Interim Report for the Six Months Ended 30 June 2022
Effective pricing actions support strong H1 with increased profit expectations for the full year
9 August 2022 – Zotefoams plc (“Zotefoams”, the “Company” or the “Group”), a world leader in cellular materials technology, today announces its interim results for the six months ended 30 June 2022.
Results highlights
- Group revenue of £59.0m, 23% above the prior year comparative (HY 2021: £48.2m)
– High-Performance Products (HPP) sales up 21% to £23.7m (HY 2021: £19.6m)
– Polyolefin foams sales up 26% to £34.3m (HY 2021: £27.3m) - On a constant currency basis, Group revenue was 21% ahead of the prior year comparative at £57.9m
- Effective pricing has supported gross margins, despite significant cost inflation
- Profit before tax (PBT) increased 42% to £5.7m (HY 2021: £4.0m)
– FX tailwinds benefitted PBT by £1.0m - Basic earnings per share increased 44% to 9.42p (HY 2021: 6.52p)
Interim dividend increased by 4% to 2.18p per share (HY 2021: 2.10p per share), reflecting strong growth and confidence in the Group’s prospects
Strategic highlights
- Strong performance and current order book in most polyolefin foam markets and territories provides good momentum leading into H2
– In Poland, our third major manufacturing site has increased production and is increasingly servicing key European customers directly - Aviation sales increasing as market recovers and continued good demand in footwear products
- Key patent granted in the USA for ReZorce® recyclable packaging technology
Financial summary
| Six months ended 30 June 2022 | Six months ended 30 June 2021 | Change |
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Group revenue (£m) | 59.0 | 48.2 | 23% |
Gross margin (%) | 28.9 | 28.9 | – |
Operating profit (£m)* | 6.6 | 4.7 | 41% |
Profit before tax (£m)* | 5.7 | 4.0 | 42% |
Basic EPS (p)* | 9.42 | 6.52 | 44% |
Cash generated from operations (£m) | 5.2 | 5.6 | (8%) |
Interim dividend (p) | 2.18 | 2.10 | 4% |
Leverage ratio (multiple) | 2.0 | 1.9 | – |
Net debt (£m) | 38.0 | 35.6 | (7%) |
*Unadjusted for £0.12m of amortisation on acquired intangibles
Commenting on the results and the outlook, David Stirling, Group CEO, said:
“We have delivered robust volume growth across both the HPP and Polyolefin Foam businesses in H1 2022. Alongside this, several rounds of price increases have been implemented across products and markets to catch up with persistent and unpredictable input cost inflation. As a result, we have been able to report stable gross margins, which has enabled strong first half operating profit growth.
“Order books and demand momentum across key markets coming through the half year underpin our expectation for year-on-year sales growth in H2 2022, which will also benefit from better pricing, support from more favourable exchange rates and better product mix.
“Input inflation, other than energy pricing, has moderated and supply chains are operating more normally, however, there is a heightened level of risk associated with macroeconomic factors and the demand environment.
“Whilst remaining mindful of these risks we now expect full year underlying profit to be ahead of current market consensus expectations.
“Overall, I am pleased with the recent performance and current positioning of our business.”
The full Report is available here: