Commenting on today's announcement,
We have achieved a high degree of stability by focusing consistently and from the beginning on our three pillars of employee wellbeing, customer support and cash conservation. We have seen an increasing monthly sales trend this quarter, and barring a major second wave to the pandemic, we expect this trend to continue in the third quarter. We believe that our high level of customer support is enabling us to gain market share. We are actively focusing on our fourth pillar, 'building a better future', and are confident that we are emerging a stronger business.
I remain impressed and supremely grateful to every single member of the
Trading performance
Whilst Q1 trading was largely unaffected by the pandemic, as expected the impact was more profound in Q2. Nonetheless, the performance is in-line with our expectations and trading trends are improving.
As highlighted in the Company's last announcement dated
Group LFL revenue performance has improved as the quarter progressed - in May it was -10%, in June it is expected to be -1%. The Company therefore expects that LFL Q2 performance will be -10%, whilst LFL H1 performance is anticipated to be -9%.
In the Components division (which is more exposed to industrial cyclicality), the start of Q2 saw an accelerated slowdown in customer demand, with LFL revenue -24% on prior year in April. May and June showed an improvement from the April low, as our enhanced online offer enabled us to continue supporting customers through this period.
As previously indicated, the greater risk for the Packaging and Filters divisions related to supply chain performance and individual country temporary legislation. In line with this, April performance in both divisions was somewhat affected by temporary facility closures, which subsequently reopened in May. Underlying demand has remained robust for both divisions in May and June, and both divisions have now returned to modest positive growth - Packaging since May and Filters in June.
Balance sheet strength and liquidity
The Company continues to maintain a strong balance sheet and liquidity position. We are pleased to report that since the last announcement, the Company has been cash generative and hence our liquidity position has further improved. Overall liquidity at the end of June was cGBP260m - this has been achieved by diligent cash flow management in the Company.
In line with improving trading trends and our liquidity position, the Company is not in receipt of any
The Company continues to proactively work on protecting profit and conserving cash and is actively managing costs and capex. This decisive cost action combined with t he Company's strong liquidity position, leaves it well placed to weather these unprecedented trading conditions.
Outlook
The Company anticipates some continued disruption to its trading in the coming months and believes that it is still too early to outline the full impact on full year financial performance - hence any guidance remains absent.
In Components, recent order book trends are positive - with June seeing a c10% improvement compared to May, with progress being noted in all regions.
The order book for Packaging is encouraging, and remains higher than at the same point last year, on a LFL basis. The division has been awarded more than
Filters continues to make progress on its strategic agenda, in particular the commencement of our two 'gamechanger' outsourcing deals and the establishment of the China JV.
Despite the immediate challenges posed by the pandemic, the Company is well positioned to respond effectively, with the revenue trend seen in Q2 expected to continue into Q3, barring a major second wave to the pandemic.
The Company has a dedicated COVID-19 section within its corporate website, where regular updates are being posted.
Date for HY 2020 results announcement
The Company will report on its half year results, for the six months ended
The results will be published at 07:00 (
Contact:
Tel: +44 (0)1908 359100
About
Headquartered in the
Essentra Components
Essentra Components is a global market leading manufacturer and distributor of plastic injection moulded, vinyl dip moulded and metal items. Operating in 29 countries worldwide, 14 manufacturing facilities and 29 logistics centres serve more than 85,000 customers with a rapid supply of low cost but essential products for a variety of applications in industries such as equipment manufacturing, automotive, fabrication, electronics and construction. The division also includes the Reid Supply business, which provides a wide range of branded hardware supplies to a broad base of industrial customers, largely located in the US Mid-West.
Essentra Filters
Essentra Filters is the only global independent cigarette filter supplier. The seven worldwide locations, plus a dedicated Technology Centre supported by three regional development facilities, provide a flexible infrastructure strategically positioned to serve the tobacco sector. The business supplies a wide range of value-adding high quality innovative filters, packaging solutions to the roll your own segment and analytical laboratory services for ingredient measurement to the industry:
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