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Summary
- Essentra PLC had reported a like-for-like reduction of 6.3% in total revenue during FY20.
- The adjusted operating profit had declined by 27.9% during FY20.
- ESNT had managed to reduce its net debt from £284.4 million as of 31 December 2019 to £210.4 million as of 31 December 2020.
- ESNT will pay the FY20 final dividend of 3.3 pence per share on 01 June 2021.
Essentra PLC (LON:ESNT) is the LSE listed industrial stock. ESNT’s shares have generated a return of approximately negative 12.21% in the last 12 months. The Company was incorporated in 2005.
Business Model
Essentra PLC is a UK-based Company, the leading manufacturer of fiber, foam, plastic, and packaging products. Moreover, the Company operates through three business segments -
- Component Solutions
- Health & Personal Care Packaging
- Filter Products
Recent News
On 05 March 2021, ESNT updated that Tommy Breen is going to retire as Non-Executive Director with effect from 20 May 2021.
FY20 Financial results (for the period ended on 31 December 2020, as of 05 March 2021)
(Source: Company result)
- ESNT had delivered a like-for-like reduction of 6.3% in total revenue during FY20. However, the Company had shown a marginal improvement in the last three quarters as revenue witnessed a drop of -9.8%, -6.7% and -1.0% during Q2 FY20, Q3 FY20 and Q4 FY20, respectively.
- On the profitability front, the adjusted operating profit had witnessed a decline of 27.9% to 62.0 million during FY20. The 2019 business disposals had contributed £5.0 million of decline during FY20.
- Moreover, the reported operating profit went down from £80.0 million during FY19 to £21.7 million during FY20. ESNT had reported basic earnings per share of 1.7 pence during 2020.
- Furthermore, ESNT had managed to reduce its net debt from £284.4 million as of 31 December 2019 to £210.4 million as of 31 December 2020.
- Meanwhile, the Board had resumed dividend payments and declared FY20 final dividend of 3.3 pence per share based on resilient business performance and encouraging outlook.
- The Company will pay a final dividend of 3.3 pence per share on 01 June 2021 with an ex-dividend date of 22 April 2021.
FY20 Divisional Highlights
(Source: Company result)
- On an LFL basis, all three business segments had demonstrated a decline in the revenue during FY20. The Components segment had reported a drop of around 10.1%, the packaging segment witnessed a decline of 4.0%, and the filters division demonstrated a reduction of 5.6% in the revenue during FY20 as compared to FY19.
Share Price Performance Analysis of Essentra PLC
(Source: EODHD/Others, chart created by Kalkine group)
Shares of Essentra PLC were trading at GBX 301.00 and were down by close to 0.13% against the previous closing price as on 05 March 2021 (before the market close at 10:42 AM GMT). ESNT's 52-week Low and High were GBX 206.80 and GBX 343.40, respectively. Essentra PLC had a market capitalization of around £909.27 million.
Business Outlook
ESNT had achieved significant business performance across all three business segments - Components, Packaging and Filters, with substantial improvements over the last three quarters. However, the Covid-19 pandemic had created widespread disruptions during 2020 and continue causing several operational headwinds in 2021 as well. Additionally, the strengthening of the pound sterling against USD and EURO had also caused a headwind. Moreover, the Components division would continue to accelerate its progress and register improvement in LFL trends as 2021 industrial production may reach 2019 volume levels. The packaging division is anticipated to swing to profit from the second half of 2021 as global healthcare systems would focus on clearance of the backlog of elective surgeries and prescription.
The Filters segment would witness year-on-year growth during FY21 driven by outsourcing contract volumes. However, ESNT would incur a Covid-19 related cost of £17 million attributable towards the closure of sites across the Components and Packaging division. Overall, all three business segments are well-positioned to drive sustainable growth towards the direction of meeting strategic objectives.
