Croda pushes ahead in challenging market
CHEMICALS business Croda said this morning it has seen a “modest” but improving growth trend in underlying sales despite demanding market conditions.
In an interim management statement for the period since December 31, 2013, the Goole-based firm said the improving sales trend seen in the second half of 2013 continued through the first quarter of this year, despite the disruption caused by the severe weather in North America and difficult economic conditions in South America.
On a constant currency basis, group turnover was up 2.9% with acquisitions contributing 1.6% to this total. However, adverse currency translation of 6.1% meant that reported sales in sterling were down 3.2% to £274m (2013: £283.1m).
Group operating profit increased 1% to £68.7m while operating margins increased to 25.1%, reflecting favourable product mix.
Pre-tax profits increased slightly to £65.2m from £65.1m with a stronger underlying performance offset by a £3.5m impact from adverse currency translation.
Underlying cash generation was again strong in the quarter, with net debt falling £13.6m to £188.6m after paying over £20m into the UK pension fund in January.
“We expect the modest improvement in underlying sales growth seen in the first quarter to continue. However, adverse currency translation is expected to remain an issue and consequently, second quarter performance is likely to be similar to that seen in the first quarter. The board is confident that the group has the right strategy in place to continue to drive profitable underlying growth,” Croda said.
