(Alliance News) - Essentra PLC on Wednesday predicted annual profit would be at the lower end of expectations, as it grapples with a "softer trading environment".
Shares in the company fell 7.1% to 137.20 pence each in London on Wednesday morning.
Essentra, which provides components to customers in the manufacturing, automotive, electronics and construction fields, said it "experienced market softening" in the Europe, Middle East and Africa region.
In the third quarter of 2023, like-for-like and trading day adjusted group revenue fell 7.1% on-year. The decline eased from 12% in the second quarter.
Oxford-based Essentra said: "Sales on a sequential quarter-on-quarter basis remain broadly stable as guided, whilst prior year comparatives have started to ease after a strong H1 2022 performance.
"EMEA performance in the third quarter has experienced market softening, in line with changes to the macro-economic environment. In AMERS, destocking behaviour continues to be observed in distributor end-market channels, whilst the APAC business continues to recover at a gradual pace, driven by the market dynamics in China."
AMERS includes Brazil, Canada, Mexico and the US.
Essentra said operating margins were "strong" and costs are being managed.
"Essentra continues to demonstrate through-cycle resilience, as it has historically, and is well positioned with a robust and differentiated business model, underpinned by its breadth of customers, market categories and geographies, as well as a strong balance sheet," it said.
However, due to a "softer trading environment", it now believes adjusted operating profit for the year will land at the lower end of an outlook range it did not specify.
In the first half of 2023, it reported an adjusted operating profit of GBP23.0 million, rising 52% on-year from GBP15.1 million.
By Eric Cunha, Alliance News news editor
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Essentra (ESNT)