Zotefoams (ZTF) H2 2024 earnings summary

Executive summary

• Achieved record revenue of £147.8 million in 2024, up 16%, and record operating profit of £18.1 million, up 20% before exceptional items, driven by high-performance products and strong footwear sales through a key Nike partnership.

• Net debt reduced by 20% to £24.1 million, with leverage down to 0.9x, reflecting strong cash generation and balance sheet strength.

• Strategic shift from product to industry focus, targeting growth in consumer, transport, and construction verticals, with a five-year organic revenue target of £220 million and ambitions beyond £300 million.

• Exceptional charge of £15.2 million due to pausing investment in MEL/Resource/ReZorce® technology, resulting in reported PBT of £0.2 million and a loss per share of 5.66p.

Financial highlights

• Group revenue reached £147.8 million, up 16% year-over-year, with a £4 million currency headwind; constant currency revenue was £151.8 million.

• Operating profit before exceptionals rose 20% to £18.1 million; PBT before exceptionals up 19% to £15.3 million.

• Basic EPS before exceptionals increased 37% to 25.95p; after exceptionals, loss per share was 5.66p.

• Gross margin was 31.2%, down 110 bps; adjusted for inventory provisions and Shincell amortization, margin was 32.3%.

• Cash generated from operations was £30.4 million, with a cash conversion rate over 90%; final dividend up 4% to 5.1p.

Outlook and guidance

• Five-year strategy targets organic revenue growth to £220 million, with ambitions to exceed £300 million through M&A and joint ventures.

• Operating profit margin target of 18–20% and return on capital employed goal of 20% by 2029.

• First revenues from the new Vietnam facility expected in 2027, with initial capacity for 10 million midsoles.

• Robust order book in consumer, transport, and smart technologies for 2025; construction and industrial segments expected to recover later in the year.

• US capacity expansion on track for early H2 2025 commissioning; diversified manufacturing footprint supports resilience amid trade uncertainties.