Essentra PLC (LSE:ESNT) has reported strong growth in full-year revenue and a solid increase in underlying operating profit as increased prices offset volume declines.
For the year to December 31, 2022, the FTSE 250-listed firm saw revenue grow by 12.0%, to £337.9mln and adjusted operating profit improved by 12.0% to £63.7mln, before central costs.
Adjusted operating margin increased by 18.9% before central costs, driven by strong pricing delivery offsetting inflation, and management of the cost base.
But after adjusting for costs allocated to discontinued operations, Essentra reported an operating loss of £11.3mln (2021: £7.7mln profit) after recognising central costs previously allocated to the discontinued operations.
Essentra said a discontinued post-tax loss of £152.7mln included the impairment of goodwill and other intangibles for the packaging business of £182.7mln.
Expectations for 2023 remain unchanged. “The business has the ability to manage volume impacts through implementation of pricing actions, and careful cost management, validated by historical through-cycle margin resilience,” the company said in the results statement.
Essentra noted Distributors have continued to show signs of destocking impacting the US in particular, whilst there are improvements in China, and Europe continues to be robust. To date, new order intake is around 8% ahead of 2022 on a like-for-like basis.
The company confirmed a £150mln capital return consisting of a £90.0mln special dividend (29.8p per share) and a £60.0mln share buyback. A final dividend of 1.0p per share was also declared. The capital return plans were announced in February.