Zotefoams Trading Update – 19 January 2023
Strong performance and record profits
19 January 2023 – Zotefoams, a world leader in cellular materials technology, today provides a trading update for the Group’s financial year ended 31 December 2022 (unaudited).
The strong trading performance reported in the Group’s update of 15 December 2022 continued through to the end of the year and, as a result, the Group expects to report full year revenue growth of 26%, to £127.4m (2021: £100.8m), which is ahead of current market expectations.
Full year trends for the specific Group’s business units were as follows:
- 29% growth in High Performance Product (HPP) sales to £54.5m (2021: £42.3m):
- Footwear sales grew by 25%, with continued momentum from new products and projects, representing approximately 33% of Group revenue
- ZOTEK® fluoropolymer foam revenue increased by 48%, principally benefitting from the continued recovery of the aviation market
- T-FIT® technical insulation sales grew 48%, overcoming continued COVID-related challenges in our manufacturing facility in China
- 25% growth in AZOTE® polyolefin sales to £70.1m (2021: £56.2m):
- Good performance from all regions with pricing actions recovering input cost inflation
- Volume in line with the previous year, with increases experienced in most major geographical markets offsetting a 5% decline in continental Europe, primarily due to lower demand from the automotive segment
- 23% growth in MuCell Extrusion (MEL) sales to £2.8m (2021: £2.3m), with increasing interest in the Group’s technology for polymer reduction. Development of the mono-material ReZorce® packaging is progressing well and is currently a significant focus of the team.
Profit before tax for the year is now expected to be not less than £12.0m (2021: £7.0m), which is ahead of current market expectations and represents a year-on-year increase of over 70%. This record profit figure is net of the segment loss in the MEL Business Unit increasing to £1.9m (2021: £0.7m), which reflects the continued investment in the development of ReZorce packaging technology.
The Group demonstrated strong cash generation, with the year-end leverage multiple (net debt to EBITDA) expected to reduce to approximately 1.16x (2021: 2.06x).
Notice of results
The Company expects to publish its preliminary results for the year ended 31 December 2022 on Tuesday 21 March 2023.
Commenting on the update David Stirling, Group CEO of Zotefoams, said:
“We are delighted to close the year with very strong sales growth, delivering record profits and excellent cash generation. 2022 was characterised by uncertainty and our team has responded well in dealing with these challenges. The Group has delivered growth across all business units.
“We have also continued to invest in the development of ReZorce mono-material packaging which represents a significant commitment to new technology in the sustainability of consumer goods, in line with our own ESG and efficiency initiatives which remain a core focus.
“Whilst the shorter-term macroeconomic climate remains uncertain, we continue to monitor the evolving landscape closely and believe Zotefoams has a strong portfolio of opportunities, a clear strategy and is well positioned to deliver further growth.”