Croda International meets revised expectations for H1

22nd Jul 2014 08:36

First half profit came in as expected at chemicals company Croda International, having fallen 6% to £125.1m year-on-year in a tough trading environment. The figure, which compared to £133.1m a year earlier, reflected a 4.5% reduction in half year revenue from £562.7m to £537.4m, which were hit in part by the strength of sterling and the euro, which reduced reported sales by £38.3m and operating profit by £11.4m. The numbers were behind its initial expectations, which it lowered in a June statement following weak consumer demand in Europe that hit Personal Care. The biggest decline was seen in the Consumer Care business, which fell 6.7% to £291.8m, although returned to sales growth on a constant currency basis, up 0.8%. Performance Technologies declined 1.6%, although was up 4.8% at constant currency, while Industrial Chemicals fell 2% but climbed 5.3% at constant currency. The group said that despite the weak consumer demand in Europe, it saw strong underlying revenue growth from New and Protected Products, which led to improved margins in both its core divisions. "Differentiated products also made progress, although demand for commodity products in the tail was much weaker," Chairman Martin Flower said. "In addition, we have made good progress in a number of growth markets, especially Asia which achieved 8% underlying sales growth. We expect the new organisation structure to deliver sustained sales growth in future. "Robust cash generation continues to underpin investment in R&D, new technologies and capacity and a number of new growth initiatives in health and skin actives will come on stream in the second half."He also reiterated the group's previous guidance on full year pre-tax profit, saying it would be below the £251.4m delivered in 2013. Numis Securities said the main issue for the company was its "lacklustre top line" but said the numbers contained "no fresh negatives". The dividend for the period was 29.5p, up from the 29p offered this time last year. Shares had fallen 1.08% to 2,190p by 08:36.NR