Essentra vows to go carbon neutral by 2040, expects slow short-term recovery

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Essentra PLC (LON:ESNT) announced it plans to go carbon neutral by 2040 while the current outlook remains uncertain amid the pandemic.

The cigarette filters group plans to chop 25% emissions in the next five years while all sites are expected to be at zero waste to landfill by 2030 at the latest.

READ: Essentra fined by US over North Korea transgressions

Looking at the short-term prospects, the FTSE 250 company said full-year revenue and adjusted operating profit are going to be around the current consensus.

The interim dividend is cancelled but the manufacturer will consider whether it can resume payouts this year.

In the six months to June, revenue slid 11% to £448mln, while pre-tax profit slumped 85% to £8mln mostly due to the disposal of various businesses in the first half of 2019 and temporary inefficiencies caused by the pandemic. Net debt rose 23% to £297mln.

“Trading has continued to improve and Essentra is well-positioned to gain market share, improve margins and build through mergers and acquisitions,” said analysts at house broker Peel Hunt.

“We see material upside in the shares as performance improves and Essentra looks to accelerate strategic progress.”

Shares advanced 2% to 317.8p early on Friday.

–Adds broker comment, shares–

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