Updates

Zotefoams

April 2023

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

Back in 2021, Zotefoams’ profits had been hit by a combination of high energy, freight and commodity prices, crimping its gross margins from 33.6% to 26.4%. But chief executive David Stirling points out how price increases during FY22 saw gross margin bounce back to 30.4%. Sales improved by 26% to £127m and pretax profit ballooned by 74% to £12.2m. Eps were up 130% to 20.6p. Operating margins went from 8.1% to 10.9%. Divisionally, polyolefin foams’ average selling price was lifted 24% and overall volumes were at similar levels to 2021 resulting in sales up 25% to £70.1m and as a consequence saw segmental operating profit rise 7x to £4.9m, as did margins to 7%. The HPP side, which is highly differentiated stuff, saw incre ...

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With small companies there is an above average degree of risk compared to buying blue chips. Please be aware that we have not assessed the suitability of any of these investments for you. The newsletter simply states a personal view and diarises the editor’s investment decisions. Please speak to your stockbroker or other qualified individual to ascertain whether any of these companies mentioned would form useful additions to your own portfolios. Past performance is no indication of future success.

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