James Cropper PLC on Wednesday said it swung to a loss in the first half of its financial year, due to subdued demand and increased costs.

James Cropper is a Kendal, England-based manufacturer of creative papers and luxury packaging.

The pretax loss was £606,000 in the six months that ended September 30, a swing from a profit of £2.4 million a year before.

Revenue was 12% down year-on-year to £49.9 million from £56.5 million. The company noted an improvement of 6.5% from the previous six month’s revenue of £46.5 million in a ‘challenging’ second half of the prior financial year.

James Cropper shares were down 9.4% to 226.50 pence in London on Wednesday afternoon.

No interim dividend was proposed. Last year, James Cropper paid an interim dividend of 3.0p per share.

The company said ‘challenging conditions’ remain in the paper and packaging business ‘due to the ongoing fragility in the luxury packaging sector’.

Due to this weakness, James Cropper now expects full-year results to be below prior forecasts. It said financial 2025 revenue and adjusted pretax profit before tax are now expected to be in line with financial 2024, when they were £103.0 million and £758,000, respectively.

Outgoing Chief Executive Officer Steve Adams said: ‘Although trading was challenging in the first half of the financial year, the group was able to achieve sequential growth in revenue and profit with clear signs of recovery across most segments of the business.

‘The fact that our direct customer base remains stable and intact, and that we are seeing positive trends in various end markets, gives us confidence that the group is positioned for growth once end market conditions stabilise and improve,’ he added.

Adams will retire in early 2025 and be replaced by David Stirling, the former CEO of Zotefoams PLC.

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