- Second upgrade in just three months
- Earnings driven by strong demand and price rises
- Sales growth accelerated in third quarter
Specialty materials-maker Zotefoams (ZTF) released an unscheduled pre-year-end trading update, raising its forecast for adjusted pre-tax profits for the second time in three months thanks to strong trading in the current quarter.
Investors celebrated the news, lifting the shares as much as 7% to 320p against a weak market backdrop.
WHY IS THE FIRM DOING SO WELL?
The company said in mid-October that trading for the first nine months of this year had been strong with revenues around 24% above last year thanks to ‘continued resilient demand across most of its end market segments’.
Better still, third-quarter revenue growth accelerated to 27% against what had previously been a record quarter in 2021.
The firm said revenues and margins were seeing ‘an increasing benefit from pricing actions implemented earlier in the year, in response to cost inflation, as well as from a weaker Sterling exchange rate, primarily against the US dollar’.
Looking ahead to the fourth quarter, it said that subject to there being no material disruption to the business pre-tax profits would be ‘significantly ahead’ of the consensus forecast of £9.3 million.
Today the company said that due to continued strong trading in October and November, and based on current exchange rates, earnings would top the latest consensus forecast of £10.7 million with the extent of the ‘beat’ dependent on the timing of customer shipments in the next few weeks.
WHAT DOES ZOTEFOAMS DO?
Zotefoams is the world’s leading maker of lightweight cross-linked polyolefin-block foams, which are stronger, lighter and more durable than rival materials and therefore save weight and energy.
Its various products are used in everything from air conditioning units to the aircraft industry, cars, chips, electronics, healthcare, transport and even sports and leisure equipment like cricket pads.
The company’s aim is to become the world leader in cellular-materials technology in markets with high levels of organic growth, both through its own brands and through partnerships and targeted acquisitions.
LEARN MORE ABOUT ZOTEFOAMS
