Geographic and product diversity pay off for Synthomer

4th Mar 2019 07:25

(Sharecast News) - Synthomer reported a 9.4% improvement in its full-year revenue on Monday, to £1.6bn, with underlying profit before tax rising 3.9% to a record £135.1m.The FTSE 250 chemicals company said that reflected the benefits of its geographic diversity and product differentiation.It said operating profit in its Asia and Rest of World geography was 30% higher in the year ended 31 December, reflecting further volume improvements in Nitrile latex, as well as margins.In Europe and North America, its operating profit was 5% lower, which the board put down to a £5.3m US dollar transactional currency impact.The group claimed to have absorbed £10.1m in US dollar currency transactional headwinds.Its IFRS profit before tax was ahead 39.2% at £120.3m.Synthomer reported that its 90 kilotonne expansion in Nitrile latex was delivered safely, on time and on budget, and also reported a decent return on its research and development investment, with new products representing 21% of the firm's total sales volumes, up from 20% in 2017.Underlying earnings per share were 6.8% higher at 32.8p, with the board also confirming an increased dividend per share, rising 7.4% to 13.1p in line the company's with dividend policy.The company had "good" liquidity and a low leverage, which the directors said allowed for investment in growth on both an organic basis and through mergers and acquisitions, with its net debt-to-EBITDA ratio standing at 1.2x."I am pleased to report a year of good progress, highlighted by a fourth consecutive year of growth in underlying profitability," said Synthomer chairman Neil Johnson."Progress has been underpinned by capital investment in higher growth markets, a focus on innovation, and our disciplined mergers and acquisitions strategy, overcoming a challenging market environment."Johnson said looking forward, the group's leading market positions, incremental low cost production capacity, geographic diversity and product differentiation ensured it was "well-placed" to navigate the current global political and economic uncertainties."Given this, we are confident of making further progress in 2019 and the board's expectations remain unchanged."