25th Feb 2014 09:03
LONDON (Alliance News) - Croda International PLC said Tuesday pretax profit rose 5% to GBP250.1 million for the year as the firm raised its dividend on progress made amid "demanding market conditions."
The chemicals firm said the rise in pretax profit demonstrates solid growth for the year, increasing to GBP250.1 million from GBP238.3 million the previous year, despite demanding conditions.
Croda said adjusted operating profit was up 3.7% for the year, up to GBP264.6 million from the GBP255.1 million reported last year.
In its preliminary results for the year to December 31 2013, the FTSE 250-listed firm said innovation and an improving product mix helped to drive Croda's strong earnings per share growth during the period.
Croda recorded strong sales growth from continuing operations, rising 2.4% for the year, reaching GBP1.07 billion from GBP1.05 billion last year. Consumer Care sales reached GBP593.2 million from GBP586.4 million last year, up 1.2%; Performance Technologies sales grew 1.1% to GBP387.1 million from GBP382.8 million; and sales in Industrial Chemicals jumped 16.9% to GBP96.7 million from GBP82.7 million last year.
Profit after tax from continuing operations rose to GBP177.9 million from GBP151 million last year, said Croda.
Croda said sales growth, "of 10.8% in new and protected products (NPP), supported a record return on sales in both Consumer Care, up 32.2%, and Performance Technologies, up 16.3%. Profits were flat in Industrial Chemicals." The firm added that its improved product mix has helped it increase the group's return on sales to 24.6%, up from 24.3% in 2012.
Adjusted earnings per share for the year were up 8.3%, upped to 132.2 pence from 122.1 pence last year, resulting in an 8.4% boost to Croda's dividend per share to 64.5 pence from 59.5 pence per share.
During the reporting period, Croda acquired two new businesses, which it says added valuable new technologies and expanded its geographical reach. The firm acquired a specialty product business from Arizona Chemical in May and took a 65% stake in Sichuan Sipo in China in August.
Chairman Martin Flower said, "In another year of demanding market conditions, Croda continued its track record of pre-tax profit and earnings per share growth. From a strategic perspective, we have made real progress, maintaining our focus on innovation and developing our business in both existing and emerging markets. With record sales of new and protected products across the business, acquisitions in North America and China, three more R&D laboratories, two more customer training centres and further investment in our global sales force, our platform for sustainable, organic growth is much stronger."
Flower noted that trading in 2014 has begun in line with Croda's expectation, though stated that the unpredictable nature of global trends means that its forward visibility remains "limited."
Also expected to affect the firm during the year is currency translation, with an adverse impact on profit growth in 2014 expected. "If last year's results had been translated using closing rates as at December 2013, pre-tax profits for 2013 would have been approximately GBP9 million lower," said Flower.
However, Croda remains positive, with the Board confident that Croda has the right strategy in place to deliver its medium term growth targets. Looking ahead, Flower said the firm expects to achieve constant currency sales and profit growth in 2014 characterised by an improvement in margins in Performance Technologies, progressing towards a target of 20% return on sales; further NPP sales growth; and strong cash generation.
Shares in the chemicals firm were trading up 0.24% at 2,507 pence per share in early trading Tuesday.
By Alice Attwood; [email protected]; @AliceAtAlliance
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