21st Oct 2022 10:40
(Alliance News) - Essentra PLC on Friday said it was optimistic of creating more business opportunities moving forwards, despite the disposal of its Filters and Packaging divisions earlier this year.
In 2021, the Milton Keynes, England-based components, packaging and filter producer announced its intention to become a solely components-based business.
In line with this objective, Essentra sold its Packaging business in June 2022 to the Mayr-Melnhof Group for GBP312.0 million. It then announced the sale of its Filters business in October 2022, this time to a subsidiary of Centaury Management Ltd for GBP262.1 million.
The Filters division is an independent cigarette filter supplier, currently headquartered in Singapore, with 12 sites across 9 countries. Essentra said the sale, which remains on track to be complete no later than January 31, would give it more flexibility to pursue "value creating" opportunities, namely future bolt-on acquisitions.
In its most recent trading update, Essentra said both divisions will be accounted for as discontinued operations in its full-year results. For the third quarter, Packaging and Filters delivered growth of 30% and 35%, respectively, compared to the year prior.
The company also reported like-for-like revenue growth of 11% for the quarter, on a continuing operations basis, compared to a year prior.
It said it had experienced continued success in mitigating inflationary pressure through pricing, in turn driving revenue growth and protecting profitability.
Looking ahead, Essentra said that investing in the business remains a focus. In September, the company built a new distribution hub in Poland, which it said would service 20,000 product lines across Europe, laying the foundations for future growth.
Although the company expects slower economic growth in the fourth quarter, adjusted operating profit for the financial year remains in line with its expectations. In 2021, Essentra reported an adjusted operating profit of GBP83.9 million.
Essentra shares were trading 2.2% lower at 203.41 pence each in London on Friday morning.
By Holly Beveridge; [email protected]
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