Against a tricky backdrop of sluggish global economic growth, Croda (CRDA) has wowed markets with its ability to consistently churn out profit and cash. That continued to be the case here, and went some way to supporting the headline of the chemical producer's full-year statement: "relentless innovation driving record profit".
Admittedly, this record adjusted pre-tax profit of £288m was flattered by currency movements: 95 per cent of Croda's sales are made overseas. Even so, strip out the positive impact of a weaker pound and the maker of ingredients used in skincare, perfumes, energy and automotive industries still achieved respectable pre-tax profit growth of 4.8 per cent.
This impressive bottom-line performance was driven by acquisitions, increasing sales of new and protected patented products and focusing on growth regions such as Asia. To coincide with those efforts, the chemical specialist also reduced almost 20,000 tonnes of commodity sales, which further benefited its product mix but also weighed on the top line - revenue at constant currencies rose by only 3 per cent.
Analysts at Numis expect adjusted pre-tax profits of £313m in 2017, giving EPS of 170p, against £288m and 155p in 2016.
| CRODA INTERNATIONAL (CRDA) | ||||
|---|---|---|---|---|
| ORD PRICE: | 3,570p | MARKET VALUE: | £4.69bn | |
| TOUCH: | 3,570-3,571p | 12-MONTH HIGH: | 3,721p | LOW: 2,788p |
| DIVIDEND YIELD: | 2.1% | PE RATIO: | 24 | |
| NET ASSET VALUE: | 458p* | NET DEBT: | 60% | |
| Year to 31 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 1.05 | 238 | 122 | 59.5 |
| 2013 | 1.08 | 250 | 131 | 64.5 |
| 2014 | 1.05 | 229 | 122 | 65.5 |
| 2015** | 1.08 | 252 | 133 | 69.0 |
| 2016 | 1.24 | 276 | 148 | 74.0 |
| % change | +15 | +9 | +11 | +7 |
Ex-div: 4 May Payment: 1 Jun *Includes intangible assets of £355m, or 271p a share **Does not include special dividend of 100p in respect of 2015 | ||||
