Zotefoams – strong Finals due next Tuesday, shares 392p, on 9.6x current year earnings, TP 606p
- Mark Watson-Mitchell
- 2 minutes ago
- 4 min read
Mark Watson-Mitchell - 11.03.2026
Next Tuesday morning, 17th March, Zotefoams (LON:ZTF) will announce its 2025 results and they should be impressive with a 35% improvement in profits.
The group is a global leader in the development, manufacture and distribution of supercritical foams.
Its materials are aimed at core applications across industry sectors such as Aviation and Aerospace, Mass Transportation, Medical, Sports & Leisure, Construction & Insulation, and Industrial Packaging.
The Business
The company was founded in 1921 by Charles Marshall as an expanded rubber manufacturer known as Onazote Limited.
It then expanded into polyethylene foams in the 1960s, in 1995 it went public.
The business is based in Croydon, Surrey, with additional manufacturing sites in Kentucky in the USA and Brzeg, Poland (foam manufacture), and foam products conversion in Oklahoma, USA and Jiangsu Province, China (T-FIT).
The group manufactures a range of closed-cell crosslinked foams from polyolefins and engineering polymers for global use in sports, construction, marine, automation, medical equipment and aerospace.
It is the world's largest manufacturer of lightweight crosslinked polyolefin block foams (AZOTE®) and additionally sells and licenses high-performance products (ZOTEK® and T-FIT®) and microcellular materials technology (MuCell®).
Today, it is a world leader in supercritical fluid foam technology, delivering optimal material solutions for the benefit of society.
Merger and Acquisition Strategy
The group has stated that its primary focus is on driving organic growth, but the potential opportunity exists to use targeted M&A as a new growth lever where it meets the Board's stringent criteria.
Value could be enhanced through either market consolidation, and portfolio expansion with complementary products, acquisition of technologies to deepen expertise, or through downstream extension, to shorten the value chain, gain machining and processing capabilities and get closer to customers, while respecting existing customers, many of whom are active in this area.
Recent Full-Year Trading Update
On Thursday, 22nd January, the group announced a strong full-year trading update to end-December 2025, with expected revenue of £158.5m, a 7.2% increase from £147.8m in 2024, and record adjusted profit before tax of £21.1m, up 37.9% from £15.3m in 2024, both exceeding market expectations.
The EMEA region saw 9.4% revenue growth to £123.9m, driven by footwear, while North America grew 6.7% to £30.1m, supported by Transport & Smart Technologies.
The company maintains a strong balance sheet with a leverage multiple of approximately 0.8x and has secured a new £90m revolving credit facility.
Management Comment
CEO Ronan Cox stated that:
"In what remain challenging market conditions, we are delighted to have closed the year strongly, with good sales growth and, for a third-year running, record profits ahead of market expectations.
The strategic progress we have made this year has been very pleasing.
We were delighted to complete the acquisition of OKC, our first significant transaction under our 'Expanding Beyond the Core' strategy, which is performing well and is expected to make a meaningful contribution to the Group.
Our commercial transformation into market-focused verticals continues to progress well, with our pipeline of opportunities growing across all three market verticals.
Our partnership with Seoheung in Vietnam, the appointment of Brandon Thomas to lead our Asian operations, the signing of our South Korea Footwear Innovation Centre lease, and the start of work on the Global Innovation Hub at Croydon all demonstrate our commitment to positioning Zotefoams for long-term sustainable growth in line with our stated medium-term targets.
Our strong balance sheet and focus on cash generation with our new revolving credit facility mean we are well positioned for future strategic investment including disciplined M&A where opportunities meet our stringent criteria and align with our strategy."
The Equity
There are some 48.85m shares in issue.
The larger holders include Schroder Investment Management (19.27%), Raymond James Investment Services (11.03%), Odd Asset Management (9.99%), BGF Group (6.56%), Premier Fund Managers (4.54%), IG Markets (4.02%), Highclere International Investors (3.95%), Nick Beaumont Dark (3.88%), Interactive Investor Services (3.85%) and Hargreaves Lansdown Asset Management (3.33%).
Broker’s View
Some five analysts closely follow the group, all of whom rate the shares as a Buy.
The consensus average Target Price is 606p, with the Lowest at 550p and the Highest at 660p.
Berenberg has recently upped its Target Price to 590p (540p).
Analysts Caroline de La Soujeole and Henry Carver, at Singer Capital Markets, rate the group’s shares as a conviction Buy, also with a 590p Target Price.
For 2025 year, to end-December, their estimates are for revenues of £158.2m (£147.8m), with adjusted pre-tax profits of £21.1m (£15.6m), generating earnings of 31.6p (25.3p) per share easily covering a dividend of 7.95p (7.53p).
For this year, they see £191.4m sales, £27.2m profits, 40.7p earnings and a dividend of 8.43p per share.
The 2027 year could see £200.9m of turnover, with £28.8m profits, 43.2p of earnings and paying out a dividend of 8.94p per share.
My View
It would appear that Ronan Cox and his Management Team are getting it right and that there is plenty more growth to follow.
Next Tuesday, 17th March, will clearly indicate that potential when the group declares its 2025 results.
The group’s shares, which touched 479.88p last October, now stand at 392p, a level from which they offer strong upside prospects.
(Profile 26.06.19 @ 600p set a Target Price of 750p)
(Profile 06.03.24 @ 330p set a Target Price of 395p*)
(Profile 05.08.25 @ 278p set a Target Price of 347p*)
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