Essentra (ESNT) chief executive Paul Forman joked to analysts that the specialist packaging group resembled a patient “tottering out of the recovery ward”, as his turnaround returned it to profitability for the first time since 2015.
The group’s components division led the way with 6 per cent like-for-like revenue growth, despite weaker performance in the second half, while packaging revenues were flat and revenues fell in the filters and specialist component divisions. Essentra claims that it has progressed well with integrating Micro Plastics into the components division, after acquiring it in 2017, and Mr Forman said the group wants to make more acquisitions in this area. He targets a return to industry margins by 2021, which will require operating margin improvement of around 200-250 basis points every 12 months. On a constant currency basis, packaging grew by 200 basis points in 2018.
Broker Peel Hunt forecasts full-year 2019 pre-tax profits and earnings per share of £85.2m and 24.5p, respectively, up from £83.5m and 24.1p in 2018.
| ESSENTRA (ESNT) | ||||
| ORD PRICE: | 385p | MARKET VALUE: | £1.01bn | |
| TOUCH: | 385-386p | 12-MONTH HIGH: | 517p | LOW: 325p |
| DIVIDEND YIELD: | 5.4% | PE RATIO: | 41 | |
| NET ASSET VALUE: | 225p* | NET DEBT: | 40% | |
| Year to 31 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2014 | 0.87 | 99.7 | 30.0 | 18.3 |
| 2015 | 1.01 | 73.8 | 21.4 | 20.7 |
| 2016 | 1.00 | -62.5 | -19.8 | 20.7 |
| 2017 | 1.03 | -4.9 | 1.5 | 20.7 |
| 2018 | 1.03 | 36.3 | 9.3 | 20.7 |
| % change | - | - | +520 | - |
| Ex-div: | 25 Apr | |||
| Payment: | 03 Jun | |||
| *Includes intangible assets of £528m, or 201p a share | ||||
