- Record pre-tax profits of £12.2 million
- Dividend increase of 5% for shareholders
- Benefit from the stronger US dollar
Specialty materials-maker Zotefoams (ZTF) reported record pre-tax profits of £12.2 million for the year ending 31 December 2022 - a rise of 74% compared to the previous year.
Highlights also included an 80% increase in cash generation from operations, with free cash flow of £14 million compared to £3.9 million in 2021. Net debt reduced from £34.3 million to £27.8 million.
There was further growth within its High-Performance Products (HPP) division in relation to footwear ‘where we have worked closely with our partner to develop more long-term opportunities’, the company said.
Earnings per share were up 129% to 20.61p as the specialty materials maker reported strong growth across all business units.
The company’s shares dropped over 3% to 336.40p, however, as Zotefoams fell victim to profit-taking in early trading.
DIVIDEND INCREASE
It was good news for shareholders as the company’s board is proposing a 5% increase in the total dividend for the year of 6.80p compared to 6.50p in 2021.
If approved, the final dividend will be paid on 2 June 2023 to shareholders on the register on 5 May 2023.
David Stirling, Group chief executive, said: ‘2023 has started well, with demand for our polyolefin foam products in line with the previous year but with higher revenue from price increases implemented over the past twelve months.
‘Sales of high-performance products are showing strong growth in the first few months, mainly due to the timing of shipments compared to the prior period. Sales across both businesses continue to benefit from a stronger US dollar.
‘Whilst uncertainty persists, we currently expect that, for the year, polyolefin foams volumes will be at a similar level to last year, with more challenging conditions in the UK and continental Europe offset by growth in North America and other geographies.’
KEEP ON RUNNING
Stirling told Shares he was hopeful for the coming year: ‘We will continue to innovate with our new unique technology, and focus on our sustainability targets by reducing water, energy and CO2 output.
‘We are also making headway with the existing management of our company with the appointment of a new non-executive director Jonathan Carling, as well as announcing a zero gender-pay gap for the company, highlighting progress within the manufacturing sector.’
Zotefoams will continue to develop and maintain their relationships with aircraft makers Boeing (BA:NYSE) and Airbus (AIR:EPA) and well-known athletic footwear brand Nike (NKE: NYSE), which has been ongoing since 2016.
The specialty materials maker developed a ‘revolutionary midsole system’ for Nike consisting of lightweight, resilient Zotefoam and a stiff carbon fibre plate, which became known as ZoomX.
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