Zotefoams sees profits jump after US expansion

Cellular material technology developer Zotefoams on Tuesday reported a 64% jump in first-half profit as US sales increased after capacity expansion.

The firm saw its pretax profit climb to £4.6m and revenue increase by 12% to £37.9m in the six months ended 30 June, after sales of polyolefin foams increased by 2% in the USA, where the company has sites in Kentucky and Oklahoma and Massachusetts, following the aforementioned expansion.

The block foam manufacturer’s performance fell in line with the board’s expectations, with the company reporting that net debt decreased by £10.82m from £17.96m in December to reach £7.14m.

Consequently, the company increased its interim dividend by 3.1% to 1.97 pence per share.

David Stirling, group chief executive, said: "In the first half of 2018 we also commissioned the initial phase of capacity expansion in Kentucky, USA, which allowed us to increase sales volumes in what remains a capacity constrained environment. Sales of higher value high performance products have grown very strongly and now represent 24% of group sales."

Stirling added that the London listed company entered the second half of the year with a strong order book, a differentiated portfolio and growth expectations across all business units.

"Zotefoams' ambition is to be the world leader in cellular materials technology in our chosen markets and, in the period, we have delivered strong organic growth and accelerated our investment plans to realise this ambition," said Stirling.

Zotefoams’ shares were down 6.14% at 520.00p at 1523 BST.