I can add my two cents as an aerospace engineer who is aware of James Cropper, formerly Technical Fibre Products. I'm not at all familiar with their energy solutions business unit.
They seem well-situated in the composites industry as a secondary materials supplier. Their product line is well-suited for the near and medium-term demands for advanced composites materials. At trade shows, their booth and promotional materials are memorable and high quality.
I know them, mostly, as a peripheral material supplier. Rather than the structural composites themselves, they supply veils and surfacing materials. There is a lot more room for innovation here but less overall value per part/plane/m2. Their recycled CF veils are the real deal and I think we will see real adoption of this-- I understand they are cost-effective compared to virgin fiber veils.
If I had to guess, their composites materials are barely sold outside of Aerospace despite what their website says. Aerospace is always going to be more limited in sales growth potential than other industries due to the time scales it operates on.
Looking at their investors page-- I am surprised their total revenue barely tops £100M. They conduct themselves, and have the website/promotional materials, of a much larger company. Whether or not this is a good indicator, I'll let you decide.
Very interesting insight. It does seem to confirm that their AM division has some strong intrinsic value with good products; albeit in Aerospace I presume "small" is not a great place to be in, with the large OEMs and large suppliers quite brutal to the small suppliers providing just parts and materials? Although their margins in AM suggests that they are able to command strong pricing power, suggesting their materials are unique and price competitive, as you suggest.
If small for their sector, I'd imagine their business has decent growth potential. A lot of parts need surfacing veils. The underlying structural composite fabrics, perhaps supplied by massive firms like Toray or Hexcel, are trending towards commodity. Surface veils have other value-driving functionalities like lightning-strike protection, IR interference, and aesthetic appearances. If compared to residential construction, I'd think Toray might supply the lumber (commodity), while JC is supplying vinyl siding (a market with demand for differentiated products).
Unrelated to JC, but if you are looking at UK firms, I like Zotefoams quite a bit. I have no idea if their stock is under/over-valued but their fundamental business outlook is strong. Their footwear segment is booming with strong patent protections and a Nike partnership. Their aerospace products are top-notch. Could be worth looking into.
Wow, Zotefoams has gotten really cheap in SP... I can't quite believe the valuations now, given the high prices it was at last year on the hype of the new product they were developing.
The dependency on Nike scares me... too much of a customer concentration risk? Who holds the cards in this relationship?
But I'm going to have a look at Zotefoams in detail, as this price does seem quite attractive for a good IP company.
The new CEO of James Cropper, David Stirling, was the CEO of Zotefoams up until last year... I'm still on the fence whether this is a good or bad thing... given the fiasco around the new product hype at Zotefoams last year....
To add - just read that Chesterfield Special Cylinders #CSC $CSC.L formerly known as Pressure Technologies....
They won a recent contract to supply a hydrogen storage project in Aberdeen. Seems like it was part of the government's HAR1 round of winners (awarded Dec23).
CEO of CSC: "...we remain well positioned to supply future projects anticipated as part of the UK government's Net Zero strategy, including those already planned or under development for HAR1 and HAR2 programmes."
So it looks like the HAR1 projects are getting off the ground now, so hopefully James Cropper's AM division wins some contracts?
And HAR2 has just been announced, but looks like maybe those projects won't start until 2026 the earliest.
Nice write up, I agree advanced materials could be an excellent business on its own but there’s so so much to sort out here. Would love to see it happen though..
Definitely not a clear cut investment case here. Risk of a further -20%, -30% easily with another profit warning or covenant breach / holiday sought. So not for orphans - but I can also see a +50%, +100% if they show AM growth again, and paper (see what I did!) over the cracks in the other division...
Small position, so if it loses money I won't lose sleep. If it goes up +30% won't meaningfully change my total portfolio returns. But a +50%, +100% makes a meaningful contribution.
I can add my two cents as an aerospace engineer who is aware of James Cropper, formerly Technical Fibre Products. I'm not at all familiar with their energy solutions business unit.
They seem well-situated in the composites industry as a secondary materials supplier. Their product line is well-suited for the near and medium-term demands for advanced composites materials. At trade shows, their booth and promotional materials are memorable and high quality.
I know them, mostly, as a peripheral material supplier. Rather than the structural composites themselves, they supply veils and surfacing materials. There is a lot more room for innovation here but less overall value per part/plane/m2. Their recycled CF veils are the real deal and I think we will see real adoption of this-- I understand they are cost-effective compared to virgin fiber veils.
If I had to guess, their composites materials are barely sold outside of Aerospace despite what their website says. Aerospace is always going to be more limited in sales growth potential than other industries due to the time scales it operates on.
Looking at their investors page-- I am surprised their total revenue barely tops £100M. They conduct themselves, and have the website/promotional materials, of a much larger company. Whether or not this is a good indicator, I'll let you decide.
Great article, thanks for sharing.
Hi Parker!
Very interesting insight. It does seem to confirm that their AM division has some strong intrinsic value with good products; albeit in Aerospace I presume "small" is not a great place to be in, with the large OEMs and large suppliers quite brutal to the small suppliers providing just parts and materials? Although their margins in AM suggests that they are able to command strong pricing power, suggesting their materials are unique and price competitive, as you suggest.
If small for their sector, I'd imagine their business has decent growth potential. A lot of parts need surfacing veils. The underlying structural composite fabrics, perhaps supplied by massive firms like Toray or Hexcel, are trending towards commodity. Surface veils have other value-driving functionalities like lightning-strike protection, IR interference, and aesthetic appearances. If compared to residential construction, I'd think Toray might supply the lumber (commodity), while JC is supplying vinyl siding (a market with demand for differentiated products).
Unrelated to JC, but if you are looking at UK firms, I like Zotefoams quite a bit. I have no idea if their stock is under/over-valued but their fundamental business outlook is strong. Their footwear segment is booming with strong patent protections and a Nike partnership. Their aerospace products are top-notch. Could be worth looking into.
Wow, Zotefoams has gotten really cheap in SP... I can't quite believe the valuations now, given the high prices it was at last year on the hype of the new product they were developing.
The dependency on Nike scares me... too much of a customer concentration risk? Who holds the cards in this relationship?
But I'm going to have a look at Zotefoams in detail, as this price does seem quite attractive for a good IP company.
The new CEO of James Cropper, David Stirling, was the CEO of Zotefoams up until last year... I'm still on the fence whether this is a good or bad thing... given the fiasco around the new product hype at Zotefoams last year....
To add - just read that Chesterfield Special Cylinders #CSC $CSC.L formerly known as Pressure Technologies....
They won a recent contract to supply a hydrogen storage project in Aberdeen. Seems like it was part of the government's HAR1 round of winners (awarded Dec23).
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20250319:nRSS1966Ba
CEO of CSC: "...we remain well positioned to supply future projects anticipated as part of the UK government's Net Zero strategy, including those already planned or under development for HAR1 and HAR2 programmes."
So it looks like the HAR1 projects are getting off the ground now, so hopefully James Cropper's AM division wins some contracts?
And HAR2 has just been announced, but looks like maybe those projects won't start until 2026 the earliest.
Nice write up, I agree advanced materials could be an excellent business on its own but there’s so so much to sort out here. Would love to see it happen though..
Definitely not a clear cut investment case here. Risk of a further -20%, -30% easily with another profit warning or covenant breach / holiday sought. So not for orphans - but I can also see a +50%, +100% if they show AM growth again, and paper (see what I did!) over the cracks in the other division...
Small position, so if it loses money I won't lose sleep. If it goes up +30% won't meaningfully change my total portfolio returns. But a +50%, +100% makes a meaningful contribution.