Essentra's elevated earnings exceed expectations

Accelerated sales momentum in the last three months of the year helped plastics group Essentra exceed expectations for 2014, with the bolt-on acquisition of Specialty Plastics in Australia also confirmed on Friday for an undisclosed cash sum.Revenues for the calendar year expanded 14% at constant currencies to £866m, with like-for-like revenue rising 8.5% over the year thanks to like-for-like growth of 10% in the fourth quarter.Adjusted pre-tax profits rose 19% to £133.4m at constant currencies, with adjusted earnings per share up 19% to 41.9p, well ahead of Bloomberg consensus at 39.8p and Reuters at 40.1p, as the business continued to extract costs and synergy savings from acquisitions.Essentra attributed its growth to ongoing operational initiatives, volume leverage and better pricing, which counterbalanced very strong growth in the lower-margin filter products division and inventory destocking in the higher-margin porous technologies division.Management increased the full year dividend 19% to 18.3p per shareChief executive Colin Day said the revenue and earnings growth meant the company not only bested the board's 'Vision 2015' strategy's objectives in the three-year period since it was implemented."The results were supported by a continued focus on product innovation, more sizeable business wins, ongoing product innovation and further expansion in both existing and new markets, supported by further cost reduction and efficiency programmes," he said."In addition, we made good progress in terms of acquisitions, both in terms of the delivery of synergy savings from recent transactions, and of adding further value-creating assets to the group."He pointed to the completion shortly after the year end of the group's largest ever acquisition, of the specialist packaging division of Clondalkin Group in November."Accordingly, Essentra is well-positioned to continue its track record of balanced, profitable growth in 2015 under its 'Drive for 2020' strategy, notwithstanding the current economic climate."The Drive for 2020 strategy calls for strong conversion of profit into cash and a progressive dividend policy, with management looking to continue purchasing value-adding acquisitions. Essentra