Updates

Zotefoams

September 2020

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

I had an interesting call with Zotefoams after they issued results for the six months to 30 June. Sales were down 18% to £34.6m mostly due to a 23% drop in the low margin volume business of polyolefin foams, which are used in industrial protection, automotive, aviation and marine as distributors destocked and ran down inventory to generate cash. There was a smaller 7% decline on high performance foams. Gross margin was stable at 34.8%. Pretax profit was down 45% to £2.7m and eps similarly to 4.5p.Although general market conditions are blurry, management tell me that H2 is going to set an “all time record for revenues” due to supplying into the recently won PPE contract, stronger footwear sales (Nike) and als ...

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