Essentra restarted its dividend as the components and packaging company posted an upbeat outlook after a steep decline in annual profit.
Adjusted operating profit for the year to the end of December fell 28% at constant currency to £62m as revenue dropped 7% to £897m. Reported pretax profit fell 91% to £6m.
Essentra proposed a final dividend of 3.3p a share and said trading was improving in both its divisions. The annual result showed an improving trend after operating profit dropped 40% in the first half.
The FTSE 250 group scrapped its final dividend for 2019 in the early stages of the Covid-19 pandemic and paid no interim dividend in 2020. With trading improving, Essentra said in August it was considering restarting the dividend in 2020.
Paul Forman, Essentra’s chief executive, said: “Through the company’s agility, adaptability and resilience, we have delivered a full-year operating profit result which is in line with the consensus of analysts’ forecasts. Given the group’s resilient performance, encouraging outlook and strong financial position, the board recommends a resumption of dividend payments.”
After a slow start to the current year because of logistical holdups Essentra’s components division will register improving like-for-like trends, the company said. The packaging market should return to moderate growth in the second half of 2021 as healthcare systems catch up on a backlog of prescriptions and operations, it added.
