Zotefoams on a capacity drive

Sales figures also bear this out; a 17 per cent rise in the top line at constant currencies, driven by surging volumes in High-Performance (HPP) and MuCell Extrusion products. Prices for the group’s main feedstock were stable despite wider inflationary pressures, so gross profits were up a quarter to £25.5m on a 90-basis point increase in the underlying margin.

The group isn’t standing still. It is expanding capacity in the US through a three-year, $33m (£23.7m) investment in production facilities located in Kentucky, while initiating further development closer to home, via a Croydon-based plant that increases low-pressure capacity for its HPP businesses “by a factor of six”. This capital investment, together with expansion-related working capital growth, increased net debt by £5.4m to £18m during the period.

It’s important to keep tabs on the day-to-day operations even when you’re in expansionary mode, so investors will be reassured by improved collection of receivables and a 57 per cent increase in net operating cash flow to £9.98m.  

Investec gives adjusted pre-tax profits of £10.1m for the December 2018 year-end, leading to EPS of 17.8p, against £9.2m and 17.1p in 2017.