Essentra (ESNT) began life as cigarette-filter maker Filtrona, which was spun out of packaging group Bunzl (BNZL) back in 2005. Essentra has changed in more ways than just its name. Chief executive Colin Day, who joined three years ago, has led a strategic charge called Vision 2015 that targets at least mid single-digit like-for-like revenue growth and double-digit earnings growth.
Vision 2015 has gone well. So well in fact that Essentra should meet its objectives this year rather than next. First half like-for-like revenue growth hit 9 per cent and adjusted earnings per share jumped 15 per cent on a constant currency basis. Encouragingly, the pace of growth accelerated in the second quarter thanks to new business wins and further cost cutting.
So with the Vision 2015 push drawing to a close, what next for Essentra? Mr Day says the market will hear more about the group's strategic plans at an update in November. He tells us to expect, "more of the same, but a bit more aggressive."
Acquisitions are also likely to feature heavily in Essentra's future given management tells us recent refinancing has given them a £250m war chest.
Deutsche Bank expects adjusted pre-tax profit of £137m for the full year, giving earnings per share of 41.3p (from £120m, 37.1p in 2013).
| ESSENTRA (ESNT) | ||||
|---|---|---|---|---|
| ORD PRICE: | 777p | MARKET VALUE: | £1.8bn | |
| TOUCH: | 777-778p | 12-MONTH HIGH: | 924p | LOW:712p |
| DIVIDEND YIELD: | 2.1% | PE RATIO: | 28 | |
| NET ASSET VALUE: | 169p* | NET DEBT: | 55% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 385 | 45.4 | 13.9 | 5.0 |
| 2014 | 431 | 49.2 | 15.2 | 5.7 |
| % change | +12 | +8 | +9 | +19 |
Ex-div: 24 Sep Payment: 30 Oct *Includes intangible assets of £383m, or 162p a share | ||||
