Essentra to meet market expectations after strong end to 2021

(Alliance News) - Essentra PLC on Friday said that it expects annual profit to meet market forecasts, following a promising end to 2021.

Essentra said like-for-like revenue increased 13% annually in the fourth quarter and was up 11% from pre-pandemic times.

Essentra expects operating profit to meet the current market forecast range of GBP80.7 million to GBP84.3 million, which could be as much as a 36% rise from GBP62.0 million in 2020.

The company, which manufactures plastic caps, workholding clamps, fasteners and knobs, said all three divisions of its business have performed well, despite "a backdrop of continued global supply chain disruptions".

Essentra's component division saw an increase in adjusted revenue of roughly 19% in the final quarter of 2021 up on the previous year.

The filters division also delivered a strong performance, with revenue up 22% during the same period. The FTSE 250-listed manufacturer attributes this to high volumes of outsourcing contracts and a strong performance in European markets.

Notwithstanding ongoing supply chain challenges that are impacting the availability of raw materials, the packaging division will finish the final quarter with a margin slightly below 8%. The stabilisation of a volatile labour market in the US aided the division's improvement.

Essentra's said its joint venture in China continues "to gain momentum" after successfully launching in June 2021.

Essentra's Chief Executive Paul Forman said: "We have delivered a strong Q4 performance with all three businesses delivering growth and having encouraging order books as we start the year. We continue to monitor Covid-19 challenges and take actions to offset the impact of global supply chain challenges, which should better position our market leading global businesses for growth in their respective markets.

Essentra shares rose 2.0% to 347.32 pence each in London during Friday morning trading.

The Milton Keynes-based manufacturer expects strategic reviews of its packaging and filter divisions to conclude in the second quarter of the calendar year in 2022.

By Elizabeth Winter; elizabethwinter@alliancenews.com

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