Synthomer (SYNT) swung into a £4.7m pre-tax loss after racking up £63.1m in ‘special items’, many linked to the acquisition and integration of US polymer business Omnova, which was sealed in April. The chemicals company also wrote down the value of its European styrene butadiene rubber (SBR) facility by £10.6m, as it continued to struggle with weak demand.
SBR is one of two product sets within Synthomer’s performance elastomers division, its largest segment, which experienced an 11 per cent drop in its cash profits to £47.6m over the half. SBR is extensively used in graphic paper and carpet manufacturing, and during April and May volumes in these markets were heavily hit by the coronavirus pandemic, falling by more than a fifth.
Carpet volumes in particular rebounded in June, though, while the virus helped drive demand for Synthomer’s nitrile latex, which is used in gloves. This helped to offset some of the division’s profit decline.
Numis forecasts full-year 2020 pre-tax profits and earnings per share of £118.6m and 21.7p respectively, rising to £149.7m and 27.1p in 2021.
| SYNTHOMER (SYNT) | ||||
| ORD PRICE: | 308p | MARKET VALUE: | £1.31bn | |
| TOUCH: | 308-309p | 12-MONTH HIGH: | 371p | LOW: 182p |
| DIVIDEND YIELD: | Nil | PE RATIO: | 56 | |
| NET ASSET VALUE: | 151p* | NET DEBT: | 96% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2019 | 763 | 56.6 | 13.0 | 4.00 |
| 2020 | 734 | -4.7 | -3.1 | nil |
| % change | -4 | -108 | -124 | - |
| Ex-div: | na | |||
| Payment: | na | |||
| *Includes intangible assets of £892m, or 210p a share | ||||
