Zotefoams Set For Record Second Half After Weak Interim Performance

(Alliance News) - Zotefoams PLC on Tuesday said it expects to report record sales in the second half of 2020 after a double-digit fall in the first half.

Zotefoams makes closed-cell crosslinked polyolefin foams used in building insulation, automobiles and electronics, among other uses.

It reported a decline in revenue of 18% for the six months to the end of June to GBP34.6 million from GBP42.3 million, resulting in a 45% pretax profit drop to GBP2.7 million from GBP4.9 million.

Zotefoams said it has experienced broad-based declines in demand in many of its main markets, particularly for Polyolefin foams, as supply chains reacted to lower end-user demand and high levels of uncertainty.

"Despite the impact of Covid-19 on the first half, the group responded quickly and effectively to the challenges, implementing a number of operating, cost management and capital expenditure actions to protect the financial and operational capability of the business, with positive results," said Chief Executive David Stirling.

Zotefoams said it will be paying an interim dividend of 2.03 pence per share, unchanged year-on-year, on October 9 to shareholders on the company's register at September 11.

"We expect the second six months of 2020 to deliver record sales, beating the previous best half year sales of GBP43.1 million. Our expectations are based on relatively subdued but stable demand in most polyolefin foams markets other than PPE, where demand is very strong, and a much stronger second half for footwear products and T-FIT technical insulation, continuing the momentum experienced late in the first half," added Stirling.

Zotefoams shares were trading 11% higher in London on Tuesday at 398.00 pence each.

By Evelina Grecenko; evelinagrecenko@alliancenews.com

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