Essentra makes positive start after decent Q1

(Sharecast News) - Essentra reported an "encouraging start" to the year on Friday, with first quarter trading in line with expectations, notwithstanding logistical challenges derived from the pandemic and the aftermath of Brexit.

The FTSE 250 company said it delivered like-for-like revenue growth of 1.4% for the period, marking a return to positive quarterly growth and continuing the trend of improved quarterly performance momentum seen since the onset of the pandemic in the second quarter of 2020.

Although the pandemic continued to contribute to an uncertain macroeconomic environment, it said recent order book trends were improving across the group.

The components division delivered a "robust" performance, the board said, with revenue growth of around 5%, adjusting for two less trading days during the first quarter, as end markets continued to improve.

Essentra's packaging division had a like-for-like revenue decline of 5.4%, which it put down to a reduction in the level of prescriptions and elective surgeries through lockdown periods.

Despite a quiet January, it said trading improved in the rest of the quarter where it was level year-on-year.

The filters division had a strong start to the year, with revenue growth of 10%.

That performance was mainly driven by outsourcing contracts delivering volumes in line with expectations, the board said.

Revenue in filters' was expected to continue growing, but the growth rate could moderate as the comparatives become tougher, the company warned.

"The diverse nature of our businesses' end markets provides a degree of resilience against the macro uncertainty caused by the pandemic, but nonetheless it very encouraging to see that we have maintained the momentum of improving quarterly performance, resulting in overall like-for-like growth of 1.4%," said chief executive officer Paul Forman.

"Across the businesses, recent order book trends are improving, and I expect this positive momentum to be maintained."

At 0934 BST, shares in Essentra were up 2.01% at 305p.