17th Dec 2021 13:52
(Alliance News) - Zotefoams PLC on Friday said its annual sales are on track to beat market forecasts, though it noted increased costs and supply chain challenges that are impacting the timing of shipments.
The cellular materials technology company said that full-year revenue shipped to date was approximately GBP95 million.
The Croydon, England-based firm added that its full-year order book is supporting sales of approximately GBP101 million, up 22% from GBP83 million the year before.
It is, therefore, slightly ahead of market censuses expectations.
Nonetheless, recently encountered supply chain issues have temporarily delayed the "in-bound" supply of product, primarily at the company's UK facilities.
Although Zotefoams affirmed that these issues have been substantially resolved now, the cellular materials technology firm still expects them to impact the timing of shipments on both sides of the year ended.
The company expects GBP1 million of orders to be shipped in 2022 now with the risk of a further GBP3 million of orders also being delayed until 2022.
The drop through margin of these products is within a range of 50% and 75%, Zotefoams said.
The company added that it experienced some short notice cost surcharges from energy-intensive suppliers, which increased its costs in the final quarter.
Zotefoams explained further that without the shipping delays these costs were originally expected to be offset by the improved sales performance, with pricing adjustments to be made in 2022.
"It is encouraging to see good organic revenue growth and we have actively engaged with customers to secure price increases in 2021 and have also agreed further price increases effective early in 2022. This does, however, remain a challenging environment for many businesses, dealing with inflationary pressures, supply chain challenges and uncertainty," Chief Executive David Stirling commented.
He added: "It is disappointing that, given how close we are to the year end, this supply chain issue will impact 2021 shipments. However, these orders will be delivered early in the new year and the strong commercial momentum we have seen through the year 2021 positions the group very well for further progress in 2022 and beyond."
Shares were down 4.8% at 395.00 pence each on Friday afternoon in London.
By Abby Amoakuh; [email protected]
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