29th Apr 2009 07:00
29 April 2009
Croda International Plc
First quarter trading statement
Martin Flower, Chairman of Croda International Plc, is due to provide the following update on first quarter trading at today's Annual General Meeting:
"I am pleased to report first quarter profits in line with expectations. Despite the difficult economic climate, the core Consumer Care business produced record revenues and profits. In this division, sales increased 26.6% to £133.7m (Q1 2008: £105.6m*) and operating profit grew 37.0% to £28.9m (Q1 2008: £21.1m*) with Personal Care, Health Care and Crop Care trading strongly but Home Care seeing underlying sales and profits decline. As expected, weaker demand in Industrial Specialities has continued since the year end with sales down 19.7% to £97.1m (Q1 2008: £120.9m*). Basic commodity sales and true industrial speciality volumes are down by similar amounts and this, together with the absence of last year's glycerine benefit, is the reason for the profit decline in this segment, resulting in an operating loss of £2.6m (Q1 2008: £7.1m profit*).
Overall, Group pre-tax profit for continuing operations at £21.7m has improved versus the fourth quarter of 2008 but, as anticipated, is behind the strong first quarter comparatives of 2008 despite the excellent performance in Consumer Care. Favourable currency translation boosted group sales by 20.1%. The average price per tonne increased by 8.0% versus the previous year due to the full year effects of the increases put through in 2008, improved mix and the use of our own global sales team to handle products previously sold via third party distributors. Continuing operations volumes declined by 26.2%, driven by the significant reduction in sales of industrial speciality products and commodities, although the underlying demand has improved each month since December.
Net debt stood at £395.8m at the end of March, in line with expectations, with positive currency translation outweighing unfavourable tax and interest payment phasing which should benefit future quarters.
As part of our continuing strategy to reduce our exposure to basic commodity sectors, we have today announced the closure of our operations at Bromborough in Merseyside, United Kingdom. The site currently employs 115 people and was part of the Uniqema acquisition in 2006. Bromborough predominantly manufactures commodity and industrial speciality chemicals and we will move production of key specialities to other sites. In 2008, the discontinued business had a turnover of £45.3m and made a £2.1m operating profit. This was flattered by favourable glycerine pricing and the site made a loss in the final quarter of 2008 which has worsened into 2009. There will be an exceptional asset write off of around £30.0m and exceptional cash closure costs of approximately £10.0m, although the latter will be significantly offset by the release of working capital.
We include quarterly segmental profitability and sales analysis at the end of this statement.
We expect the weakness in commodity and industrial markets to continue over the coming months but also anticipate continued sales growth in Consumer Care and this, allied to ongoing cost savings and favourable raw material pricing in some sectors, gives us continued confidence that we will make further progress in 2009."
*2008 figures restated to exclude discontinued activities resulting from the closure of Bromborough.
For further information, please contact:
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Mike Humphrey, Group Chief Executive |
Tel: 01405 860551 |
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Sean Christie, Group Finance Director |
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Charlie Armitstead, Financial Dynamics |
Tel: 020 7269 7275 |
The company will host a conference call for analysts at 8.00am today:
Dial-In: +44 (0) 1452 542 303
Please quote "Croda International" to gain access to the call
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Croda International Plc |
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Unaudited income statement before tax and exceptional items* |
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31 March 2009 |
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£m |
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3 months to |
3 months to |
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31 March |
31 March* |
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2009 |
2008 |
Change |
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Consumer Care |
133.7 |
105.6 |
+26.6% |
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Industrial Specialities |
97.1 |
120.9 |
-19.7% |
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Revenues from continuing operations |
230.8 |
226.5 |
+1.9% |
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Consumer Care |
28.9 |
21.1 |
+37.0% |
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Industrial Specialities |
(2.6) |
7.1 |
n/a |
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Operating profit from continuing operations |
26.3 |
28.2 |
-6.7% |
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Net bank and loan interest payable |
(4.5) |
(5.2) |
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Net retirement benefit scheme financing |
(0.1) |
1.0 |
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Profit before tax from continuing operations |
21.7 |
24.0 |
-9.6% |
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Continuing operations operating margin |
11.4% |
12.5% |
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Analysis of turnover uplift for continuing operations* |
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Continuing operations sales volumes |
-26.2% |
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Currency impact |
+20.1% |
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Price/mix |
+8.0% |
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+1.9% |
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2008 trading by Quarter restated to exclude discontinued activities* |
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Q1 |
Q2 |
Q3 |
Q4 |
Year |
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Consumer Care |
105.6 |
107.8 |
111.5 |
113.0 |
437.9 |
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Industrial Specialities |
120.9 |
129.8 |
123.9 |
98.6 |
473.2 |
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Revenues from continuing operations |
226.5 |
237.6 |
235.4 |
211.6 |
911.1 |
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Consumer Care |
21.1 |
23.0 |
21.6 |
24.1 |
89.8 |
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Industrial Specialities |
7.1 |
8.0 |
6.5 |
1.2 |
22.8 |
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Operating profit from continuing operations |
28.2 |
31.0 |
28.1 |
25.3 |
112.6 |
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Interest |
(4.2) |
(4.4) |
(3.8) |
(3.9) |
(16.3) |
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Profit before tax from continuing operations |
24.0 |
26.6 |
24.3 |
21.4 |
96.3 |
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*2008 figures restated to exclude discontinued activities resulting from the closure of Bromborough.
Related Shares:
Croda International