Zotefoams PLC (LSE:ZTF) shares dropped 13% to 390p on Tuesday after the company cautioned that trading conditions remain “mixed,” prompting investors to lock in gains following a 58% rise over the past six months.
The foam manufacturer, whose materials are used in footwear, aerospace and insulation, said third-quarter revenue came in at £38.2 million, slightly below last year’s record level but in line with expectations.
Year-to-date sales are up 5% to £115.7 million, with strong demand in Europe and transport markets offset by softer activity in North America.
Chief executive Ronan Cox said the company had “continued to trade in line with expectations” while acknowledging varying market conditions.
Zotefoams reaffirmed guidance for mid-single-digit growth this year and said it remains confident in its full-year outlook, underpinned by a healthy order book and low leverage of 0.5 times earnings.
The group is also progressing with several strategic initiatives, including a $10 million partnership with South Korean footwear specialist Seoheung to develop a manufacturing facility in Vietnam, a new innovation hub in South Korea, and plans for a global R&D centre at its Croydon base.