Updates

Essentra - £5m reduction in costs

October 2023

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

I caught up with CEO Scott Fawcett again on the day of Essentra’s interims. The highlight was a £5m reduction in central costs (£2m more than previously planned) which meant it met expectations for EBIT profit of £23m, up 52% year-on-year (eps: 5.9p). The double-digit volume decreases, offset by 7-8% price rises, leave sales down 5.5% overall. Those savings powered a 5.2% increase in EBIT margin to 13.8%. Fawcett’s plan is to hit 18% medium-term. Macro factors led to tough conditions. EMEA was broadly flat, but the outlook has downside risk due to weakness in Germany. The Americas fell 12.6% and even though de-stocking continues, it could recover quicker than expected with US inflation coming under control. Asia fell 18.3% but wit ...

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