- Year-to-date shares up 51%
- Overall sales growth of 14% reported
- CEO David Stirling to step down
Shares in Zotefoams (ZTF) traded 1.6% higher at 528p this morning as the specialty chemicals maker reported a trading update for the four months ending 30 April 2024 ahead of its annual general meeting.
The company said trading in the period had been strong with overall sales growth of 14%.
Sales of high performance products increased by 46% and footwear sales grew significantly by 44% after benefitting in part from customer inventory build.
On 7 May, Zotefoams announced a global alliance agreement with China-based foam and complementary technology company Shincell (Suzhou Shincell New Materials Co. Ltd).
Zotefoams will co-operate and ‘share technology’ with Shincell. Further details of the alliance will be given in August when the company reports interim results.
FORAY INTO CARTON PACKAGING MARKET
The speciality chemicals maker said on the 15 May that beverage solutions provider Refresco will be its new joint development partner, working with ReZorce – a Zotefoams mono-material barrier packaging company.
The company said: ‘Focused on the carton market, ReZorce is entering late-stage quality and technical validation in preparation for market trials with a European retailer.’
NEW CEO
Separately, Zotefoams confrimed that group CEO David Stirling would be stepping down after 27 years with the business as previously announced on 26 March 2024.
Stirling will be replaced by executive director Ronan Cox as group CEO designate. Cox joined the company on 2 April 2024. He will remain as CEO to ‘ensure smooth transition’ until 31 October 2024.
EXPERT VIEW
Analysts at Peel Hunt are upbeat about the specialty chemicals maker: ‘The share price is 56% higher than the 335p in our 19 March 2023 note. This reflects justified investor enthusiasm for the global alliance agreement with Suzhou Shincell, which is to last five years, with Zotefoams paying a technology licensing fee of circa £9 million over the period, including capitalised deal costs; and the announcement of Refresco as the joint development partner on the commercialisation of ReZorce.
‘The milestones are encouraging and bring the product closer to potentially realising value. In light of this, the company is considering options to capitalise on the opportunity, with a preference towards an investment partner to enable acceleration and de-risking of any potential scale-up. We keenly await more detail.’
