Trading performance
Since the onset of COVID-19, as the year has progressed, Group revenue on a LFL basis has shown steady improvement - going from -9.8% in Q2, to -6.7% in Q3 and finally improving to -1.1% in Q4 (which equates to -3.9% for H2). As a result, the Company is expecting to deliver a total FY20 operating profit number in line with the consensus of analysts' forecasts1.
The Components division is recovering well. Q2 revenue was -20% LFL on the prior year period, improving to -13.9% in Q3 and -0.4% in Q4. Overall for H2, Components was 7.2% down on a LFL basis. Recent order book trends are demonstrating continued steady progress across all regions. Our enhanced online offer continues to differentiate us, whilst our new state-of-the-art German warehouse has recently become operational, providing an enhanced logistical platform from which to drive the European Components business. The division has recently conducted its annual customer survey and is very pleased to report that despite all of the challenges faced in 2020 due to the impact of COVID-19, our customers have rated us with a net promoter score (NPS) of 45 points - which is a 4 point improvement on the prior year.
As reported previously, the Packaging division has seen softness in certain end markets owing to a reduction in the levels of prescriptions and elective surgeries through lockdown periods. This trend has continued in Q4, with a LFL decline of 1.3% (though much improved on the -8.5% seen in Q3), meaning that H2 has closed 4.9% below prior year on a LFL basis. However, recent order book trends have been somewhat improving, as the pharmaceutical and beauty markets start to slowly recover and we build on strong customer relationships. The division continues to play its part in supporting the healthcare industry in its fight against COVID-19, helping to produce secondary packaging for anti-viral and vaccine products, and has recently been honoured with the coveted award of
The Filters division had a tougher end to the year, recording a 1.5% decline in Q4, which was driven by certain logistical challenges in shipping product in
Balance sheet strength and liquidity
The Company maintains a strong balance sheet and delivered positive cash generation in Q4 hence our overall liquidity position at the end of December was cGBP285m.
The Company expects to close FY20 comfortably within its targeted gearing range of between 1x to 2x (net debt/EBITDA), providing the platform from which it can explore and drive further strategic opportunities.
Strategic Initiatives
The Company has undertaken a detailed review of its global footprint, which has resulted in the proposed closure of certain sites in 2021, across the
Brexit
Now that the
Contact:
Lucy Yank
Tel: +44 (0)1908 359100
About
Headquartered in the
Essentra Components
Essentra Components is a global market leading manufacturer and distributor of plastic injection moulded, vinyl dip moulded and metal items. Operating in 29 countries worldwide, 14 manufacturing facilities and 29 logistics centres serve more than 85,000 customers with a rapid supply of low cost but essential products for a variety of applications in industries such as equipment manufacturing, automotive, fabrication, electronics and construction. The division also includes the Reid Supply business, which provides a wide range of branded hardware supplies to a broad base of industrial customers, largely located in the US Mid-West.
Essentra Filters
Essentra Filters is the only global independent cigarette filter supplier. The seven worldwide locations, plus a dedicated Technology Centre supported by three regional development facilities, provide a flexible infrastructure strategically positioned to serve the tobacco sector. The business supplies a wide range of value-adding high quality innovative filters, packaging solutions to the roll your own segment and analytical laboratory services for ingredient measurement to the industry:
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