Zotefoams (LON: ZTF) had a tough second half last year and one Tuesday it will report the outcome for the year as a whole. It is expected that 2019 revenues will be flat and there will be a fall in pre-tax profit.

The foams manufacturer has continued to invest in the business and part of the reason for an anticipated decline in pre-tax profit from £11.1m to £9.1m is a higher depreciation charge.

There was a 12% increase in interim revenues last year, so there was a significant reduction in revenues in the second half. That was partly because the high performance products (HPP) division had tough comparators, but the Azote polyolefin foams division was the main reason behind the fall.

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Zotefoams has spent nearly £60m on increasing capacity by 60% over the past three years. That is why net debt has probably increased to £36.5m at the end of 2019. There are facilities of £57.5m.

The benefits of this investment will show through in the next couple of years. However, those benefits could be delayed if demand is weak.

The announcement on Tuesday should provide some indication of the potential knock-on effect of COVID-19. This year Azote was expected to make a small recovery and there was likely to be a stronger year from HPP.

The interim dividend was raised by 3% to 2.03p a share. Management will have to take a view on cash conservation when it makes a decision on whether or not to pay a final dividend.