Croydon's Zotefoams announces record Q3 sales
Croydon-based Zotefoams, a manufacturer of cellular materials, has announced a record sales performance in its latest trading update.
The update covers the nine months ended 30 September, and looks forward to the end of Zotefoams’ financial year on 31 December 2022.
The record sales performance in Q3 represents an approximately 27 per cent increase on Zotefoams’ performance in its previous record quarter, Q3 of 2021. This has taken Group revenue approximately 24 per cent ahead of the comparable period last year.
The company's share price has jumped by 30 per cent in response to the news:
This success is built on a strong showing in the company’s three business segments, with sales having increased by 27 per cent in Polyolefin Foams, 20 per cent in High Performance Products, and 11 per cent in MuCell Extrusion.
The group notes, however, that MuCell Extrusion sales represented only around 2 per cent of Group revenues, with the focus for the business being on the technical and commercial development of ReZorce® mono-material packaging solutions.
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Aside from energy prices, the inflation of input cost has subsided recently, with commodity polymer prices declining from all-time high levels experienced late in the first half of this year. The Government’s pricing actions have also reduced some of the short term risk surrounding energy pricing.
As a result of current sales forecasts and foreign exchange rates, providing there is no disruption to the business, Zotefoams’ board now expects adjusted profit before income tax to be significantly ahead of market expectations at £9.3 million.
With cash generation remaining strong, the improved earnings forecast should noticeably reduce both net debt and leverage.
David Stirling, Group CEO of Zotefoams, said: "I am delighted that Zotefoams is performing well in this volatile market environment which is a credit to our people, market positioning and strategy.
“Our exposure to a wide range of attractive markets has enabled us to deliver continued volume growth, which has been supported by the pricing actions taken earlier in the year.
“We are mindful of the challenging backdrop but continue to see significant opportunity for the Group in both the short and longer term."
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Featured image: iStock/Zotefoams
