08 February 2012
James Cropper PLC ("the Company")
Investment in a new manufacturing facility in the USA and Trading Update
USA Investment
The Company is pleased to announce that it has authorised an initial investment of US$3m in a new manufacturing facility located at Rotterdam, New York State. The facility will include two fibre plating lines.
In late 2011 the Company's subsidiary Technical Fibre Products ("TFP") entered into a 10 year lease of a 50,000 square foot facility in Rotterdam in order to consolidate all of its US activities into one site as the current US manufacturing sites do not have the capacity or capability to meet the expected growing demand in a number of customer programmes in the aerospace, defence and electronic sectors. These are anticipated to generate significant long term revenues. TFP supplies specialist metal-coated fibres and non-woven material to the programmes mentioned above. Currently the primary manufacture of these materials takes place at TFP's existing US facilities in Cincinnati, OH and Stratford CT with secondary processing at the Company's main site in Kendal, UK.
The Cincinnati facility will close by mid-2012. It will take approximately 18 months for the facility at Rotterdam to attain accreditation to a number of important customer programmes which consume materials sourced from the Stratford facility. Once accreditation has been achieved the Stratford facility will also be closed. If current company projections are achieved it is anticipated that the Rotterdam facility will operate on a break-even in 2015.
Trading Update
As a consequence of this development costs totalling approximately £0.5 million relating to relocation and refurbishment will be expensed against profit in the current financial year. This cost has not been built into current market projections relating to TFP.
The reduced level of sales by James Cropper Speciality Papers ("Speciality Papers") anticipated in the Interim Statement has materialised both in UK and Euro-zone markets. James Cropper Converting ("Converting") has been similarly affected. Sales by Speciality Papers and Converting are now anticipated to be significantly down on previous projections.
Overall Company profit before tax, prior to IAS19 pension adjustment is now expected to be in line with last year.
Enquiries:
James Cropper PLC
John Denman, Group Finance Director
Tel: 01539 722 002
www.cropper.com
Westhouse Securities Limited
Adam Lloyd
Paul Gillam
Tel: 020 7601 6100
