Essentra FY profit to miss market expectations

(Sharecast News) - Essentra warned on Tuesday that full-year adjusted operating profit would be below market expectations, pinning the blame partly on softer market conditions in Europe in August and into September. In an update for the year to the end of December, the company also said the Americas region has reported a slower-than-expected rate of recovery, while Asia Pacific remains broadly in line with expectations.

"The impact of the market back drop on trading since the half year 2024 results, combined with a consequently more cautious view of the likely timing of further modest improvements in market conditions has led to the board revising its expectations for full year 2024," Essentra said.

Including the impact of adverse foreign exchange retranslation, estimated to be around £2m, it now expects 2024 full-year adjusted operating profit of between £40m and 42m, which is below market expectations of £48.4m to £49.7m.

"Management remain confident in the business model and that the company is well positioned, supported by a right-sized cost base and robust operations, to benefit from high levels of operational leverage when normalised growth returns," it said.

"The group continues to balance its investment in value creating opportunities across the business alongside cost mitigation activities and driving efficiencies, which has supported strong gross and operating margins. The balance sheet remains robust, and full year leverage guidance remains unchanged."