Zotefoams plc (LON:ZTF), a world leader in cellular materials technology, today provided the following trading update in respect of its financial year ending 31 December 2021 (“FY 2021”).
Further to the trading update of 3 November 2021, we have seen continued commercial progress, with FY 2021 revenues shipped to date of approximately £95m. The Group has a residual orderbook for FY 2021, supporting potential sales of approximately £101m for the year (2020: £83m), slightly ahead of current market consensus expectations.
However, in recent weeks the Group has encountered some specific supply chain issues which have temporarily delayed the in-bound supply of product, primarily at our UK facility. These issues have been substantially resolved but the delays experienced will have an impact on the timing of shipments either side of the year end. We currently expect that £1m of 2021 orders will now be shipped in 2022 but there is a risk that up to a further £3m of orders might similarly be delayed until 2022, given a volatile logistics backdrop. The drop-through margin on these products is within a range of 50%-75%.
Overall, the Group continues to manage a challenging supply chain backdrop effectively, in support of continued demand recovery. We have experienced some short notice cost surcharges from energy-intensive suppliers, which have increased our costs in the final quarter. Absent the shipping delays described above, these costs were expected to have been offset in FY 2021 by the stronger than expected sales performance, with pricing adjustments to be made in 2022.
Commenting on the update David Stirling, Group CEO of Zotefoams, said:
“It is encouraging to see good organic revenue growth and we have actively engaged with customers to secure price increases in 2021 and have also agreed further price increases effective early in 2022. This does, however, remain a challenging environment for many businesses, dealing with inflationary pressures, supply chain challenges and uncertainty.
“It is disappointing that, given how close we are to the year end, this supply chain issue will impact 2021 shipments. However, these orders will be delivered early in the new year and the strong commercial momentum we have seen through FY 2021 positions the Group very well for further progress in 2022 and beyond.”
