Cellular material technologist Zotefoams (ZTF) nudges 1.1% lower to 297.7p after the £130 million cap posted an 8% increase in first-half revenue to £26.6 million. The group showed progress across all its divisions and had the group not experienced some significant translational headwinds, operating profit excluding exceptionals would have printed 20% higher for the six months to the end of June rather than the less impressive 6% increase that FX drag produced.

The group's MuCell Extrusion division was the star performer in terms of revenue improvement, adding 39% to show turnover of £1.01 million in the period.


Earnings per share slipped 5% to 5.5p in the period as a result of a dilutive £8.8 million share placing in September 2014. The money raised in this placing has been largely used in capex with Zotefoams looking to increase capacity across all its divisions. The group's largest project is extending its existing facility in Kentucky, USA and installing extrusion and high-pressure gassing processes to deliver approximately 20% additional global capacity for block foams.

Investec analyst Thomas Rands maintains that 'the company continues to make good progress and enters 2H15 with solid orders underpinning stronger than normal 2H profitability.' The broker maintains its 'Hold' recommendation and 325p target price on the basis that it remains convinced that the group's near-term prospects for MuCell are currently fairly reflected in the share price.

Issue Date: 04 Aug 2015