Essentra reports first-half declines in line with expectations
By Josh White
Date: Tuesday 29 Jul 2025
(Sharecast News) - Essentra reported a performance in line with expectations for the first half on Tuesday, amid ongoing global challenges and mixed macroeconomic conditions.
Revenue for the period was £152.4m, a 1.1% decrease on a constant currency basis and a 4.6% decline on a reported basis.
Adjusted operating profit fell 19.8% to £16.5m, with the adjusted operating margin decreasing by 250 basis points to 10.8%.
Adjusted pre-tax profit also declined by 25% to £12.5m, while adjusted basic earnings per share dropped 21.8% to 3.4p.
The London-listed company reported strong cash generation, with an adjusted net cash inflow from operating activities of £17.4m, up 3.9% in constant currency.
Free cash flow was £11.9m, down 4.8% in reported terms.
Essentra's net debt stood at £68.7m, resulting in a leverage ratio of 1.5x adjusted EBITDA, compared to 1.1x in the first half of 2024.
The firm said its performance showed resilience across regions, with the Americas returning to growth, reporting a 0.7% year-on-year increase in like-for-like revenue.
It said the Asia-Pacific region performed particularly well, posting 9.5% like-for-like revenue growth, driven by strong demand from the China export market and new customer projects.
In contrast, revenue in EMEA fell by 4.5% year-on-year, although the pace of decline slowed in the second quarter, in line with broader market trends.
Looking ahead, Essentra reiterated its full-year guidance for 2025, with expectations for adjusted operating profit remaining unchanged.
The company said it anticipated margin improvement in the second half, driven by operational and commercial initiatives undertaken in the first half, including a review of its footprint and enhanced pricing strategies.
Those actions, along with stable volumes in the second quarter, were expected to support modest revenue growth and margin accretion.
The company's acquisition pipeline remained strong, and management was actively exploring bolt-on acquisition opportunities in line with its strategic goals.
"The group delivered a first half financial performance in line with board expectations, navigating external global challenges and mixed macroeconomic conditions," said chief executive officer Scott Fawcett.
"We are particularly encouraged by the performance in the Americas and Asia-Pacific, both returning to year-on-year revenue growth."
Fawcett said the company's strong cash conversion and balance sheet flexibility provided a solid foundation for both organic growth and strategic acquisitions.
"With actions already in place to improve margins and volumes holding steady, we remain confident in achieving our full-year expectations."
Essentra said it was focussed on driving operational excellence and delivering its medium-term targets, positioning the business for growth as market conditions stabilised.
At 0917 BST, shares in Essentra were up 7.49% at 112p.
Reporting by Josh White for Sharecast.com.
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