Croda eyes further progress in year ahead

Speciality chemicals manufacturer Croda Interntional drove full year earnings higher and added that despite persistent economic uncertainty, particularly in Europe, it has made an encouraging start to the year and is confident of further progress in 2013.

Pre-tax profit rose 6.6% to £253.2m for the year to December 31st 2012 from £237.5m the same time a year earlier following strong final quarter growth from Consumer Care and Performance Technologies. Sales on continuing operations increased 2.3% to £1.1bn.

Sales at Consumer Care rose to £586.4m from £571.4m while Performance Technologies climbed to £382.8m from £373.6m.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

Sales at Industrial Chemicals fell to £82.7m from £83.0m previously. The figures reflect high raw material prices and competitive commodity and textile markets, Croda said, although it did see an improving trend in the second half of the year.

Chairman Martin Flower said: "This achievement in tough economic conditions demonstrates the resilience of our Consumer Care and Performance Technologies businesses, with both sectors reporting higher profits and a further improvement in margins."

Earnings per share from continuing operations increased 8.2% to 130.0p. Croda said its balance sheet has been further improved with reductions in net debt and its pension deficit.

"Our progress reflects our focus on sustainable growth through continued product innovation in niche markets and increasing investment in new technologies and emerging markets, particularly in Asia and Latin America," Flower added.

Croda recorded fourth quarter underlying sales growth of 5.7%. The increase in sales and profitability in the fourth quarter was evident in all business sectors, the group explained.

Looking ahead Croda said: "Economic uncertainty continues, particularly in Europe, but we have made an encouraging start to the year and the board is confident of further progress in 2013."

The board is now recommending an increased final dividend of 32.75p compared to 30.25p in 2011. Together with the interim dividend of 26.75p, this makes a total dividend of 59.5p an increase of 8.2% for the year.

CJ