Synthomer's 2013 profits hurt by weak European sales

28th Feb 2014 11:08

- Sales and profits fall- Growth in Asia offset by slump in Europe and North America- Dividend raised 9.1 per cent British chemical maker Synthomer said 2013 sales fell 5.1 per cent to 1.05bn pounds, reflecting weak economic conditions in Europe and North America. The company's pre-tax profit dropped 4.8% to £90.1m and operating profit declined 5.8% to £108.8m in the year through December, according to preliminary results on Friday. Earnings per share dipped 1% to 20.7p. Operating profit in Asia grew 20.9% to £23.1m, driven continued recovery in the Asian nitrile business. However, the results were offset by business in Europe and North America which saw profit edge down 10.4% to £89.8m as margins declined. In an effort to strengthen the business the group is investing in additional capacity, manufacturing and research and development.The company is also targeting €10m of cost savings in Europe. "However, we have entered 2014 with unit cash margins across the [Europe and North America] business slightly below the 2013 average, and weakening of the Euro through the second half of 2013 will create a year-on-year drag," said Chief Executive Adrian Witfield. "We expect some further improvement in [Asia] as the supply demand position in Nitrile tightens and Synthomer continues to benefit from additional capacity and investment." Net debt stood at £133.6m at the end of the period, down £22.2m on the start of the year.The full-year dividend was raised by 9.1% to 6p per share. RD