Essentra seeks deals to help boost Asia Pacific sales
By Esha Vaish
(Reuters) - Essentra Plc , a supplier of speciality plastic and packaging components, plans to spend up to 200 million pounds ($286 million) on deals, looking to more than double its Asia Pacific sales, its finance director said.
Shares of the company, which also posted a rise in full-year revenue, were up 10.4 percent at 823 pence at 1007 GMT, making it the top FTSE 250 gainer <.FTMC>.
Essentra has actively been pursuing acquisitions to boost its footprint in its distribution and health & personal care packaging units.
Last year, the company sealed its biggest deal ever, agreeing to buy the specialist packaging division of Clondalkin Group for $455 million.
Essentra wants to increase its sales from Asia to about a third, Finance Director Stefan Schellinger said, adding that the size of the market opportunity far exceeded the company's current footprint in the region.
The company gets roughly half of its sales from Europe, about a third from the Americas and the rest from Asia.
Its push into Asia comes even as analysts are cautioning about engineering exposure to weak emerging markets, especially due to lower demand from China.
Essentra's wide product mix, which ranges from cigarette filters to adhesives, has helped it better weather a downturn in demand from commodity customers.
CEO Colin Day said the company would see a smaller hit from the slump in oil and gas in 2016, as demand from commodity customers for its pipe protection technology products has already hit bottom.
On the back of this, Day forecast at least mid-single-digit like-for-like revenue growth and double-digit adjusted EPS growth at constant exchange for 2016. The company said its start to this year had been better than the last.
Full-year revenue rose 27 percent to 1.10 billion pounds in the year ended Dec. 31, helped by strong performance in its non-oil and gas-exposed units.
Excluding performance of the pipe protection technologies unit, which has an exposure to the oil and gas industry, revenue was up 5 percent on a like-for-like basis.
($1 = 0.6992 pounds)
(Reporting by Esha Vaish in Bengaluru; Editing by Sunil Nair)
