Zotefoams halts investment in new tech, shares fall
announced it was halting investment in a new product on Wednesday, after the packaging specialist failed to secure a partner for the project.
The announcement weighed on the stock and by 1030 GMT it had fallen 6% to 304.77p.
The Croydon-based firm had been seeking to commercialise a new, fully recyclable mono-material barrier packaging solution called ReZorce.
It said the technology had "clear circularity and sustainability benefits" with "significant" interest from global food and drinks companies.
It wanted a strategic partner, however, to help realise its commercial potential, "given the capital investment, market access and expertise required to achieve high volume production".
But on Wednesday it confirmed that while the search process had been extensive, including talks with various parties, it had been unable to identify a partner to take ReZorce forward.
It will therefore shutter its investment and refocus on its core supercritical foams businesses. While Zotefoams will retain the intellectual property associated with ReZorce, it will however wind down the business unit, resulting in one-off costs of up to £1.2m.
Ronan Cox, chief executive, said: "It is disappointing we have not been able to find a partner able to commit to this truly disruptive technology.
"We continue to believe in the potential of this technology, but equally need to ensure that the group has the focus and resources available to maximise the significant potential that we see in our core businesses."
Zotefoams reiterated its full-year outlook despite what it called a "volatile" market, with adjusted profit set to be "comfortably" in line with guidance.
Consensus for year to 31 December is currently £14.9m before one-off costs on revenues of £145.5m.
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