The directors present their annual report and audited consolidated financial statements for the year ended 31 December 2025
Results and dividends
Before exceptional items, the profit attributable to shareholders for the year amounted to £22.9m (2024: £12.4m). After exceptional items, the profit attributable to shareholders for the year amounted to £21.9m (2024: £2.7m loss). An interim dividend of 2.50p (2024: 2.38p) per share was paid on 6 October 2025. The Directors recommend that a final dividend of 5.35p (2024: 5.10p) per share be paid on 1 June 2026 to shareholders who are on the Company’s register at the close of business on 1 May 2026, resulting in a total dividend of 7.85p per share for the year (2024: 7.48p).
In November 2025, Zotefoams also completed the acquisition of 100% of the share capital of Overseas Konstellation Company S.A. (OKC) for an upfront cash consideration of €27.6m plus a deferred element of up to €8.4m based on OKC’s financial performance in 2026. Further details of the acquisition are in note 4 of the financial statements.
This acquisition, funded by existing cash resources, expands Zotefoams’ product portfolio, market reach, channel and manufacturing capabilities, particularly in technical foams, and helps Zotefoams evolve into a solutions provider by expanding its finishing and machining capabilities. The acquisition is expected to be earnings‑accretive in its first full year.
For further information on the performance of the Company refer to the Strategic Report, which should be read as forming part of the Directors’ report.
Directors
The Directors who were in office during the year were:
L Drummond
J Carling
J Clarke (appointed 28 October 2025)
R Cox
G McGrath (retired 31 October 2025)
D Robertson (retired 31 December 2025)
M Swift
C Wall
N Wright (appointed 22 September 2025)
All Directors other than J Clarke, G McGrath and D Robertson were in office during the financial year and up to the date of signing of the financial statements. The biographical details of Board Directors in post as at 10 April 2026 are set out here.
The appointment, replacement and powers of the Directors are governed by the Company’s Articles of Association (the “Articles”), the UK Corporate Governance Code, the Companies Act 2006, prevailing legislation and resolutions passed at the Annual General Meeting (AGM) or other general meetings of the Company.
The Articles give the Directors power to appoint and replace Directors. Under the Terms of Reference of the Nomination Committee, any appointment must be recommended by the Nomination Committee for approval by the Board of Directors. The Articles also require new Directors to retire and submit themselves for election at the first AGM following their appointment and for existing Directors to retire and, if they so wish, submit themselves for re‑election at every AGM thereafter.
R Cox and N Wright, the Executive Directors, have service contracts which are terminable on twelve months’ written notice. G McGrath resigned as Executive Director on 31 October 2025 and left the employment of the Group on 28 February 2026. All other Directors have letters of appointment which are terminable on six months’ written notice.
The Company maintained Directors’ and Officers’ Liability Insurance cover throughout 2025. The Company has issued Deeds of Indemnity in favour of all Directors. These Deeds were in force throughout the year ended 31 December 2025 and remain in force as at the date of this report. These Deeds, as well as the service contracts and the Company’s Articles of Association, are available for inspection during normal business hours at the Company’s registered office and will be available at the AGM.
Conflicts of interest
All Directors submit details to the Company Secretary of any new situations, or changes to existing ones, which may give rise to an actual or potential conflict of interest with those of the Company.
Where an actual, or potential, conflict is approved by the Board, the Board will normally authorise the situation on the condition that the Director concerned abstains from participating in any discussion or decision affected by the conflicted matter. Authorisation of a conflict is only given to Directors who are not interested in the matter. No new conflicts of interest were noted during 2025 or between the year end and the date of signing of the financial statements.
Amendment to the Articles of Association
The Company’s Articles of Association may only be amended by a special resolution of the shareholders passed in general meeting and were last amended in May 2021.
Corporate Governance report
The Corporate Governance report should be read as forming part of the Directors’ report.
Employees
To safeguard employee welfare, the Group has documented and well-publicised policies on occupational health and safety, the environment and training. The Group operates an equal opportunity, single-status, employment policy and an open management style.
Zotefoams operates an equality, diversity and inclusion policy and we believe diversity (ethnicity, age, gender, language, sexual orientation, gender re-orientation, religion and socio-economic status) of the employees promotes a better working environment, which in turn leads to innovation and business success. Applications for employment by disabled persons are always fully considered and, in the event of an employee becoming disabled, every effort is made to ensure that their employment with Zotefoams continues and that appropriate training and support are provided where necessary. Zotefoams’ policy is that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.
Zotefoams places considerable value on the involvement of its people and holds formal and informal meetings to brief them on matters affecting them as employees and on the various factors (including financial and economic factors) affecting the performance of the Group; it also ensures that their views are taken into account in making decisions that are likely to affect their interests. The Board uses a number of engagement mechanisms to keep abreast of employees’ views, including a review of the annual workforce engagement survey, regular updates from the Chief People Officer, site visits and the consideration of employee matters in line with the requirements of Section 172 of the Companies Act 2006 in relevant strategic decisions, such as investments in the UK, Vietnam and South Korea and the acquisition of Overseas Konstellation Company S.A..
In order to encourage employees to share in the success of Zotefoams, an all-employee share incentive scheme was established in 2015 in the UK. Under the scheme, employees can purchase shares each month directly from their salary. For every four shares bought, one further share is awarded. The shares vest on the third anniversary of award and are normally exempt from tax after five years.
The Company operates to a number of recognised industry standards.
Further details of our certifications are provided in our ESG report.
Relationships with others
In its decision-making, the Board considers how the Group fosters its business relationships with suppliers, customers and others in order to achieve good-quality outcomes.
Further information on this topic can be found in the Strategic Report (the S172(1) statement), which is incorporated into this Directors’ report by cross-reference.
Human rights
Zotefoams does not, at present, have a specific policy on human rights; however, it believes in recognising and respecting all human rights as defined in international conventions. This belief is embedded within the organisation’s values and ethical policies. We conduct every aspect of our business with honesty, integrity and openness, respecting human rights and the interests of our employees, customers and other stakeholders, according to the principles set out in our Ethics Policy, which covers:
- ensuring that our employees have the freedom to join a union, associate or bargain collectively without fear of discrimination against the exercising of such freedoms
- not using forced labour or child labour
- prohibiting the use of worker-paid fees and the confiscation of workers’ original identification documents
- complying with the Employer Pays Principle
- respecting the rights of privacy of our employees and protecting access to and use of their personal information.
The Company operates an Equality, Diversity and Inclusion Policy and a Dignity at Work Policy, which promote the right of every employee to be treated with dignity and respect and not be harassed or bullied. We work hard to ensure that goods and services are from sources that do not jeopardise human rights, safety or the environment, and expect our suppliers to observe business principles consistent with our own.
Business ethics
Zotefoams is committed to high standards of business conduct and aims to maintain these standards across all of our operations throughout the world. Under our Ethics Policy, we state that we will:
- operate within the law
- not tolerate any discrimination or harassment
- not make any political donations or grant public donation for the purpose of political advocacy of any kind and confirm that no political donations or contributions to political parties have been made during the year
- not make or receive bribes
- avoid situations that might give rise to conflicts of interest
- not enter into any activity that might be considered anti-competitive
- aim to be a responsible company within our local communities
- support and encourage our employees to report, in confidence, any suspicions of wrongdoing.
Supporting our Ethics Policy, we have policies on anti-bribery and corruption, anti-fraud, anti‑competitive behaviour, employee share trading and whistleblowing. We are a signatory to the Employer Pays Principle, supporting our long-standing Group-wide commitment to recruitment costs being borne by the employer, not the employee.
Substantial shareholdings
In accordance with the Disclosure and Transparency Rules DTR 5, the Company, as at 31 March 2026, had received notices of the following material interests of 3% or more in the issued ordinary share capital:
Ordinary shares of 5.0p | Percentage of issued share capital | |
|---|---|---|
Schroder Investment Management | 9,539,447 | 19.37 |
Raymond James Investment Services | 4,846,073 | 9.84 |
BGF Investments | 3,231,270 | 6.56 |
Mr Marc & Mrs Claire Downes | 2,073,922 | 4.21 |
Mr Nicholas Beaumont-Dark | 1,909,347 | 3.88 |
Hargreaves Lansdown Asset Management | 1,903,388 | 3.87 |
Premier Milton Investors | 1,853,811 | 3.73 |
Lombard Odier Asset Management | 1,734,406 | 3.52 |
Interactive Investor | 1,501,025 | 3.05 |
Directors’ shareholdings are shown in the Directors’ Remuneration report.
Research and development (R&D)
The amount spent by the Group on R&D in the year was £1.6m (2024: £4.2m). In the opinion of the Directors, £nil (2024: £2.8m) of this expenditure met the requirements for capitalisation under IAS 38, while £1.6m (2024: £1.4m) did not and was consequently expensed in the consolidated income statement.
Share capital and reserves
(DTR 7.2.6R)
The Company has one class of ordinary shares, which has no right to fixed income. Each share carries the right, on a poll, to one vote at general meetings of the Company. There are no specific restrictions on the size of a holding nor on the transfer of shares, which are both governed by the general provisions of the Articles of Association and prevailing legislation. The Directors are not aware of any agreements between holders of the Company’s shares that may result in restrictions on the transfer of securities or on voting rights. No person has any special rights of control over the Company’s share capital, and all issued shares are fully paid.
At 31 December 2025, the Zotefoams Employee’ Benefit Trust (EBT) held 322,230 shares (approximately 0.6% of issued share capital) (2024: 133,573 shares) to satisfy share plans as described in the Directors’ Remuneration report. During the year, the EBT released 211,343 shares in respect of these share plans. 400,000 shares were allotted to the EBT on 22 April 2025. In accordance with best practice, the voting rights on the shares held in the EBT are not exercised and the right to receive dividends has been waived.
At the AGM held on 22 May 2025, authority was given to the Directors to allot unissued shares in the Company up to a maximum amount equivalent to approximately two‑thirds of the issued share capital of the Company. Authority was also given to the Directors to allot equity securities in the Company for cash without regard to the pre‑emption provisions of the Companies Act 2006. Both authorities expire at the AGM to be held on 27 May 2026. The Directors seek new authorities for a further year, in line with market practice.
The Company was given authority at the 2025 AGM to purchase up to 4,884,623 of its ordinary shares. This authority will also expire on 27 May 2026 and, at the date of this report, had not been used. In accordance with normal practice for listed companies, a special resolution will be proposed at this year’s AGM to seek a new authority to make market purchases up to a maximum of 10% of the issued share capital of the Company.
Subsidiaries and branches
Details of the joint venture, subsidiaries and branches within the Group are given in the financial statements.
Treasury and financial instruments
Information in respect of the Group’s policies on financial risk management objectives, including policies for hedging, as well as an indication of exposure to financial risk, is given in note 22 to the financial statements.
Future developments
Information on future developments for the Group has been set out in the Chair’s Statement and the Group CEO’s review.
Greenhouse gas emissions
Information on the Group’s greenhouse gas emissions may be found in the ESG report.
Pension schemes
Refer to the post-employment benefits section of the Group CFO’s review and note 24 to the financial statements for information related to the Company’s pension schemes.
In the UK, Zotefoams runs a number of defined contribution pension schemes. New joiners are eligible to join the Zotefoams Stakeholder Pension Scheme. In the USA, Zotefoams runs a 401k scheme for all employees. In other countries, employees participate in state-run schemes.
Finance costs capitalised
Finance costs of £0.4m were capitalised in the year (2024: £0.1m).
Events after the reporting period
On 1 January 2026, the Group undertook an internal restructuring to hive down the UK business from Zotefoams plc to subsidiary Zotefoams U.K.Limited. Further details can be found in note 28 to the financial statements.
Disclosure of information to Auditor
The Directors who held office at the date of approval of this Directors’ report confirm that, in so far as they are each aware, there is no relevant audit information of which the Company’s External Auditor is unaware, and each Director has taken all the steps that they ought to have taken as a Director in order to make themselves aware of any relevant audit information and to establish that the Company’s External Auditor is aware of that information.
Independent Auditor
A resolution to re-appoint PKF Littlejohn LLP as the Company’s External Auditor will be proposed at the forthcoming AGM.
On behalf of the Board,
N Wright
Director
10 April 2026