- Move will incur one-off cost of £1.2 million
- Shares fall 12% year-to-date
- Full year trading expected to be in line
Shares in Zotefoams (ZTF) fell over 7% to 300p in morning trading as the speciality materials maker said it will be winding down the operations of its MuCell business unit which includes its mono-material barrier packaging company ReZorce.
ReZorce uses proprietary microcellular foaming technology to create circular packaging for beverage cartons and is a fully recyclable mono-material.
The company said the exit ‘is expected to reduce ongoing group overheads and will allow resources to be re-deployed into the foams business.’
The reason for the exit is Zotefoams has been unable to find a strategic partner for ReZorce and specialist external advisers to support commercial development.
WHAT DID THE CEO SAY?
Ronan Cox CEO of Zotefoams said: ‘Given how the unique aspects of, and the opportunity from, ReZorce are significant, it is disappointing that we have not been able to find a partner able to commit to this truly disruptive technology capable of giving consumers a recyclable and circular packaging solution.
‘This decision will allow us to redirect the considerable financial resources that we have been dedicating to the ReZorce project to focus on the exciting opportunities we have within the core Zotefoams business, and we will be sharing our plans in this regard at a capital markets day expected early in 2025.’
Cox is relatively new to the role, after joining the company on 2 April to replace David Stirling who had been with Zotefoams for 27 years.
TRADING IN LINE
Separately the company said it was trading in line with expectations for the full year despite a volatile market.
Zotefoams-compiled consensus expectations for revenue is £145.5 million and adjusted profit before income tax and separately disclosed items is £14.9 million for the year ending 31 December.
