FTSE 250 company now believes operating profit to be as much as 17% lower than expected
Companies: Essentra plc
Industrial plastics specialist Essentra plc cut its full-year revenue and profit estimates for the second time this year, citing slower than expected contract wins across two divisions, and integration problems at several of its facilities in the US and the UK.
The FTSE-250 company has three key divisions: Component Solutions, Health and Personal Care Packaging, and Filtration Products.
Its components division is reportedly trading in-line with expectations, with growth in continental Europe and Asia remaining strong, and business in the UK and the US showing signs of recovery from declines in H116.
The health packaging division suffered stuttering growth as the integration of three facilities in the US and the UK experienced "issues" and as a result didn't deliver the required rate of month-on-month uplift in revenue and profit that was desired and anticipated.
Lastly, the anticipated ramp-up in contract wins in the filtration division hasn't materialised, and the Chinese market has softened, both resulting in lower-than-expected business in the division, and lower revenue and profit.
The firm's full-year outlook has been adjusted downwards for the second time this year, with management now anticipating full-year adj operating profit of c.£140m, and revenue -7% on H116. They say profit warnings come in threes, so investors will be looking carefully at the group's final full-year results.
The company's share price fell 20% in early trading as markets priced in the adjustment.
