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Essentra returns to profits growth

Published: 04:33 03 Aug 2018 EDT

Packaging
The packaging business has stabilised and the group anticipates a year-on-year improvement in revenue and margin trends

Specialist components, filters and packaging provider Essentra PLC (LON:ESNT) continued its recent rally after returning to profit growth in the first half of 2018.

Revenue in the first half of the year dipped to £513.1mln from £522.6mln but was unchanged on a like-for-like basis.

READ: Essentra narrows 2017 loss and reports rise in revenue as it restructures the business

Profit before tax increased to £20.8mln from £19.4mln with the group saying margins improved in three of its four operating division. The adjusted operating margin for the group as a whole improved to 8.5% from 8.2% a year earlier.

The group said it expected the financial improvement to continue for the rest of the year.

The half-year dividend was maintained at 6.3p.

"I am pleased by the group's continued transformation and the progress we have made on our strategic objectives in the first half of 2018, returning the company to profit growth while maintaining widespread stability across the organisation,” said Paul Forman, the chief executive officer of Essentra.

“I believe we have now turned a corner in packaging, although there is still much to do. The sequential improvement in 2018 in both the revenue trend and profitability is testament to the significant efforts we have made to stabilise the business, to focus on doing the basics better and to become an increasingly valued partner to our customers. As a result, our Europe & Asia packaging business returned to underlying growth (i.e., adjusting for the closure of our Newport cartons site), and we are confident of reaching an inflexion point for the entire packaging division during the second half of this year,” Forman added.

Shares in Essentra were up 4.1% at 501.5p in mid-morning trading.

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