Essentra holds guidance despite 9% fall in sales

Components maker Essentra on Tuesday held annual guidance, despite sales falling 9% in the four months to May 6, as supply chain improvements and signs of a rebound in China helped orders.

The company said performance remained robust in its European business, with distributors showing signs of destocking, impacting the US in particular.

“There are signs of improvement in China, which started towards the end of the first quarter,” the company said.

“On a like-for-like trading day adjusted basis, group sales were down 9% in the period, compared to the same period in 2022. This reflects a particularly strong comparator in the prior year, with significant end-market recovery including improving supply chains which enabled the business to recover historically high orderbook backlogs experienced at the beginning of 2022.”

“As anticipated, the business is seeing improved trends since the start of the second quarter. New daily order intake levels are demonstrating growth relative to FY2022, and the order book provides a good level of visibility into the second half of the year.”

Essentra said it was confident in delivering adjusted operating profit for the first half of the year in line with expectations, and the 2023 full year outlook remains unchanged.

Reporting by Frank Prenesti for Sharecast.com