Synthomer warns on full-year profit

11th Jul 2014 08:15

Specialist chemical company Synthomer warned it now expects the strength of sterling to reduce its full-year operating profit by around £5m, a further £1m on top of its previous expectations. This, combined with weaker margins in its nitrile business, has meant full-year pre-tax profit is set to be broadly in-line with the level achieved in 2013.In both Asia and Rest of the World, the Nitrile business's margins continued to be pressured by the ongoing strong competition between glove manufacturers, and was further affected by weak Butadiene pricing and a related period of customer de-stocking.As a result, first half operating profit from Asia will be around £4m below the £11.5m delivered in 2013. "However, as the second half progresses we continue to expect demand for nitrile latex to grow and unit margins to firm," the group said. Overall, Synthomer has experienced similar trends to those seen in the first quarter, with Europe and North America both trading in a very similar fashion. "Volumes were ahead of the prior year in our Construction & Coatings, Functional Polymers and Performance Polymers segments, whilst average cash margins in the second quarter have remained similar to the first three months of 2014," it added. Shares were knocked 4.99% lower to 207.60p by 08:07. NR