Chemical group Croda International’s (CRDA) results make frequent reference to its “three strong legs of growth”. This partly refers to its strategy of increasing its sales proportion of “protected innovation” – which largely consists of products it develops in partnership with universities, research labs or small- and medium-sized enterprises (SMEs) – and increasing its use of sustainable processes and materials.
The strategy appears to be working. The group delivered a record profit in 2017. Adjusted pre-tax profit was up 11.1 per cent to £320m, thanks to the increased focus on new and protected products (NPP), while an improved product mix pushed up the margin by 20 basis points to 24.2 per cent. Sales of NPP products grew to 27.6 per cent of total sales, from 20.5 per cent last year.
Bloomberg puts the consensus for adjusted EPS in 2018 at 186p (2017: 179p). The group expects new US tax laws to reduce the effective tax rate by 2.5 percentage points, which will further enhance EPS.
| CRODA INTERNATIONAL (CRDA) | ||||
| ORD PRICE: | 4,476p | MARKET VALUE: | £5.88bn | |
| TOUCH: | 4,472-4,476p | 12-MONTH HIGH: | 4,645p | LOW: 3,321p |
| DIVIDEND YIELD: | 1.8% | PE RATIO: | 25 | |
| NET ASSET VALUE: | 626p* | NET DEBT: | 46% | |
| Year to 31 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 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 |
| 2017 | 1.37 | 314 | 181 | 81.0 |
| % change | +10 | +14 | +22 | +9 |
| Ex-div: | 4 May | |||
| Payment: | 31 May | |||
| *Includes intangible assets of £386m, or 294p a share **Does not include special dividend of 100p in respect of 2016 | ||||
