(Alliance News) - Essentra PLC on Tuesday reported a robust start to the second half of the year, as it aims to become a "pure play global components" business over time.
Essentra, which manufactures plastic caps, workholding clamps, fasteners and knobs, said it has simplified its portfolio over the last few years into three global businesses, each with leading market positions and a clear purpose and strategy.
Milton Keynes, England-based Essentra has now decided to review the full range of strategic options for the Filters business, which is likely to conclude in the second quarter of 2022 at the earliest. Essentra noted that its Filters division has made significant progress over the last four years on the delivery of all strategic "game changers" and now has attractive long-term growth prospects.
When referring to "game changers", Essentra noted the China joint venture, which has made a positive start with volumes increasing each month. Essentra also said its innovation team remains focused on delivering new products to market. The company said it expect final-quarter growth in Filters to accelerate from the levels seen in the third quarter of 2021, driven by the China joint venture and further outsourcing wins.
Turning to current trading, the FTSE 250-listed company said it had a robust start to the second half of 2021, with third-quarter trading within the range of expectations. The company delivered like-for-like revenue growth of 5.1% for the period, thanks to the strong performance in the Components and Filters divisions, despite ongoing global supply chain disruptions. Year-on-two-year, however, like-for-like revenue was down 2.2% in the third quarter.
Essentra noted that its Packaging division's revenue declined 6.1% on a like-for-like basis in the three months to September 30 year-on-year and by 15% year-on-two-years, as prescriptions and elective surgery volumes continue to be hurt by the pandemic.
More positively, the company said the Packaging business should start to benefit from the recovery in global healthcare systems and pent-up demand for prescriptions and elective surgeries, with the recent order book showing early signs of improvement.
Given these overall trends, Essentra said it is expecting to deliver a total 2021 adjusted operating profit in the range of analysts' forecasts from GBP80.7 million to GBP84.3 million. For 2020, the company posted adjusted operating profit of GBP62.0 million, while 2019 adjusted operating profit stood at GBP87.5 million.
"We continue to focus on organic growth and efficiency initiatives to drive profitability, as well as acquisition opportunities," said Chief Executive Paul Forman.
Essentra shares were trading 5.5% higher in London on Tuesday morning at 288.50 pence each.
By Evelina Grecenko; evelinagrecenko@alliancenews.com
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Essentra (ESNT)