LONDON (ShareCast) - (Sharecast News) - Zotefoams shares fell sharply on Tuesday after confirming that it had ceased investment in its ReZorce circular packaging technology and transferred the IP to a newly formed external company with no financial consideration.
While Zotefoams retains the right to a cost-free minority stake should the venture succeed, the move marks a full strategic exit from what had previously been considered to be a high-profile innovation area.

Zotefoams said the decision followed a review of capital priorities and that future focus would centre on its core business and strategic initiatives, including its Vietnam joint venture and Croydon innovation centre.

The AIM-listed firm stated trading for the three months ended 30 September was broadly in line with expectations, with group revenue down slightly to £38.2m from £39.7m a year earlier.

EMEA revenue slipped 1% as seasonal moderation in consumer and lifestyle was offset by strength in insulation and transport, while North America fell 16%, reflecting order phasing and softer industrial demand, and Asia delivered growth ahead of planned expansion.

Year-to-date revenue rose 5% to £115.7m, or 7% on a constant currency basis, with gross margin in line with the prior year, and leverage was reduced to 0.5x from 0.9x, supported by solid cashflow from operations.

Zotefoams reiterated its full-year guidance, with revenue expected at £154.4m and adjusted pre-tax profits at £20.5m, while the board said it remained confident in its ability to deliver mid-single-digit growth for the year.

As of 0930 GMT, Zotefoams shares had sunk 12.09% to 395.59p.





Reporting by Iain Gilbert at Sharecast.com

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