Croda's capacity to surprise was in evidence again as full-year results comfortably beat analysts' expectations. At one point the shares soared 7 per cent to a new high – that's just the start new chief executive Steve Foots was hoping for – and trading has been encouraging since he took over last month.
The high-margin consumer care division stole the headlines. Sales rose 11 per cent to £574.3m, but operating profit jumped 27 per cent to £173.4m and the operating margin topped 30 per cent. Healthcare and crop care grew fastest, but the cosmetics business did well, too. "There has been no trading down," according to Mr Foots, despite austere times. Predictably, the industrial specialities division was less dynamic. Still, annual sales there rose 2 per cent and profits 11 per cent to £69m, and customers returned in January after a weak fourth quarter. Croda has also decided to split its high volume, low-margin process additives operations into a new industrial chemicals division, while organising the remaining lubricants, coatings and polymers business into the performance technologies unit. Management thinks that can grow its margin from 15 to 20 per cent.
Broker Bank of America Merrill Lynch expects adjusted EPS of 132.2p in 2012 (122.5p in 2011).
CRODA (CRDA) | ||||
|---|---|---|---|---|
| ORD PRICE: | 2,109p | MARKET VALUE: | £2.85bn | |
| TOUCH: | 2,108-2,110p | 12-MONTH HIGH: | 2,172p | LOW: 1,470p |
| DIVIDEND YIELD: | 2.6% | PE RATIO: | 17 | |
| NET ASSET VALUE | 197p* | NET DEBT: | 87% | |
| Year to 31 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2007 | 0.81 | 61.0 | 29.7 | 15.8 |
| 2008 | 0.91 | 96.3 | 48.0 | 19.8 |
| 2009 | 0.83 | 90.8 | 42.6 | 21.5 |
| 2010 | 1.00 | 192.0 | 95.4 | 35.0 |
| 2011 | 1.07 | 242.0 | 123.0 | 55.0 |
| % change | +7 | +26 | +29 | +57 |
Ex-div: 2 May Payment: 1 Jun *Includes intangible assets of £205m, or 152p a share | ||||
