Zotefoams (ZTF) H1 2024 earnings summary

Executive summary

• Achieved record H1 revenue of £71.1m, up 10% year-over-year, and record profit before tax of £8.3m, up 12% year-over-year.

• HPP revenue grew 37% to £36.1m, surpassing Polyolefin Foams for the first time.

• Strategic progress in ReZorce Circular Packaging, with Refresco as joint development partner and market trials planned.

• Strong footwear sales, particularly through the Nike partnership, and growth in construction and aviation markets.

• Shincell global alliance enhances technical capabilities and growth potential.

Financial highlights

• Group revenue increased 10% to £71.1m compared to H1 2023.

• Gross margin improved by 40bps to 33.2%; operating profit rose 14% to £9.7m.

• EBITDA up 8% to £14.6m; EPS up 12% to 12.89p; interim dividend up 4.4% to 2.38p.

• Net debt (ex-IFRS 16) increased to £35.1m, reflecting growth investments; IFRS net debt at £44.6m.

• Capital expenditure rose to £8.1m, mainly for ReZorce and US expansion.

Outlook and guidance

• Full-year performance expected to be in line with market expectations, with positive momentum into H2.

• ReZorce development accelerating, with focus on securing investing partners.

• Footwear demand expected to normalise, freeing capacity for North America and Europe.

• Focus remains on cost efficiency, with stable energy and polymer input prices.