Zotefoams
plc
("Zotefoams" or "Group")
Full Year Trading Update and
Notice of Capital Markets Day
Strong revenue growth and
record profitability ahead of market expectations
23
January 2025 - Zotefoams, a world
leader in supercritical foams, today provides a trading update for
the Group's financial year ended 31 December 2024
(unaudited).
The Board is pleased to report that,
following a strong performance in Q4, the Group expects to report
full year revenue of £147.8m (2023: £127.0m). This is slightly
ahead of current market expectations and represents a significant
increase (+16%) compared with the prior year.
Adjusted profit before
tax1 for the year is expected to be £15.6m (2023:
£13.1m), up 19%, which is a Group record and also ahead of current
market expectations.2
The improved profit performance
comprises two distinct elements:
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An 18% increase in the combined
profitability of polyolefin and HPP business units (the "foams
business units") to £20.3m (2023: £17.2m), led by 46% growth in
Footwear sales and further progress on efficiency savings, and
after a £1.0m inventory provision following an in-depth assessment
of recoverability
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An adjusted segment loss of £4.7m in
the MuCell Extrusion (MEL) business unit (2023: £4.1m loss),
reflecting Group expenditure during the year to progress the
ReZorce® circular packaging opportunity, which has now
ceased
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Year-on-year performance for the Group's core foams business units
were as follows:
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37% growth in High Performance
Product (HPP) sales to £79.7m (2023: £58.1m), led by the Footwear
performance
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AZOTE® polyolefin sales
were down 1% to £66.9m (2023: £67.6m), reflecting weaker market
conditions in a number of industrial markets
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In December, the Group announced its intention to cease investment
in ReZorce, having been unable to secure an investing partner to
realise the commercial potential of the technology. While this was
disappointing, and the Board continues to believe in the potential
for this technology, it will allow the Group to focus resources on
opportunities in the core foams business units, where the Board
sees significant opportunity. The MEL business unit assets will be
impaired and closure costs of up to £1.5m accrued, which will be
accounted for as an exceptional item in our 2024
results.
Zotefoams is currently investing
approximately £10m in a second low-pressure vessel and related
additional warehouse space at its US subsidiary, to increase
capacity and reduce reliance on the current vessel which was
installed in 2000. The process is on track and to budget, with
expected commissioning in H2 2025.
The Group balance sheet remains
strong, with significant financial headroom and a year-end leverage
multiple3 expected to fall to
approximately 0.9x (2023: 1.2x), affording flexibility to execute
on our strategic plans.
Commenting on the update Ronan Cox,
Group CEO of Zotefoams, said:
"We are delighted to close the year
strongly, with sales growth and, for a second year running, record
profits ahead of current market expectations. The Group has, for the first time, achieved higher sales
with its higher-margin HPP products than its polyolefin foams,
supported by a very strong performance in Footwear.
"We are disappointed that we were
unable to find a partner to commercialise ReZorce, our
award-winning packaging solution that offers significant
sustainability benefits. The cash savings we will capture will be
directed to growth in our refreshed strategy and I am excited to
present this to the investor community with my executive team on
the afternoon of 18 March as part of a capital markets
day.
"Building
upon our century-long heritage in specialist foam manufacturing,
Zotefoams is expanding beyond our core capabilities through
strategic investments and deeper customer partnerships. By
leveraging our supercritical foam technology and investing in
innovation and customer-focused manufacturing capabilities, we will
strengthen our position to capture long-term growth opportunities
driven by the increasing demand for sustainable, innovative,
lightweight and durable materials."
1 The adjustment to reported numbers is related to amortisation
on acquired intangibles of £0.3m (2023: £0.3m), exclusively from
MuCell Extrusion LLC and the exceptional item arising from the
impairment of MEL
2 Zotefoams-compiled consensus expectations, for the year ending
31 December 2024, are £145.5m for net revenue and £14.9m for
adjusted profit before income tax as at 22 January 2025
3 Leverage multiple is calculated as Group net debt divided by
EBITDA (before exceptional items), where Group net debt is adjusted
from IFRS by the impacts of IFRS2 and IFRS16 under the bank
facility definition.
Notice of Capital Markets
Day
Zotefoams intends to hold a capital
markets day for analysts and institutional investors at 2.30pm on
Tuesday 18 March 2025 at the offices of Peel Hunt, its joint
broker. Ronan Cox, CEO, and Gary McGrath, CFO, will be joined by
other members of the senior leadership team to provide insights
into the Group's business units and key growth drivers. Parties
interested in attending are requested to contact IFC Advisory
on zotefoams@investor-focus.co.uk.
Notice of results
The Group expects to publish its
preliminary results for the year ended 31 December 2024 on Tuesday
18 March 2025.
Enquiries:
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Zotefoams plc
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+44
(0) 208 664 1600
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Ronan Cox, Group CEO
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Gary McGrath, Group CFO
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IFC
Advisory (Financial PR & IR)
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+44
(0) 203 934 6630
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Graham Herring
Tim Metcalfe
Zach Cohen
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zotefoams@investor-focus.co.uk
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About Zotefoams plc
Zotefoams plc (LSE - ZTF) is a world
leader in cellular materials technology delivering optimal material
solutions for the benefit of society. Utilising a variety of unique
manufacturing processes, including environmentally friendly
nitrogen expansion for lightweight AZOTE® polyolefin and
ZOTEK® high-performance foams, Zotefoams sells to
diverse markets worldwide. Zotefoams uses its own cellular
materials to manufacture T-FIT® advanced insulation for
demanding industrial markets. Zotefoams also owns and licenses
patented microcellular foam technology to reduce plastic use in
extrusion applications and for ReZorce® mono-material
recyclable barrier packaging.
Zotefoams is headquartered in
Croydon, UK, with additional manufacturing sites in Kentucky, USA
and Brzeg, Poland (foam manufacture), Oklahoma, USA (foam products
manufacture and conversion), Massachusetts, USA, Stilling, Denmark
(microcellular foam technology) and Jiangsu Province, China
(T-FIT).
www.zotefoams.com
AZOTE®,
ZOTEK®, ReZorce® and T-FIT® are
registered trademarks of Zotefoams plc.