%
%
Borrowings
4.3
4.3
The sensitivity analysis below assumes a 100 basis point change in interest rates from their levels at the reporting date, with all other
variables held constant. A 1% rise in interest rates would result in an additional £41k interest expense for the Group and £nil for the
Company. The impact of a decrease in rates would be an equivalent reduction in the annual charge.
Group
Group
Company
Company
All figures presented in £'000
2024
2023
2024
2023
Statement of comprehensive income
41
43
-
-
20.6 DERIVATIVE CONTRACTS
GROUP AND COMPANY
The accompanying notes form part of the financial statements
DERIVATIVE ASSETS
All figures in £'000
2024
2023
Derivatives designated as hedging instruments
Interest rate cap
819
1,082
Total derivatives designated as hedging instruments
819
1,082
Total derivative financial assets
819
1,082
Non-current portion
341
654
Current portion
478
428
DERIVATIVE LIABILITIES
All figures in £'000
2024
2023
Derivatives designated as hedging instruments
Forward foreign exchange contracts
-
58
Total derivatives designated as hedging instruments
-
58
Total derivative financial liabilities
-
58
Current portion
-
58
The Group has elected to adopt the hedge accounting requirements of IFRS 9 Financial Instruments. The Group enters into hedge
relationships where the critical terms of the hedging instrument and the hedged item match. The Group performs a qualitative
assessment at the origination of the hedge to determine its prospective effectiveness. Quantitative effectiveness tests are
performed at each period end to determine the continuing effectiveness of the relationship. Where changes occur to the hedged
item which result in the critical terms no longer matching, the hypothetical derivative method is used to assess effectiveness.
CASH FLOW INTEREST RATE CAP
The Group has entered into a SONIA interest rate cap, with an effective date of 28 March 2022 that runs until 30 March 2026, to
manage exposure to interest rate fluctuations. The Group has a floating rate liability with an interest profile linked to SONIA
compounded in arrears. The Cap is set at 1.5% per annum on a notional £15,000,000. The Cap helps to protect the Group from the
risk of interest rates rising above the Cap Rate, limiting the Group’s exposure to higher interest rates.
The effects of the cash flow interest rate swap hedging relationships are as follows at the reporting date:
GROUP AND COMPANY
All figures in £'000
2024
2023
Carrying amount of the derivatives
819
1,082
Change in fair value of the designated hedging instrument
(263 )
1,082
Notional amount
15,000
15,000
Maturity date
30 March 2026
30 March 2026
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
122
123
The accompanying notes form part of the financial statements
CASH FLOW FORWARD FOREIGN EXCHANGE CONTRACTS
Foreign exchange risk arises when the Group enters into transactions denominated in a currency other than its functional currency.
Where the risk to the Group is considered to be significant, Group treasury will enter into a matching forward foreign exchange
contract with a reputable bank.
The hedged forecast transactions denominated in foreign currency are expected to occur at various dates in the 12 months after the
period end. Gains and losses on the effective element of forward foreign exchange contracts at the reporting date are recognised in
the Group Statement of Comprehensive Income and tracked separately in the period or periods during which the hedged forecast
transactions affects the Group Statement of Comprehensive Income. This is expected to be within 12 months of the end of the
financial year in respect of the forward currency contracts taken out at the reporting date.
No ineffective portion of the forward foreign exchange contract was recognised in the Group Statement of Comprehensive Income
in the period.
The effects of the cash flow forward foreign exchange contract hedging relationships are as follows at the reporting date:
GROUP AND COMPANY
All figures in £'000
2024
2023
Carrying amount of the derivatives
-
58
Change in fair value of the designated hedging instrument
(58 )
52
Change in fair value of the designated hedged item
58
(52 )
Notional amount
-
12,032
Maturity date
-
18 March 2024
21 RETIREMENT BENEFITS
The Group operates a number of pension schemes. Two of these schemes, the James Cropper PLC Works Pension Plan (“Works
Scheme”) and the James Cropper PLC Pension Scheme (“Staff Scheme”) are funded defined benefit schemes. The Group also operates
a defined contribution scheme and makes contributions to personal pension plans for its employees in the USA.
Pension costs for the defined contribution scheme and personal pension contributions are as follows:
All figures in £'000
2024
2023
Defined contribution schemes
935
905
Personal pension contributions
76
97
The accompanying notes form part of the financial statements
Other pension costs totalled £861k (2023: £731k) and represent life assurance charges, government pension protection fund levies
and other current service costs.
DEFINED BENEFIT PLANS
With effect from 1 April 2011 active members’ benefits were reduced such that future increases in pensionable salaries were
restricted to a cap of 2% per annum. As from 1 April 2017 (Works Scheme) and 1 July 2017 (Staff Scheme) increases in pension once it is
in-payment will be in line with the annual increase in CPI.
The Staff and Works Schemes remain defined benefit schemes but they are no longer “final salary” schemes. The most recent
actuarial valuations of the Staff Scheme and the Works Scheme were undertaken in 2022 by qualified independent actuaries. The
major assumptions used by the actuary for each scheme were as noted below. The expected return on plan assets is calculated by
using a weighted average across each category of asset:
All figures in %
2024
2023
2024
2023
CPI Inflation assumption
2.85
2.95
2.85
2.95
RPI Inflation assumption
3.25
3.40
3.20
3.35
Rate of increase in pensionable salaries
1.70
1.70
1.65
1.70
Discount rate
5.00
4.85
5.05
4.90
Pension increases for in-payment benefits capped at 5%, with a 3% floor
3.65
3.75
3.45
3.50
Pension increases for in-payment benefits capped at 2.5%, with a 0% floor
2.10
2.15
2.10
2.15
Staff Scheme
Works Scheme
The mortality assumptions have been set in line with the best-estimate results of the Medically Underwritten Mortality study
carried out by Morgan Ash as part of the 2019 valuations (with no detailed mortality analysis performed as part of the 2022
valuations).
In respect of mortality for the Works members the assumptions adopted are 135% of the SAPS “S3” series table, with future
improvements in line with the CMI core 2022 projection model with long-term trend improvements of 1.25% pa.
For the Staff members the SAPS “S3” series table with a 135% rating has been used, with future improvements in line with the CMI
core 2022 projection model with long term trend improvements of 1.25% pa.
The long-term expected rate of return on cash is determined by reference to bank base rates at the SFP dates. The long-term
expected return on bonds is determined by reference to UK long dated government and corporate bond yields at the reporting date.
The long-term expected rate of return on equities is based on the rate of return on bonds with an allowance for out-performance.
The method adopted for determining the discount rate has been selected as the most appropriate following specialist advice and the
discount rate has been calculated based on a yield curve of an appropriate duration to the schemes’ liabilities.
Pension payments are not expected to peak until 2040, and expected to continue until 2080.
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
124
125
The accompanying notes form part of the financial statements
All figures in £'000
2024
2023
2022
2021
2020
Defined benefit obligation (“DBO”)
(87,020 )
(89,305 )
(121,651 )
(136,140 )
(121,470 )
Fair value of assets (“FVA”)
69,727
73,165
109,909
117,704
113,968
Deficit
(17,293 )
(16,140 )
(11,742 )
(18,436 )
(7,502 )
Effect of limit on recoverable surplus
-
-
(1,388 )
-
(1,880 )
Net liability recognised in the SFP
(17,293 )
(16,140 )
(13,130 )
(18,436 )
(9,382 )
Staff scheme
(3,558 )
(2,144 )
1,623
(1,383 )
1,880
Works scheme
(13,735 )
(13,996 )
(13,365 )
(17,053 )
(9,382 )
Deficit
(17,293 )
(16,140 )
(11,742 )
(18,436 )
(7,502 )
Effect of limit on recoverable surplus
-
-
(1,388 )
-
(1,880 )
Net liability recognised in the SFP
(17,293 )
(16,140 )
(13,130 )
(18,436 )
(9,382 )
Overall, the combined funding position on an IAS19 measure for both schemes has worsened over the year from a deficit of £16,140k
to a deficit of £17,293k. The mean term of the liabilities at the reporting date was 11 years for the Staff scheme (2023: 11 years) and 14
years for the Works scheme (2023: 14 years). The Group is aware of the High Court ruling in the case of Virgin Media v NTL Trustees II
Limited and is waiting for the outcome of the appeal, scheduled for later in 2024, and any additional hearings, as well as
confirmation from the Government as to whether it will issue new regulations in response to this issue.
The key risks relating to the pension schemes can be found in the Pension Report on pages 36 to 38.
The fair value of the plan assets comprises the following categories of asset in the stated proportions:
All figures in %
2024
2023
2024
2023
Managed Growth
62.9
58.9
61.8
58.6
Annuities
3.6
3.5
1.0
1.0
Cash
4.6
2.9
3.8
2.5
Matching Assets
28.9
34.7
33.4
37.9
Staff Scheme
Works Scheme
The pension plan assets do not include any investments in the shares of the Company (2023: nil).
Apart from the annuities and cash, the assets of the schemes are held in an unquoted investment fund managed by the schemes’
fiduciary manager and comprising combinations of the above assets. Within those funds, the indirect equity exposures are
predominantly quoted. The Matching Assets comprises holdings of cash and swaps, designed to match the sensitivity of the schemes
liabilities to movements in long term interest rates and inflation expectations.
The amounts recognised in the Statement of Comprehensive Income are as follows:
All figures in £'000
2024
2023
Total included within employee benefit costs - current service costs,
past service costs and administrative costs
428
974
Interest income on plan assets
(3,494 )
(2,954 )
Interest cost on defined benefit obligation
4,247
3,261
Interest cost on irrecoverable surplus
-
38
Total included within interest
753
345
Total
1,181
1,319
Analysis of the movement in the Statement of Financial Position liability:
All figures in £'000
2024
2023
At 1 April 2023 / 26 March 2022
(16,140 )
(13,130 )
Total expense as above
(1,181 )
(1,319 )
Contributions paid
1,815
2,197
Actuarial losses recognised in Other Comprehensive Income
(1,787 )
(3,888 )
At 30 March 2024 / 1 April 2023
(17,293 )
(16,140 )
The accompanying notes form part of the financial statements
The actual return on plan assets was £277k deficit (2023: £32,849k deficit).
Following the April 2022 triennial valuations, a deficit recovery plan was agreed with the Trustees with a schedule of contributions
which includes additional contributions of £1.2m per annum to the Works scheme until 31 December 2034 and additional annual
contributions of £71k to the Staff scheme. The minimum funding requirement does not give rise to an additional liability under
IFRIC 14.
The cumulative amount of actuarial losses recognised in the Statement of Comprehensive Income, since the adoption of IAS 19, are
£17,823k (2023: £16,036k).
2024
2023
Works
Works
Staff
Staff
Works
Works
Staff Staff
Scheme
Scheme
Scheme Scheme
Scheme Scheme Scheme Scheme
All figures in £'000
FVA
DBO
FVA
DBO
FVA
DBO
FVA
DBO
At 1 April 2023 / 26 March 2022
38,608
(52,604 )
34,557 (36,701 )
59,763 (73,128 ) 50,146 (48,523 )
Interest income on plan assets
1,861
-
1,633
-
1,600
-
1,354
-
Current service costs
-
(353 )
-
(75 )
-
(772 )
-
(202 )
Benefits paid
(3,204 )
3,204
(2,088 )
2,088
(4,097 )
4,097
(2,324 )
2,324
Contributions by plan participants
241
(241 )
63
(63 )
257
(257 )
72
(72 )
Employer contributions
1,627
-
188
-
1,739
-
458
-
Interest cost on the DBO
-
(2,514 )
- (1,733 )
-
(1,955 )
- (1,306 )
Return on plan assets
(1,886 )
-
(1,873 )
-
(20,654 )
- (15,149 )
-
Actuarial gain on DBO
-
1,526
-
446
-
19,411
- 11,078
At 30 March 2024 / 1 April 2023
37,247
(50,982 )
32,480 (36,038 )
38,608 (52,604 ) 34,557 (36,701 )
EXPERIENCE ADJUSTMENTS
All figures in £'000
2024
2023
2022
2021
2020
Arising on plan assets
(3,759 )
(35,803 )
(5,356 )
5,669
2,693
Percentage of scheme assets
(5.39% )
(48.93% )
(4.87% )
4.82 %
2.36 %
Arising on plan liabilities
1,972
30,489
11,521
(14,419 )
12,244
Percentage of scheme liabilities
2.27%
34.14 %
9.47 %
(10.59% )
10.08 %
SENSITIVITY ANALYSES
The sensitivity analyses below has been determined based on reasonable possible changes to the respective assumptions made at the
end of the reporting period, while holding all other assumptions constant. The sensitivity analyses may not be representative of the
actual changes in the net retirement benefits as it is unlikely that the changes in assumptions would occur in isolation of one another.
Staff Scheme
Current assumption
Sensitivity
£’000
Effect on DBO
Discount rate
5.0% p.a.
0.25% decrease
994
+2.8 %
Price inflation
3.25% p.a. (RPI )
0.25% increase
257
+0.7 %
Mortality
135% of SAPS “S3”
Increase in life expectancy
series table
of 1 year
1,635
+4.5 %
Works Scheme
Current assumption
Sensitivity
£’000
Effect on DBO
Discount rate
5.05% p.a.
0.25% decrease
1,699
+3.3 %
Price inflation
3.20% p.a. (RPI )
0.25% increase
424
+0.8 %
Mortality
135% of SAPS “S3”
Increase in life expectancy
series table
of 1 year
2,075
+4.1 %
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
The amounts recognised in the Statement of Financial Position (“SFP”) are determined as follows:
126
127
The accompanying notes form part of the financial statements
22 DEFERRED TAXATION
The movement on the deferred tax account is shown below:
Group
Group
Company
Company
All figures in £'000
2024
2023
2024
2023
At 1 April 2023 / 26 March 2022
795
141
4,006
3,336
Credit to other comprehensive income
447
972
447
972
Credit / (charge) to equity
6
(10 )
2
(10 )
Adjustments in respect of prior years
60
(76 )
13
1
Credit / (charge) to statement of comprehensive income
1,320
(232 )
(182 )
(293 )
At 30 March 2024 / 1 April 2023
2,628
795
4,286
4,006
DEFERRED TAX ASSETS
Group
Company
Share
Share
All figures in £'000
Pension
options
Other
Total
Pension options
Other
Total
At 26 March 2022
3,283
114
137
3,534
3,283
114
62 3,459
Adjustment in respect of prior years
-
35
(35 )
-
-
35
(33 )
2
(Charge) / credit to statement of
comprehensive income
(220 )
(85 )
7
(298 )
(220 )
(85 )
-
(305 )
Charge to equity
-
(10 )
-
(10 )
-
(10 )
-
(10 )
Credit to other comprehensive income
972
-
-
972
972
-
-
972
At 1 April 2023
4,035
54
109
4,198
4,035
54
29
4,118
Adjustment in respect of prior years
-
-
155
155
-
-
13
13
(Charge) / credit to statement of
comprehensive income
(159 )
(50 )
803
594
(158 )
(50 )
12
(196 )
Credit to equity
-
2
4
6
-
2
-
2
Credit to other comprehensive income
447
-
-
447
447
-
-
447
At 30 March 2024
4,323
6
1,071
5,400
4,324
6
54
4,384
DEFERRED TAX LIABILITIES
Group
Company
Accelerated
Accelerated
capital
capital
All figures in £'000
allowances
Total
allowances
Total
At 26 March 2022
(3,393 )
(3,393 )
(123 )
(123 )
Adjustment in respect of prior years
(76 )
(76 )
-
-
Credit to statement of comprehensive income
66
66
11
11
At 1 April 2023
(3,403 )
(3,403 )
(112 )
(112 )
Adjustment in respect of prior years
(95 )
(95 )
-
-
Credit to statement of comprehensive income
726
726
14
14
At 30 March 2024
(2,772 )
(2,772 )
(98)
(98)
The Group has not recognised a deferred tax asset on the tax losses incurred by its US subsidiaries of £2,598k (2023: £2,944k).
The accompanying notes form part of the financial statements
23 SHARE CAPITAL
GROUP AND COMPANY
Number of
Issued and fully paid
ordinary shares
£’000
At 30 March 2024 and 1 April 2023
9,554,803
2,389
Options
Options
Options at
Options
exercised
not
Options Options at
1 April
granted in
in the
expected
lapsed in
30 March
2023
the period
period
to vest
the period
2024
Share options
68,173
82,624
nil
nil
(30,094 )
120,703
POTENTIAL ISSUE OF ORDINARY SHARES
Under the Group’s long-term incentive plan for executive directors and senior executives, such individuals hold rights over ordinary
shares that may result in the issue of up to 82,624 ordinary shares of 25p by December 2026 (2023: 68,173 ordinary shares of 25p by
September 2025). There were no share options exercised in the period (2023: nil). Further information on directors share options
can be seen in the Remuneration Committee Report.
LONG TERM INCENTIVE PLAN
The amount of gains made by Directors on share options exercised in the year totalled £nil (2023: £nil).
The Statement of Comprehensive Income includes an LTIP credit of £109,372 for the year in relation to Directors
(2023: £69,039 credit).
CASH-SETTLED OPTIONS
Conditional cash awards (“Cash Awards”) grant participating employees a conditional right to be paid a cash amount based on the
proceeds of the sale of a specified number of Ordinary Shares following vesting of the award. Under the LTIP Plan, Conditional Cash
awards were granted to Executive Directors as follows:
Options
Options
Options at
Options
exercised
not
Options Options at
1 April
granted in
in the
expected
lapsed in
30 March
2023
the period
period
to vest
the period
2024
Cash-settled options
16,465
24,158
nil
nil
nil
40,623
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
128
129
The accompanying notes form part of the financial statements
24 EMPLOYEES AND DIRECTORS
Employee benefit costs during the period:
Group
Group
Company
Company
All figures in £'000
2024
2023
2024
2023
Wages and salaries
28,122
29,139
3,349
2,698
Social security costs
2,771
2,945
439
433
Pension costs (note 21)
1,873
2,174
333
615
Termination benefits
1,781
201
363
201
34,547
34,459
4,484
3,947
The average monthly number of people (including Executive Directors) employed in the Group during the year, analysed by division
was as follows:
Full Time Equivalent
Headcount
All figures in Number
2024
2023
2024
2023
James Cropper Paper Products
385
431
388
439
Technical Fibre Products
156
156
159
159
James Cropper PLC
68
58
81
70
609
645
628
668
Group
Group
Company
Company
All figures in £'000
2024
2023
2024
2023
Contracts placed for future capital expenditure not
provided in the financial statements
793
1,196
113
34
The accompanying notes form part of the financial statements
27 EXCEPTIONAL ITEMS
Group
Group
All figures in £'000
2024
2023
Restructuring costs
2,309
-
Impairment of property, plant and equipment
4,427
-
Earn-out adjustment on contingent consideration
on business acquisition
(422 )
986
Flood settlement costs
100
-
Pension settlement (income)
(1,404 )
-
EXCEPTIONAL ITEMS IN OPERATING (LOSS) / PROFIT
5,010
986
Fair value adjustment on contingent consideration
262
109
EXCEPTIONAL ITEMS IN INTEREST PAYABLE AND
SIMILAR CHARGES
262
109
On 19 April 2023 the company announced a major restructuring of the Paper division. The restructuring involved a reduction in the
number of paper machines in operation from four to three, with two machines anticipated to be in production at any one time, to
better align production capacity and cost base with market outlook. This led to a redundancy program and a reduction in overall
headcount. The £2,309k restructuring costs is inclusive of a £469k write-off of machinery.
During the year the Group recognised a £4,427k impairment loss in respect of the fixed assets in the Paper and Packaging business.
Further detail is provided on page 106.
The company incurred £100k of professional services fees in FY24 to assist with the correction and alignment of the corporation tax
returns with the accounting treatment of a legacy flood provision, dating back to the widespread damage Storm Desmond inflicted
on the site in 2015.
The company received income of £1,404k from the settlement of a longstanding legal claim concerning Pension equalisation.
A cost of £262k is recognised in interest payable and similar charges to reflect the unwinding of the discounted present value of the
contingent consideration payable as part of the acquisition of PV3 Technologies Ltd (now known as TFP Hydrogen Products Ltd).
A credit of £(422)k has been booked to other expenses to adjust the accrued level of contingent consideration to the final amount due
following the conclusion of the earn-out agreement.
The adjustments above are treated as exceptional items as they distort the underlying operating profitability of the Group and make
year on year comparison of performance challenging.
26 CONTINGENCIES AND EVENTS POST THE REPORTING PERIOD
There were no contingent liabilities at the period end for the Group, or post-balance sheet events.
25 CAPITAL COMMITMENTS
Employee benefit costs during the period:
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
130
131
The accompanying notes form part of the financial statements
28 RELATED PARTY TRANSACTIONS
GROUP
The Group has taken advantage of the exemption not to disclose intra-group transactions that are eliminated on consolidation.
During the period TFP Hydrogen Products Ltd paid £25k (2023: £22k) to NRD Ventures Ltd, a company in which David Hodgson
(Director of TFP Hydrogen Products Ltd) is a Director, for rental of premises in Launceston, Cornwall, used as the main premises for
TFP Hydrogen Products Ltd. TFP Hydrogen Products Ltd paid £15k to NRD Ventures Ltd, a company in which David Hodgson
(Director of TFP Hydrogen Products Ltd) is a Director, for manufacturing equipment.
COMPANY
During the period the Company paid £0k (2023: £1k) to Ellergreen Group LLP, a company in which M A J Cropper (Chairman and
Non-Executive Director) is a director, for maintenance work. The Company paid £35k (2023: £24k) to Ellergreen Group LLP, a
company in which M A J Cropper is a director, for imports of electricity from a hydro-electric plant. During the period the Company
paid £11k to Burneside Community Energy Ltd, a company in which M A J Cropper is a director, for energy projects.
The Company also has the following transactions and balances with related entities:
Loans and net
2024
Management
Receivable/
intercompany
All figures in £’000
charges
(Payable)
funding
James Cropper Speciality Papers Limited
5,667
1,068
20,979
James Cropper Converting Limited
466
(5 )
(1,268 )
James Cropper 3D Products Limited
963
(10 )
13,675
Technical Fibre Products Limited
2,863
(58 )
12,369
James Cropper Overseas Trading Limited
-
150
(24 )
TFP Hydrogen Products Limited
-
727
-
9,959
1,872
45,731
Loans and net
2023
Management
Receivable/
intercompany
All figures in £’000
charges
(Payable)
funding
James Cropper Speciality Papers Limited
4,715
4,126
8,100
James Cropper Converting Limited
404
106
3,363
James Cropper 3D Products Limited
686
147
19,039
Technical Fibre Products Limited
2,784
812
12,466
James Cropper Overseas Trading Limited
-
139
(60 )
8,589
5,330
42,908
COMPENSATION FOR KEY MANAGEMENT AND DIRECTORS
In accordance with IAS 24 “Related Party Disclosures”, key management personnel are those persons having authority and
responsibility for planning, directing and controlling the activities of the Group, directly or indirectly, and includes directors (both
executive and non-executive) of James Cropper PLC. The remuneration of the directors is disclosed in the Report of the
Remuneration Committee (pages 76 to 77). There are 5 Directors who accrued retirement benefits under money purchase and
defined benefit schemes in the year (2023: 6 Directors).
All figures in £’000
2024
2023
Salaries and fees
930
1,095
Short term employee benefits
81
106
Short term bonuses
15
51
Pension costs
25
50
Termination benefits
201
201
Total
1,252
1,503
The amount of gains made by Directors on share options exercised in the year totalled £nil (2023: £nil).
29 PRIOR PERIOD RESTATEMENT
The comparatives detailed below have been restated. No adjustment impacts prior year profit or net assets.
Statement of Financial Position
Company
As previously reported
Restatement
Restated
All figures in £’000
2023
2023
2023
Amounts due by group undertakings
-
40,867
40,867
Total non-current assets
15,070
40,867
55,937
Trade and other receivables – amounts due by group undertakings
53,991
(40,867 )
13,124
Total current assets
58,507
(40,867 )
17,640
An adjustment has been made to the classification of intercompany receivables. In the prior year, certain intercompany debtors were
presented as current assets however there was no expectation that these balances would be repaid within 12 months of the balance
sheet date which means that the instruments were, in substance, non-current in nature. As a result, £40,867k was reclassified from
trade and other receivables (within current assets) to amounts owed by group subsidiaries (within non-current assets).
FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
132
ANNUAL REPORT PRODUCTION
All the paper used in this report has been made in England by James Cropper.
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SHAREHOLDER INFORMATION
REPORTING
Interim Results
9 November 2023
Full Year Results
23 July 2024
Annual General Meeting
4 September 2024
DIVIDENDS ON ORDINARY SHARES
Interim dividend of 3.0 pence per share paid on 8 January 2024
to Ordinary Shareholders registered on 8 December 2023.
The Board is not proposing a final dividend for the year
ended 30 March 2024, leaving the full year dividend at
3.0 pence per share.
INDEPENDENT AUDITOR
Grant Thornton UK LLP
TAX ADVISERS
PricewaterhouseCoopers LLP
NOMAD & BROKERS
Shore Capital
CORPORATE LAWYERS
Squire Patton Boggs LLP
REGISTRAR
Link Asset Services
PENSION ADVISER
Willis Towers Watson
JAMES CROPPER PLC
Telephone +44 (0)1539 722 002
Email info@cropper.com
Burneside Mills, Kendal, Cumbria LA9 6PZ Great Britain
www.jamescropper.com
Company Registration No: 00030226
2023 – 2024
SHAREHOLDER
INFORMATION