Croda's (CRDA) new product launches and efforts to home in on customer needs, successfully triggered constant-currency sales growth across all sectors and regions and a 6 per cent jump in adjusted operating profit to £141m. Markets responded to an "encouraging" first half by sending the shares in the maker of surfactants, which are used in ingredients for cosmetic creams, lotions and dietary supplements, up 3 per cent.
The speciality chemical company's bid to move closer to customers and focus on three mega trends - beauty and ageing, health and wellbeing, and sustainability - yielded sales growth of 4 per cent. That partly reflected a 4 per cent increase in revenue at the Croda's personal care segment as emerging markets customers splashed out. Life Sciences, meanwhile, posted sales growth of 15 per cent thanks to buoyant demand for high-purity technology, as more health-conscious consumers climbed on the Omega-3 bandwagon.
Croda's new launches, which included a range of sunscreen products that meet higher manufacturing standards, were equally successful. New and protected products now represent over a quarter of sales and were credited for keeping operating margins steady at 24.6 per cent. But even as the group's net capital expenditure climbed 60 per cent to £38m and it paid off its pension deficit, healthy free cash flow saw net debt dip to £179m.
Broker N+1 Singer expects adjusted EPS of 130.7p in the year to December 2015 (from 124.4p in full-year 2015).
| CRODA INTERNATIONAL (CRDA) | ||||
|---|---|---|---|---|
| ORD PRICE: | 2,892p | MARKET VALUE: | £3.9bn | |
| TOUCH: | 2,887-2,893p | 12-MONTH HIGH: | 3,027p | LOW: 1,965p |
| DIVIDEND YIELD: | 2.3% | PE RATIO: | 22 | |
| NET ASSET VALUE: | 379p* | NET DEBT: | 34% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 537 | 125 | 64.5 | 29.5 |
| 2015 | 565 | 136 | 71.7 | 31.0 |
| % change | +5 | +8 | +11 | +5 |
Ex-div: 27 Aug Payment: 29 Sep *Includes intangible assets of £244m, or 180p a share | ||||
