5th Mar 2020 10:22
(Alliance News) - FTSE 250-listed chemicals firm Synthomer PLC on Thursday cut its dividend for 2019, as profit dropped for the first time in four years, amid revenue and volumes declines.
For the year, pretax profit fell by 17% to GBP100.5 million from GBP120.3 million the year before.
This was partly due to a 9.9% drop in revenue to GBP1.46 billion from GBP1.62 billion the year before and a rise in special costs to GBP15.2 million from GBP13.4 million, as a result of the acquisition of specialty chemicals firm Omnova Solutions Inc.
On an underlying basis, pretax profit dropped by 14% to GBP116.2 million from GBP135.1 million
Synthomer said that revenue was down across all the group's divisions due to an overall slowdown in the chemical industry as a result of economic uncertainty and slower key markets.
Overall chemical volumes dropped by 3.4% to 1.47 million tonnes from 1.52 million tonnes the prior year.
The group declared a final dividend of 6.9 pence per share, bringing the total payout to 10.9p, an 11% fall year-on-year from 12.2p.
Looking ahead, Synthomer said it does not expect to see any change to the economic environment, with industrial end markets remaining challenging, and additional uncertainty injected by the potential impact of the coronavirus.
"Despite 2019 being a challenging year for the global chemical industry, Synthomer delivered a resilient performance. Whilst Performance Elastomers styrene-butadiene rubber latex markets declined driven largely by a difficult European paper sector, Performance Elastomers nitrile rubber markets, Functional Solutions and Industrial Specialities all performed in-line with or above 2018 levels. We made considerable progress in developing the group's platform for long-term growth," said Chair Neil Johnson.
Shares in Synthomer were down 4.8% at 260.00 pence on Thursday in London.
By Dayo Laniyan; [email protected]
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