28th Feb 2014 08:32
LONDON (Alliance News) - Synthomer PLC saw its shares fall in early trading Friday after the company said that subdued economic conditions in Europe and North America hit its balance sheet for the full-year.
The chemicals company said sales declined 5.1% for the year, to GBP1.05 billion from GBP1.11 billion last year.
Operating profit dropped 5.8% for the year to December 31, 2013 fell by 5.8% to GBP104.8 million, from the reported GBP111.2 million last year, with Synthomer's Europe and North America operations showing a 10.4% drop, to GBP89.8 million from GBP100.2 million in 2012.
Asia and Rest of the World fared better, with a 21% increase in underlying operating profit to GBP23.1 million from GBP19.1 million, driven by a continued recovery in the Asian nitrile business, which developed ahead of expectations in 2013, said Synthomer.
Profit before tax declined on last year, down 4.7% to GBP90.1 million from GPB94.6 million.
Synthomer reported a 1% drop in earnings per share for the year, down to 20.7 pence to 20.9 pence per share.
In line with the board's commitment to reduce dividend cover to three times by 2015, Synthomer reported a 9% increase in its full-year dividend to 6 pence per share, up from 5.5 pence in 2012.
Despite the results hit, the firm said its performance was "resilient" in 2013. During the year, Synthomer said it has made significant investments in additional capacity and Emerging Markets, continued to focus on innovation, as well as driving efficiencies through plant capability improvements and raw material cost management,
The firm reports that it ended the year in a stronger cash position, with it net debt reduced to GBP133.6 million from GBP155.8 million in 2012.
Adrian Whitfield, Chief Executive Officer, said, "Synthomer has delivered a resilient performance... We have remained focused on strengthening the business, investing in additional capacity, manufacturing and R&D capabilities, in innovation and our people.
"Whilst European macroeconomic indicators have started to show some more positive trends, we still see limited evidence of a sustained improvement in trading conditions in Europe... However, we have entered 2014 with unit cash margins across the ENA business slightly below the 2013 average, and weakening of the Euro through the second half of 2013 will create a year-on-year drag. We expect some further improvement in ARW as the supply demand position in Nitrile tightens and Synthomer continues to benefit from additional capacity and investment," Whitfield added.
Looking ahead, the board remains confident that Synthomer is well placed for the future despite the European trading conditions, said the CEO, adding that the results recorded during 2013 demonstrates the Group's resilience in the context of the economic conditions.
In 2014, the firm will continue to look for further investment opportunities to expand its footprint in Asia, it said.
Shares in the chemicals firm have fallen during early trading, down 0.5% at 258.47 pence per share Friday.
By Alice Attwood; [email protected]; @AliceAtAlliance
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