Essentra (ESNT) has announced what it emphasises is “a significant step” to a future as a global leading manufacturer and distributor of components with a clear strategy and significant opportunities to accelerate growth and expand market share. This is with an agreed sale of its Packaging business.
As noted HERE, I am a fan of Essentra (ESNT), the “hassle-free supplier of essential industrial components”. Is today's announcement - the company has “disposed of ESNT Packaging & Securing Solutions Limited, Essentra Packaging US Inc, and their respective subsidiary companies to Mayr-Melnhof Group, a leading producer of carton based in Austria, for a cash consideration of £312 million, on a cash-free, debt-free basis and subject to customary adjustments” - good or bad news, then?
I have been a big fan of shares in Essentra (ESNT) - whicvh hopes to be “the world’s leading responsible hassle-free supplier of essential industrial components” - for about nine months now. And whilst my average purchase price of below 275p is very pleasant compared to today’s c. 315p share price, the share has been pretty volatile year-to-date after I discussed its continued good progress back in January . So am I still hoping for a 400p+ share price target or not?
Components and (currently) Packaging and Filters company Essentra (ESNT) has announced fourth quarter like-for-like revenue up 12.7% on the prior year (+11.1% v. Q4 2019) and that it “expects to deliver FY 2021 operating profit in the range of analysts' forecasts” (£80.7m-£84.3m) and “order book trends remain strong”. The shares are now 340p, a just shy of £1 billion market cap, but is there still further to go here?
I see that Aston Martin Lagonda (AML) observed this morning that its "year-end cash balance of c.£420 million, higher than previously anticipated…”. That is no disaster for the car company but given its lack of conventional profitability, there will still be a lot to appraise at their formal numbers on the 24th February. The shares might be up 3% today but they are still down by more than 25% during the last year. Even though Formula 1 fans might regard the company as offering a lot of sales growth potential, personally I am not excited, even if it claims their DBX brand achieved ‘about 20% share of the luxury SUV market’. A company owned by the rich, for the rich is never the easiest holding, especially as it has gone bust a number of times before historically. It remains a clear avoid for me.
Previously writing on Essentra (ESNT) we noted ‘Q3 update, adds corporate excitement potential’ with the company “reviewing the full range of strategic options for the Filters business” with it aiming to become a pure play Components business over time, targeting strategic focus and an acceleration of organic and inorganic growth. Now a further “Strategic Update” and a “Directorate Change”.
