Essentra PLC on Tuesday said it expects to post a decline in both profit and revenue for 2024, as it contended with ‘softening’ end-market activity and unfavourable foreign exchange rates.
The Oxford, England-based manufacturer and distributor of plastic injection moulded, vinyl dip moulded and metal components said it expects to deliver adjusted operating profit for 2024 in line with current market expectations, citing a company-compiled consensus range of £39.8 million to £40.3 million.
This would represent between a 6.9% and 8.2% reduction from the £43.2 million adjusted operating profit recorded for the group in 2023.
Essentra expects group revenue for the year to grow by 0.3% on a constant currency basis, reflecting ‘mixed end-market conditions, including a softening in [Europe, the Middle East & Africa] end-markets in the latter part of the year’.
Reported group revenue is expected to be down 4.4% from £316.3 million last year, with foreign exchange rates hurting revenue by around 5%.
Essentra will release its 2024 results on March 19.
Chief Executive Officer Scott Fawcett said: ‘While end-market conditions throughout the year have been mixed, Essentra’s global manufacturing and distribution footprint, and operational flexibility have supported the delivery of regional gross margin stability.’
Fawcett continued: ‘Whilst we are taking a cautious view on the timing of any material improvement in end-market conditions, we remain focused on continuing to deliver on the elements that remain within our control. We will drive operational excellence to ensure customers receive enhanced levels of service; we will optimise our efficiency to support operating leverage and margins; and we will continue to invest selectively with returns discipline for growth.
‘This approach, in combination with our differentiated business model, supports our confidence in our ability to deliver progress on our strategic objectives, and benefit from material levels of operational gearing as market conditions improve.’
Shares in Essentra were down 1.6% at 120.40 each in London on Tuesday morning. The firm’s shares have fallen 26% in the last six months.
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