High-performance materials group Zotefoams (LON:ZTF) posted a positive four-month trading update ahead of its AGM. The firm saw strong trading across all divisions and reiterated its full-year earnings guidance.
On track for full year
For the period to the end of April, Zotefoams saw a 26% increase in revenue to £64 million. Demand was robust in key markets, while the contribution from OKC (Overseas Konstellation) offset the anticipated slowdown in footwear.
In EMEA (Europe, Middle East and Africa), sales grew 24% to £50 million with OKC contributing almost £10 million. Underlying sales were stable against a strong prior-year period which included exceptionally high Footwear volumes. Meanwhile, demand from the aviation, space and automotive industries continued to grow, maintaining the previous year’s momentum.
In North America, revenue grew 30% to £12 million on a like-for-like basis helped by an increase in production capacity. Demand in Consumer & Lifestyle and Transport & Smart Technologies was robust.
Finally, revenue in Asia more or less doubled to just under £2 million. The group has invested in production capacity in Vietnam and South Korea with operations set to begin this year.
Thanks to this solid start, CEO Ronan Cox is confident in delivering on FY26 expectations. Demand in key markets is expected to remain strong, while the firm has mitigated the impact of higher raw materials and other inputs.
Zotefoams has been on our radar for a while now, along with specialty materials firms Croda (LON:CRDA) and Victrex (LON:VCT). In our view, Zotefoams offers the best combination of growth, earnings visibility and valuation.
The business has had to weather tariffs on its Asian exports and now higher energy and material prices. Despite these headwinds, and thanks to judicious investments in organic growth and acquisitions, it is pushing ahead.
Its major projects in Asia are on track, with the new facility in Vietnam and the Footwear Innovation Centre in South Korea on schedule. The group is also using AI to drive productivity gains and innovation, which should help improve sales and margins.
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