Zotefoams plc (LSE: ZTF), a world leader in high-performance foam technology, has published a trading update for the three months to 30 September 2026, confirming that full-year adjusted profit before tax remains in line with market expectations of £26.3m. Total Q3 Group revenue rose 9% to £41.8m, driven by strong non-footwear markets and the contribution from recently acquired OKC, though footwear revenue fell sharply to £9.3m from £17.6m in the same period last year. The update also confirms the completed acquisition of Verttec LLC and ongoing first-stage production trials at Zotefoams' new Vietnam facility, marking continued strategic execution under the Group's Expanding Beyond the Core strategy.

Key Points

  • Zotefoams plc (LSE: ZTF) is a London-headquartered manufacturer of high-performance foams with sites across the UK, USA, Poland, Spain, China, and Vietnam
  • Q3 2026 Group revenue grew 9% to £41.8m, with year-to-date revenue up 18% to £137.1m; organic revenue was £35.6m in Q3, down 7%, reflecting lower footwear sales
  • Non-footwear markets now represent 72% of year-to-date Group revenue; Verttec LLC acquired for initial consideration of $5.1m plus up to $2.2m contingent on performance over 24 months
  • Investors will be watching the conclusion of the UK restructuring consultation in November 2026, Vietnam customer approvals, and the next trading update scheduled for 21 January 2027

Non-Footwear Divisions Drive 9% Q3 Revenue Growth Across North America, EMEA and Asia

Non-footwear markets delivered organic growth of 28% in Q3 2026, with North America particularly strong at 33%. Transport and Smart Technologies grew 38% in Q3, while Construction and Other Industrial rose 32%, reflecting what the announcement describes as ongoing structural demand drivers. OKC, acquired in November 2025, contributed £6.2m in Q3 and £21.0m year-to-date, trading in line with plan. Asia revenue was broadly flat versus the prior year, while T-FIT® advanced insulation continued to build market presence in China and India, adding geographic breadth to the Group's revenue base.

Footwear Revenue Falls More Sharply Than Anticipated, Vietnam Transition Progresses to First-Stage Trials

Footwear revenue in Q3 was £9.3m, compared with £17.6m in Q3 2025, a decline the Group acknowledged was greater than previously anticipated. Year-to-date footwear revenue stands at £37.7m against £54.6m in the same period last year. The announcement states that first-stage production trials are under way at the new Vietnam facility, with customer approvals expected around the end of 2026 and commercial production anticipated from 2027. The facility has received a $10m strategic investment from partner Seo Heung, bringing total site investment to approximately $32m, and remains on budget.

Verttec Acquisition and Proposed UK Restructuring Expected to Deliver £4m Annualised Savings from 2027

The Group completed the acquisition of Verttec LLC, a Pennsylvania-based manufacturer of technical crosslinked roll foams, on 13 October 2026 for initial consideration of $5.1m, with up to $2.2m payable over 24 months subject to performance. Subject to the outcome of collective consultation, expected to conclude in November 2026, the proposed UK restructuring is forecast to deliver annualised savings of approximately £4m from 2027, with a payback period of less than one year. Associated one-off costs will be presented as adjusting items in the second half of 2026.

Balance Sheet Leverage at 1.0x as Group Reaffirms Medium-Term Revenue Target Above £230m by FY2029

Leverage stood at 1.0x at 30 September 2026, up from 0.5x a year earlier, reflecting acquisition activity and continued capital investment, but remaining comfortably within banking covenants and below the Group's 2.0x upper operating range. Cash conversion improved to 93% in Q3, lifting the year-to-date figure to 49% from 37% at the half year. The Board reaffirmed its medium-term ambitions of revenue above £230m and operating profit of £40m by FY2029, with the next trading update scheduled for 21 January 2027.