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Essentra sees slow recovery but expects continued disruption

The third quarter is estimated to see a 10% drop in revenue

Essentra PLC - Essentra sees slow recovery but expects continued disruption
Customer demand in the packaging division has remained robust

Essentra PLC (LON:ESNT) has said it anticipates some continued disruption to its trading in the coming months despite seeing some recovery as the coronavirus pandemic lockdown eases.

In a trading update, the FTSE 250-listed plastic-products manufacturer said it expects like-for-like revenue to be down 9% in the six months to June 30, 2020, with the second quarter dropping by 10%.

The current quarter is estimated to see a similar revenue trend, unless there is a “major” second wave of coronavirus infections, it added.

Essentra said customer demand has remained robust for its packaging and cigarette filters divisions, while for plastic components it has been lower due to disruption in its markets.

Performance in all three segments was affected by restrictions in the supply chain in April, but have started to improve as of May, it added.

The group said available cash at the end of June was £260mln.

"We see material upside in the shares as performance improves and Essentra looks to accelerate progress coming out of the lockdown period," analysts at house broker Peel Hunt commented.

Shares rose 3% to 301.8p on Friday at the opening bell.

--Adds analyst comment, shares--

Quick facts: Essentra PLC

Price: 314 GBX

LSE:ESNT
Market: LSE
Market Cap: £826.51 m
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