Essentra FY adjusted operating profits seen in line with previous guidance

Plastic and fibre products supplier Essentra said on Wednesday that it expects full-year adjusted operating profits to be in line with previous guidance following a "resilient Q4 performance".

Essentra said it had seen "a sequential improvement" in performance during the fourth quarter when compared to the previous quarter, with group revenue down 3.6% year-on-year on a like-for-like basis, an improvement on the 7.1% decline reported in Q3, as comparatives continued to ease after a strong first-half performance in the prior year.

The FTSE 250-listed group said its European, Middle East, and Africa operations saw an improvement in new order momentum in Q4, while its American unit saw trading stability quarter-on-quarter, and remains focused on the improvement in destocking trends within distributor end-market channels. Essentra's Asia-Pacific business continued to demonstrate "a gradual recovery".

Essentra added that through a combination of "disciplined and proactive initiatives" taken through 2023, group adjusted operating margins remained strong. Central corporate costs, which were re-sized in the first half of 2023, continue to be "well managed", and remain in line with previous guidance of approximately £13.0m.

"With a robust and differentiated business model, underpinned by its breadth of customers, end market categories and geographical diversification, Essentra is well positioned, and continues to demonstrate through-cycle financial resilience. The group's balance sheet and cash generation remain strong, providing optionality for investment in organic growth initiatives and earnings enhancing M&A," said Essentra.

As of 0935 GMT, Essentra shares were down 3.16% at 153.0p.

Reporting by Iain Gilbert at Sharecast.com