The review, which began at the start of the year, has recommended the closure of its Newport IP5 folding cartons site, placing 150 jobs at risk. If the proposal is confirmed, production is likely to cease at the site, which only opened last year, by the end of 2017.

The announcement comes after the business reported an operating loss of £3.4m on sales of £6.1m in the six months to 30 June 2017.

According to a BBC report, Essentra had received more than £500,000 of Welsh Government funding to expand the Newport operation. It said that the Welsh Government was "deeply disappointed" at the news. 

Group chief executive Paul Forman, who started in the role on 1 January 2017, said that following a period of turbulence, the group had done much in the first six months of 2017 to stabilise the business. 

He said: “The in-depth strategy review process we have just undergone endorses my initial assessment of the company; namely that I firmly believed that the fundamental strengths exist across all our businesses which we can build upon, and that the issues which have recently impacted Essentra were predominantly self-inflicted, and therefore capable of reversal. 

“Having begun to stabilise most aspects of the business and started to refocus on doing the basics better, we now have a clear and robust corporate strategy from which to drive our future development.”

The review sets out a number of strategic guidelines to return Essentra to profitability, including £20m worth of capex for equipment upgrades in its health and personal care packaging division, along with £10m worth of IT investment over the next three years.

It also includes streamlining its activities to focus on its three core businesses (health, component solutions and filter products), with smaller businesses managed as a separate division, along with “scope to drive underlying cashflow generation, with clear financial and capital allocation policies”. 

For the six months to 30 June, the group posted a like-for-like sales increase of 6%, from £494.7m to 522.6m, but adjusted operating profit and adjusted pre-tax profit both saw steep declines of around 30%, with the former dropping like-for-like from £59.8m to £42.8m and the latter from £53m to £37m. Dividend per share remained constant at 6.3p.

The fall in operating profit was put down to lower revenues in its health division, including an intangible amortisation of £11.5m and an exceptional pre-tax charge of £6.4m. 

Excluding the divestment of its Bristol consumer packaging facility, which was sold to Euro Packaging affiliate Broomco on 5 June, like-for-like revenue for health fell 9.2% to £213.4m, with operating profit dropping 78.7% (£22.1m to £4.7m). The group incurred an exceptional item loss of £1.2m on the Bristol site. 

The company’s Outlook Statement said it expects improving trends in H2 2017, as the health division continues to receive short-term focus and remedial action, but it warned that failure to address the continued decline in the division could lead to further significant deterioration in the overall financial performance of the company.

The report made little mention of the integration of Clondalkin’s Specialist Packaging division within the business, which was acquired in 2014 in a $455m (£346m) deal, its biggest acquisition to date. Last year it incurred £3.8m of costs.

Essentra had consolidated the Clondalkin Great Harwood and Northampton operations into the IP5 site, which is now slated for closure. 

On publication, the group's share price was 544p, a fall of 5.5p on yesterday's price following the Newport announcement.