1st Mar 2019 08:36
LONDON (Alliance News) - Plastic and fibre products maker Essentra PLC held its dividend steady on Friday after it returned to profit in 2018 on a fall in one-off costs, despite flat revenue.
The FTSE 250-listed firm swung to a GBP36.3 million pretax profit in 2018 from a GBP4.9 million loss in 2017. This was despite revenue dipping modestly, but remaining broadly flat at GBP1.03 billion on the year before.
Profit performance was helped by a sharp fall in costs associated with acquisitions. In 2018, the firm incurred GBP20.8 million in such charges compared to GBP56.2 million in 2017.
In December 2017, Essentra acquired US nylon fasteners manufacturer Micro Plastics for an undisclosed sum. In July 2018, it picked up Swedish plastic components maker Nolato Hertila AB for GBP4.9 million.
Adjusted pretax profit - excluding exceptional items - widened to GBP80 million from GBP74 million the year prior.
"At our half year 2018 results, when we reported profit growth from a stable revenue base for the first time in three years, I stated my firm conviction that we had turned a corner," Essentra Chief Executive Officer Paul Forman said.
"We have maintained this strategic momentum during the second half - importantly, with our Packaging division returning to growth as anticipated, underpinned by continuing improvement in our customer relationships - and I am confident that we have restored Essentra to a position where future revenue and profit growth can be sustained," Forman added.
"Of course, there is more for us still to do", Forman continued. "However, I am proud of the great strides we have taken in 2018 versus our stated change plan to restore sustainable growth, and have every faith in our ability to deliver further improvement and achieve success together as a team."
Essentra proposed a 14.4 pence per share final dividend, unchanged on the year prior. For the full year, the dividend also remained flat at 20.7p on the year before.
"Heading into 2019, the macro economic environment is uncertain," Forman said. "However, while our Components division - and elements of Specialist Components - are more exposed to industrial segments with a certain degree of cyclicality, much of our group serves end-markets which are non-cyclical in nature."
"Accordingly, as we continue to drive the agenda and deliver the stated objectives for each of our divisions, we expect to make further strategic progress in 2019," Forman concluded.
In a separate announcement, Essentra explained Non-Executive Director Lorraine Trainer will stand down at its annual general meeting, usually held in April.
Former Deloitte LLP partner Nicki Demby will join as non-executive from the start of June. She will also take on the role of chair of the remuneration committee from Trainer.
Shares in Essentra were 2.0% higher at 384.40 pence on Friday.
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