Essentra H1 revenues rise but margins slide

31st Jul 2014 11:53

Increased investment across new and existing markets and product innovation helped to drive first half revenue 12% higher at packaging and components group Essentra. The group saw gross margin decline 190 basis points, or 230 at constant currencies, to 34% due to acquisitions, the mix effect of the growth in lower margin Filter Products and inventory destocking in the higher margin Porous Technologies division all having an effect.Revenue rose from £384.6m to £431.1m, helping to drive profits 6% higher from £60.3m to £64.2m. The strongest performance was given by packaging & securing solutions, which saw revenue jump 42%, while component & protection solutions rose 7%, filter products climbed 9% and Porous Technologies dropped by 15%.On a reported basis, net income was £35.8m, an increase of 13.3%, with earnings per share up 9.4% versus the same period in 2013 at 15.2p.Chief executive Colin Day said: "Revenue and profit momentum improved in the second quarter, underpinned by more sizeable business wins and the successful commercialisation of new product initiatives, and supported by further cost reduction and efficiency programmes. "In addition, the integration of recent acquisitions, the delivery of synergy savings and the transition to the new organisational structure are proceeding well and are ahead of expectations."Given these interim results, Essentra intends to deliver further balanced, profitable growth in 2014, and thus achieve its Vision 2015 objectives of at least mid single-digit like-for-like revenue growth and double-digit adjusted EPS growth at constant exchange."The half-year dividend was increased by 19% to 5.7p.NR