Croda (CRDA) finance director Sean Christie described the speciality chemicals company's first-half performance as workmanlike. Double-digit growth at both its European cosmetics and healthcare businesses only partially offset weakness in crop care and European automotive, and volumes actually fell. Better margins did nudge operating profit up over 4 per cent, but paying down the pension deficit saved £1.9m and flattered the bottom line. Weak comparisons, however, make a better second half almost inevitable.
A poor start to the year at Croda's crop care business held back growth at the consumer care division. Customers in Europe and North America began planting crops later than usual, so sales of ingredients which make herbicides and pesticides work better struggled. However, a return to growth in June is encouraging and further improvement is expected in the months ahead. Europe's flagging car industry dented sales, too, although new higher-margin products delivered record returns at the performance technologies unit. And, with sales of clever chemicals to oil explorers and miners growing fast, operating profits there rose 5 per cent to £34.5m. A weak Japanese yen capped revenue growth in Asia at 1 per cent. Still, strip out Japan and it was 6 per cent, driven largely by China and South Korea.
Broker Deutsche Bank expects full-year pre-tax profit of £265m and EPS of 137.2p, up from £253m and 130p in 2012.
CRODA (CRDA) | ||||
|---|---|---|---|---|
| ORD PRICE: | 2,520p | MARKET VALUE: | £3.42bn | |
| TOUCH: | 2,520-2,523p | 12-MONTH HIGH: | 2,846p | Low: 2,000p |
| DIVIDEND YIELD: | 2.5% | PE RATIO: | 20 | |
| NET ASSET VALUE: | 299p* | NET DEBT: | 55% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 555 | 125 | 62.9 | 26.8 |
| 2013 | 563 | 133 | 68.1 | 29.0 |
| % change | +1 | +6 | +8 | +8 |
Ex-div: 4 Sep Payment: 3 Oct *Includes intangible assets of £220.8m, or 163p a share | ||||
