(Alliance News) - Essentra PLC on Wednesday hailed pricing actions and "disciplined cost management", as it swung to pretax profit in the first half despite seeing sales fall.
For the six months ended June 30, the Oxford-based components company reported revenue of GBP166.3 million, down 5.5% from GBP175.9 million a year prior.
According to Essentra, the first half in 2022 was particularly strong, due to "significant end-market recovery" and "easing supply chains".
Accordingly, gross profit fell 5.9% to GBP73.0 million from GBP77.6 million year-on-year.
Meanwhile, pretax profit was GBP10.3 million, swung from a loss of GBP10.7 million. Operating profit was also GBP10.3 million, up from GBP1.0 million the previous year.
Essentra told investors that pricing actions at the start of the year, combined with disciplined cost management initiatives, have supported margin performance. It said these partly offset sales volume decline in the period, and would continue to benefit the business in the second half of the year.
Looking ahead, the firm's guidance for 2023 remained unchanged. In March, following the publication of its annual results, Essentra said: "Although we continue to see distributor destocking, trading in Europe continues to be robust and China's reopening will increasingly benefit our business in Asia."
It added on Wednesday: "The business remains resilient and has the ability to manage volume impacts, through implementation of pricing actions, and careful cost management."
Essentra declared an interim dividend of 1.2 pence, down 48% from 2.3p year-on-year.
"Essentra has shown financial and operational resilience in its first half year as a pure-play Components business, making further progress towards our medium-term targets, despite the macro-economic backdrop," said Chief Executive Scott Fawcett.
"We expect to make further progress in the second half of the year, supported by continued cost management initiatives, maintaining our pricing actions, and delivering new business wins. Our strong balance sheet supports organic growth and further investment in disciplined, value enhancing M&A. Our expectations for 2023 remain unchanged."
Essentra shares were trading 4.4% higher at 162.00 pence each in London on Wednesday morning.
By Holly Beveridge, Alliance News reporter
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Essentra (ESNT)