29th Jul 2022 18:00
(Alliance News) - Croda International PLC's Consumer Care arm shone as the chemicals firm reported a much-improved first-half outturn.
Strengthening that part of the business has been a priority for the FTSE 100 listing.
Back in March, it outlined its aim to lift the fortunes of its Consumer Care arm.
By 2025, Croda targets sales of GBP1 billion in Consumer Care, up from GBP763 million in 2021.
"In the coming years, Consumer Care expects to deliver a minimum of 5% annual sales growth, with synergies from the recent fragrances & flavours acquisitions in addition to this. In 2022, there is likely to be an additional benefit to sales from the successful recovery of cost inflation," the company said at an investor day in March.
The personal care arm, which part of Consumer Care, includes the Sederma skin care brand. The unit was bolstered by the EUR820 million acquisition of Spanish fragrances firm Iberchem, announced in November 2020.
Croda said its group pretax profit trebled. Fortunes in the consumer arm helped push group half-year pretax profit to GBP636.5 million, up markedly from GBP204.1 million a year ago. Sales grew by 21% to GBP1.13 billion from GBP934.0 million.
Adjusted earnings before interest and tax in the Consumer Care arm amounted to GBP121 million, topping a GBP109 million forecast from Jefferies.
Looking ahead, Croda expects yearly adjusted pretax profit "ahead of previous expectations".
It provided more quantitative guidance for its lipid offering. Lipids are chemicals used in drug formulation. They form part of Croda's Life Sciences arm.
For 2022, it expects lipid sales around USD150 million, down 35% from USD230 million in 2021.
Sales are expected to fad to USD120 million in both 2023 and 2024. Swiss bank UBS, however, said that guidance would be met warmly.
UBS believes buy-side consensus for lipid sales ranges from USD100 million to USD150 million.
"We believe clarity on the expected lipids sales in 2023/24 to be well received by the market," UBS explained.
Croda shares closed 4.1% higher at 7,433.71 pence each in London on Friday.
By Eric Cunha; [email protected]
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