Enigmatic Croda falls despite strong profits

27th Oct 2011 08:49

Croda International, which makes speciality chemicals for products like leather finishes and sealants, has seen a 5.1% growth in revenue in its third quarter compared to the same period of 2010.Group sales came in at £265.6m up from £252.6m in 2010, with most parts of the business seeing an improving trend during the quarter.More interestingly the pre-tax profit figure for the quarter was up 20.8% at £57.4m."I am pleased to report good turnover and profit progress in the third quarter, driven by sales growth and margin improvement in our core businesses," said Company chairman, Martin Flower. The Consumer Care division saw sales rise 13.6% year-on-year (yoy) while operating profit rose 30.8%. The Industrial Specialities unit's turnover declined 3.5% against what the company termed "tough comparatives of a particularly strong third quarter in 2010". The shortfall was in July, with sales in the rest of the period ahead of 2010. Operating profit was down 6.8% yoy with a decrease in commodity and by-product profitability being partially mitigated by stronger performances elsewhere in the sector.Croda, a company with a relatively low profile on the FTSE 350, also managed to reduce debt by £15.5m to £237.8m, despite completing a £50m share buy back programme during the period.Croda's chairman, Martin Flower, expects the company to continue to bloom for the rest of this year and next. "Croda continues to trade well and we expect to report further progress in the final quarter and into 2012," he revealed.The market, however, was unimpressed with shares falling 3.35% in early trading, but this should be seen in the context of a 20% rise in value over the last 12 months and a five year return of 243%.BS