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(Alliance News) - Zotefoams PLC shares plunged Thursday after the firm noted the market for polyolefin foams in Europe has "deteriorated significantly" since August.
Shares in the company, which manufactures foams for use in sports, medical equipment and aerospace industry, were 37% lower in London in morning trade at 338.35 pence each.
In its interim results, released in August, Zotefoams said it was "mindful" of the "difficult current trading environment" in the European market but stated it has been worse than expected.
Zotefoams added growth in the North American market has "slowed" and will now be below the company's previous estimates.
As a result, Zotefoams said it expects its polyolefin foam sales will be about GBP6 million below current market estimates - which will result in its second half sales being about GBP2 million below the first half.
"Anticipated profit for this period is impacted by our limited ability to change the operational gearing in the business in this timeframe," Zotefoams added.
The company generated GBP42.3 million revenue in the first half. In 2018, Zotefoams reported revenue of GBP81.0 million.
Zotefoams said its High-Performance Products unit is performing as expected, with "strong" growth in T-FIT insulation products and Zotek technical foams, mainly in aviation and footwear.
"Notwithstanding the near-term headwinds in the polyolefin foams business, the board remains confident in the growth strategy and capacity enhancement investments the company is making and in the long-term prospects of the business," said Zotefoams.
By Paul McGowan; paulmcgowan@alliancenews.com
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