Reported profits for Essentra (ESNT) dipped at the half-year mark on the back of exceptional costs, while the group's exposure to a beleaguered oil and gas industry is also weighing on performance. Essentra, a producer of industrial plastic and fibre products, revealed a 7 per cent decline in operating profits to £50.4m, due partly to one-off costs relating to the acquisition of Clondalkin Specialist Packaging. However, strip out these effects, along with currency movements, and profits were 17.5 per cent to the good at £82m.
First-half revenues contracted for the group's specialist technologies division, as remits from the oil and gas industry started to dry up. Worst hit was Essentra's sales of pipe protection technology, where like-for-like revenues fell by nearly two-thirds as the North American rig count clicked firmly into reverse. The outlook for oil and gas markets remains negative, but it’s a relatively minor part of Essentra's well diversified business model.
Elsewhere in the division, product launches and contract awards helped to drive business activity within the healthcare, porous technologies and specialty wipes segments. There was also good news from Essentra's distribution division, which benefited from improved trading conditions across Europe and the opening of a regional distribution centre in Asia.
Deutsche Bank give adjusted full-year EPS of 49.55p, against 41.23p for 2014.
| ESSENTRA (ESNT) | ||||
|---|---|---|---|---|
| ORD PRICE: | 913p | MARKET VALUE: | £2.4bn | |
| TOUCH: | 911-913p | 12-MONTH HIGH: | 1,069p | LOW: 625p |
| DIVIDEND YIELD: | 2.1% | PE RATIO: | 32 | |
| NET ASSET VALUE: | 224p* | NET DEBT: | 61% | |
| Half-year to 30 June | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 431 | 49.2 | 15.2 | 5.7 |
| 2015 | 550 | 45.1 | 13.7 | 6.3 |
| % change | +28 | -8 | -10 | +11 |
Ex-div:24 Sep Payment:30 Oct *Includes intangible assets of £677m, or 258p a share. | ||||
