'Innovation' remains the buzzword at speciality chemicals group Croda (CRDA), with sales of new and protected products approaching the £200m mark at the half-year, more than a quarter of the group total. The impact of novel, proprietary inputs has been particularly noticeable in the personal care segment on the back of rising demand for hair, solar and skin treatments. Analysts expressed some concern over organic growth rates in this corner of the business at the outset of 2017, but management now anticipates growth of 2 per cent to 3 per cent over the second half. The focus on innovation is intensifying due to the growing number of partnership arrangements with universities and small enterprises, “supported by new funding secured from government and research councils”.
The East Riding-based group is developing a richer business mix through targeting premium market niches, evidenced by improving margins in the life sciences and performance technologies businesses, with the latter segment growing sales by 9.1 per cent on a constant-currency basis and adjusted operating profits by 8.1 per cent. The group as a whole registered 5.4 per cent growth in operating profits at fixed currencies to £176m with return on sales down 20 basis points on the prior comparative, but healthy enough at 24.9 per cent.
JPMorgan Cazenove gives adjusted profits of £328m for the December 2017 year-end, leading to EPS of 169p, against £298m and 154p in 2016.
| CRODA INTERNATIONAL (CRDA) | ||||
| ORD PRICE: | 3,703p | MARKET VALUE: | £ 4.87bn | |
| TOUCH: | 3,700-3,703p | 12-MONTH HIGH: | 4,025p | LOW: 3,066p |
| DIVIDEND YIELD: | 2.1% | PE RATIO: | 23 | |
| NET ASSET VALUE: | 528p* | NET DEBT: | 52% | |
| Half-year to | Turnover | Pre-tax | Earnings per | Dividend |
| 30 Jun | (£m) | profit (£m) | share (p) | per share (p) |
| 2016 | 609 | 145 | 77.0 | 32.75 |
| 2017 | 707 | 168 | 92.4 | 35.00 |
| % change | +16 | +16 | +20 | +7 |
| Ex-div: | 31 Aug | |||
| Payment: | 03 Oct | |||
| *Includes intangible assets of £354m, or 270p a share | ||||
