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Essentra - Huge dividend growth expected from FY’24

July 2023

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.

  • Epic Code:
  • ESNT
  • Price:
  • 185p
Essentra’s first AGM update since becoming a pure play components manufacturer & distributor showed some resilience. Whilst like-for-like sales fell 9% in the first four months with destocking by distributors, trading was resilient and since the beginning of Q2 the group saw improving trends, with activity in China also off the sick list. Peel Hunt reiterates management’s target to double top line (40% organic, 60% m&a) and triple bottom line profit. Its forecasts are for £40.6m pretax profit and 10p eps, rising to £49.5m and 12.3p in FY’24, dropping next year’s PE to 15.0. Its price target (unchanged) is 315p. I am a strong holder.   ...

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With small companies there is an above average degree of risk compared to buying blue chips. Please be aware that we have not assessed the suitability of any of these investments for you. The newsletter simply states a personal view and diarises the editor’s investment decisions. Please speak to your stockbroker or other qualified individual to ascertain whether any of these companies mentioned would form useful additions to your own portfolios. Past performance is no indication of future success.

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