Zotefoams plc (LON:ZTF), a world leader in supercritical foams, has provided a trading update for the three months ended 30 September 2025 and in respect of its financial year ending 31 December 2025.
The Group has sustained its positive trading momentum during the period, delivering a performance in line with the Board’s expectations.
Following a record first half, the Group achieved Q3 reported revenue of £38.2m (Q3 2024: £39.7m), which was in line with a very strong prior year comparator on a constant currency basis:
| · | EMEA revenue in Q3 reduced 1% with the anticipated moderation and seasonality in Consumer & Lifestyle largely offset by ongoing strong demand in Transport & Smart Technologies, as well as growth in the Construction & Other Industrial insulation business. |
| · | North America revenue in Q3 was down 16%, following a strong H1, largely due to phasing of orders in Transport & Smart Technologies, and more subdued demand in Construction & Other Industrial. |
| · | The Asia region, though currently representing a small portion of revenue at £1.1m, saw good growth in the period and remains strategically important as the Group continues preparations for operations in Vietnam, a key market for the Consumer & Lifestyle vertical. |
On a year-to-date basis, Group reported revenue is up 5% to £115.7m (YTD 2024: £110.7m), and up 7% on a constant currency basis:
| · | Year-to-date EMEA revenue was up 7%. Within this Consumer & Lifestyle was up 7%, driven by strong demand from Nike in the first half of the year to support strategic stocking in advance of planned product launches. Construction & Other Industrial was up 15%, with ongoing demand in the UK market and stronger demand for insulation in Q3. Transport & Smart Technologies was up 4%, reflecting sustained momentum in our target sectors. |
| · | Year-to-date North America revenue was in line with the prior year, with good growth in Transport & Smart Technologies, up 16%, reflecting success in aerospace and specialty packaging. This was offset by lower demand in Construction & Other Industrial, down 12%, reflecting demand headwinds as well as repositioning of our channel partners. |
| · | In Asia, our smallest region by sales, year-to-date performance has been driven by our T-FIT® insulation business, which is up 5%, offset by the non-repeat of several larger one-off sales in Transport & Smart Technologies in the prior year |
Year-to-date Gross margin reflects the sales profile and is in line with the prior year, with the benefit of the revenue growth and the closure of MELs operating activities.
The balance sheet remains strong with good cashflow from operations reflecting our ongoing focus on working capital and leverage of 0.5x (Q3 2024 0.9x).
Strategy progress:
The Group has continued to make excellent progress on its strategic initiatives during Q3:
| · | Brandon Thomas was appointed as Managing Director, Asia – bringing extensive technical and commercial experience from his role as General Manager, Asia at Nike, where he established their Air Manufacturing Innovation facility in Vietnam. |
| · | In August, the Group announced its partnership with Seoheung Co. Ltd. a footwear supply chain specialist, through a joint venture for the Vietnam manufacturing facility. Seoheung is investing $10m for a 17.5% stake, significantly de-risking this investment from both financial and technical perspectives. |
| · | The Group signed a lease in South Korea for the new footwear innovation hub, which will further strengthen Zotefoams’ capabilities and customer relationships in the athletic footwear market. |
| · | The Group committed to the establishment of a global innovation centre at its Croydon facility, which will form a platform into which R&D capabilities can be consolidated to accelerate product development across all three market verticals. |
| · | The development of the Group’s new manufacturing facility in Vietnam continues as planned, with commissioning expected in Q4 2026. This facility will position the Group significantly closer to a key global footwear manufacturing hub. |
| · | In North America, the second low-pressure vessel was successfully commissioned, providing enhanced capacity to support future growth in the region. |
| · | In December 2024, Zotefoams paused investment in its ReZorce® circular packaging technology. As a result, Zotefoams has not committed further financial investment or resource to the development of ReZorce and has no plans to do so. The Group has remained open to enabling interested parties to complete the development and achieve commercialisation of the technology. A consortium of investors, including the former Zotefoams business lead for ReZorce, has formed a company called ReZorce Limited, with no ties to Zotefoams plc, to explore this opportunity. Zotefoams has assigned certain intellectual property rights to ReZorce Limited, while retaining control over the IP until commercialisation, and supported them in the decommissioning of the asset in Denmark and transporting it to their preferred destination. The Group does not expect to receive any consideration for this, nor provide any ongoing financial assistance to the consortium, but has retained the right to receive a cost-free minority stake in the business should it succeed. |
Outlook
The Board is confident in the Group’s ability to sustain positive momentum, with good visibility of confirmed orders across most business units for the remainder of the final quarter, underpinning a continued expectation of delivering mid-single-digit growth for the year as a whole.
Based on current sales forecasts and foreign exchange rates, and subject to there being no material disruption to key markets, the Board expects revenue and adjusted profit before tax for 2025 to be in line with current market expectations*.
Commenting on the update Ronan Cox, Group CEO of Zotefoams, said:
“In what remain mixed market conditions, I am pleased that the business has continued to trade in line with our expectations, whilst also making good progress with our refreshed strategy.
Our commercial transformation into market-focused verticals continues to progress well, with our pipeline of opportunities growing across all three sectors.
The strategic progress we have made this year has been exceptional. Our partnership with Seoheung in Vietnam, the appointment of Brandon Thomas to lead our Asian operations, the signing of our South Korea footwear innovation hub lease, and the plan for the establishment our Croydon innovation centre all demonstrate our commitment to positioning Zotefoams for long-term sustainable growth. These investments in capability, capacity, and customer proximity are already strengthening our relationships with key partners and expanding our market opportunities.
Looking ahead, our order book provides good visibility for the remainder of 2025 and as a result, the Board remains confident in its ability to meet market expectations for the full year.”
* Current Zotefoams-compiled consensus expectations for revenue is £154.4m and adjusted profit before income tax and separately disclosed items, for the year ending 31 December 2025, is £20.5m.
