21st Jul 2015 10:24
LONDON (Alliance News) - Specialty chemicals company Croda International PLC on Tuesday said its pretax profit rose in the first half of 2015 on the back of better revenue across its operations, prompting it to hike its interim payout and sending its shares higher in London trade throughout the morning.
The FTSE 250-listed company, which makes surfactants used in ingredients for cosmetic creams and lotions and for dietary supplements such as Omega-3 oils, along with lubricants and polymer-based products, said its pretax profit for the six months to June 30 was GBP135.6 million, up from GBP125.1 million a year earlier.
Revenue for the group was up to GBP564.6 million from GBP537.4 million, boosted by strong growth in its personal care and life sciences business and a recovery in sales in its performance technologies arm. Croda said it saw growth in all regions in the first half and said revenue in the second quarter was ahead of the first three months.
Croda said it will pay an interim dividend of 31.0 pence per share, up from 29.5 pence per share a year earlier.
"Croda's performance in the first half of 2015 has been encouraging. The recovery in underlying sales trends, which began in the second half of last year, has continued to strengthen, operating margin has remained strong, and pre-tax profit has increased over 8%. This progress has been underpinned by record sales of new and protected products," said Croda Chairman Martin Flower.
"We expect to continue to deliver growth through the second half of the year, albeit against a stronger comparator period. Whilst conditions remain uncertain in Europe, we are encouraged by recent growth. Overall, we remain on track to deliver our expectations for the full year and to generate strong returns for shareholders," Flower added.
Croda shares were up 4.7% on the news to 2,925.00 pence, one of the best performers in the FTSE 250 late morning Tuesday.
Croda said its performance in the first half was "encouraging", with the recovery seen in its underlying sales trends in the second half of 2015 continuing into the new year.
In its Personal Care division, revenue rose to GBP197.1 million from GBP188.7 million, driven by new product launches, a better sales infrastructure and increased demand from key customers in Europe. In the European market, Croda returned to growth in the half, with a particular boost from its skin care franchise, while trading in Latin America was boosted by strong demand amid signs that consumers in the region are focusing discretionary spending on personal care products. Asia growth for the division also was positive.
Life Sciences revenue was up to GBP118.8 million from GBP103.1 million in the half, with strong growth in high purity excipients in its health care business, better-than-expected pharmaceutical-grade Omega-3 sales, and an improved performance in its crop care arm, particularly in Europe and Latin America. The Omega-3 sales were driven by pipeline filling in pharmacies in North America and a more successful market penetration than Croda had anticipated. High purity excipients, formulators used in pharmaceutical and nutrition markets, performed well in all regions, with broad-based growth in both human and animal treatments.
Croda's Performance Technologies division, which provides lubricants, polymer products and coatings, recovered from a slow start to the year in the second quarter, which helped revenue for the first half to rise to GBP185.7 million from GBP182.3 million. Growth was driven by new product launches in its polymer additives line, along with good performances in coatings and polymers and a steady recovery in lubricants volumes following destocking which hit its first quarter trading.
In Industrial Chemicals, Croda saw sales broadly flat at GBP63.0 million, against GBP63.3 million a year earlier, an improved performance following a tough 2014 when weak commodity prices dragged on sales for the division. Croda saw growth for the division in Europe and Asia, with the latter boosted by higher value-added sales from Sipo, its Chinese specialty chemicals subsidiary.
By Sam Unsted; [email protected]; @SamUAtAlliance
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