UPDATE 1-Essentra eyes more deals in emerging markets

Thu Feb 20, 2014 9:35am EST

* Company says looking at four potential acquisitions

* Revenue rises 20 percent to 798 mln stg

* Adjusted pretax profit up 28 percent to 119.8 mln stg

By Tasim Zahid

Feb 20 (Reuters) - Packaging products manufacturer Essentra Plc said it was actively looking at four more acquisitions as it expands into emerging markets.

"They cover the spectrum (in terms of size). We are looking at one small, two mid and one large acquisition," Chief Executive Colin Day told Reuters.

The FTSE-250 company has been growing its profits by making acquisitions in the last few years. Since Day took over as CEO in 2011, Essentra has spent more than 300 million pounds (about$500 million) on nine acquisitions.

The company also reported on Thursday a 28 percent jump in full-year adjusted profit, helped by a jump in sales of its filters. Acquisitions contributed 11 percent to full-year revenue.

"We are continuing to actively seek M&A prospects in the fast-growing markets Asia-Pacific, Latin America and parts of Eastern Europe and Russia," Day said in an interview.

Essentra, earlier known as Filtrona, makes products ranging from cigarette filters and fasteners to cartons and self-adhesive labels. The company has also started making non-smoke filters as it looks to tap the fast-growing e-cigarette industry.

Sales at its filters unit rose 16.5 percent to 269.9 million pounds, accounting for more than a third of total sales. About 61 percent of sales volumes in the unit came from Asia.

Adjusted pretax profit rose 28 percent to 119.8 million pounds, while revenue rose 20 percent to 798 million pounds.

Shares in the London-listed company, which announced a final dividend of 10.6 pence per share, were down 5.8 percent at 842 pence at 1430 GMT. The stock had gained about 50 percent in the past 12 months.

"The results are in line, and there is nothing to drag it down and it's on a high rating. The markets are down and its just a bit of profit taking, no more than that," Numis Securities analyst, Mike Murphy told Reuters.