Essentra returns to revenue growth, but profits hit by hurricanes

In the third quarter Essentra returned to like-for-like revenue growth for the first time in almost two years, though full year margins for the plastics and packaging group will be dented by the impact of Hurricane Maria on its Puerto Rico sites.

The Health & Personal Care Packaging arm is expected to see the decline in like-for-like revenue growth ease "modestly" in the second half but adjusted operating margin is now anticipated to be slightly lower than the first half of 2017, with any recovery of via insurance potentially to be in 2018.

Having previously revealed that its two health and personal care packaging sites in Puerto Rico had been put out of action for since 19 September, Essentra partially restarted operations on 2 October, though infrastructure and supply chain issues continue to constrain output, while demand has waned as customers also cope with their own post-hurricane challenges.

There is expected to be a £1.2-1.5m profit impact from Hurricane Maria plus £0.5-1m due to disruption from Hurricanes Harvey and Irma to sites in Houston, Largo and Puerto Rico.

The other parts of the group have continued to improve, with Component Solutions expected to generate a second half as strong as the first, with the Filter Products unit delivering an "improved trend" in both LFL revenue growth and adjusted operating margin.

For the third quarter to 30 September, group LFL revenues growth was "modest" but in positive territory for the first time since the final months of 2015.

Component Solutions increased LFL sales thanks to a continued strong result in both Components Europe and Asia as well as a return to growth of the Americas business, together with ongoing momentum in Pipe Protection Technologies.

Filter Products growth was boosted by continued success for innovative filters, including the Superslim variants launched in China last year.

The ongoing sales decline at Health & Personal Care Packaging eased off, notwithstanding the impact of Hurricane Maria on the two sites in Puerto Rico.