Essentra remains cautious of global macro outlook

(Sharecast News) - Plastic and fibre products supplier Essentra revealed on Friday that adjusted operating profits had declined in 2019 and said it remained cautious of the global macroeconomic outlook in the wake of the Wuhan coronavirus outbreak.
Adjusted operating profits came to ?87.5m, down 5.4% year-on-year, or 2% on an underlying basis, but reported operating profits shot up 69.4% to ?80m. Pre-tax profits were up 80% at ?66m.

Essentra also saw revenues decline 5% year-on-year to ?974m and earnings per share contract 10 basis points to 21.3p.

Dividends per share were flat at 20.7p.

Net debt widened 18% to ?284.4m, while free cash flow slipped 18.9% to ?40.7m.

Essentra said it made further good progress on all key metrics of its stability programme during the year and now expects to make further strategic, financial and operational progress in 2020.

Heading into 2020, Essentra felt the macroeconomic environment remained "uncertain", exacerbated by the Wuhan coronavirus.

However, the FTSE 250-listed group noted that while its components division was more exposed to industrial segments with "a certain degree of cyclicality", much of the company served end-markets which were non-cyclical in nature.

Chief executive Paul Forman said: "Essentra continued to make meaningful strategic, financial and operational progress, delivering underlying revenue and operating margin growth despite challenging trading conditions.

"We begin the year as a more focused business, ready and well-equipped to face the challenges and opportunities ahead."

As of 0825 GMT, Essentra shares were down 3% at 337.55p.