23rd Mar 2021 11:39
(Alliance News) - Zotefoams PLC on Tuesday reported a rise in revenue but a decline in profit in 2020, as a boom in sales of trainers and personal protective equipment offset weakness in the auto and aviation industries.
The Croydon-based company, which manufactures industrial plastics, made profit before tax of GBP8.3 million, down 5.7% from GBP8.8 million in 2019. Revenue increased by 2.2% to GBP82.7 million from GBP80.9 million in 2019.
Shares were up 0.5% to 430.00 pence in London.
Zotefoams, which has an exclusive relationship with Nike Inc to supply foams used in trainers, said footwear made up over a quarter of revenue, up from 16% in 2019. It also supplied a "significant volume" of foams for a personal protective equipment contract with the UK government. That helped to offset the Covid-19 downturn in its other product lines, including materials used in cars and planes.
The company proposed a final dividend of 4.27p per share, bringing the total payout for 2020 to 6.3p. That's up from 2.03p per share total for 2019, when the final dividend was cancelled on the outbreak of the pandemic.
Zotefoams said it is seeing a strong start to 2021, consistent with its growth expectations. But it remains cautious for its short-term outlook because of the pandemic, and logistics challenges caused by Brexit. It said it will offset inflation in raw materials by raising prices in the second quarter. The company expects a new factory in Poland, which opened last month, to grow its customer base in Europe.
Chief Executive David Stirling said: "Zotefoams demonstrated resilience and flexibility under very difficult macroeconomic conditions in 2020, while continuing to make good strategic progress and adding to its broad range of exciting business opportunities.
"We expect to deliver significant growth this year. However, our cost base will increase, reflecting a return to more normalised levels of spending, the new Poland facility coming on stream and selective investment to support our best growth projects."
By Ivan Edwards; [email protected]
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