Record profits for FTSE250 chemicals company

FTSE250 chemicals company Croda International has returned record profits after announcing a major £27m investment at its Hull factory.

Sales were up 15% to £1.2bn for the year to December 2016, whilst total reported pre-tax profits reached £257.7m, up from £252.3m.

Croda put its strong performance down to “relentless innovation” as well as selective acquisitions, including that of Incotec, a Dutch crop care company, for £109m, in December 2015.

Last week it announced the £27m in new facilities at Hull which it said will nearly double existing capacity and enable Croda to supply the growing demand for slip additives.

The company specialises in polymer additives which manufacturers use to address issues such as friction, scratch resistance and stability of plastic materials in multiple industries including automotive and packaging.

The Hull site is one of three polymer additive manufacturing plants in Croda, with the others located in Gouda, Netherlands and Mianyang, China.

Work on the plant extension will start shortly and the new capacity will come on stream in late 2018.

Steve Foots, chief executive officer at Croda said: “Croda has delivered a record profit in 2016. We have grown sales through selective acquisitions and organic growth in premium market niches, driving bottom line performance through high value products and relentless innovation.

“Our innovation pipeline is exciting, with sales of New and Protected Products increasing for the fourth consecutive year. We continue to expand in higher growth markets, with Asia the stand out performer, and we are growing with regional and smaller customers.

“Our priorities for 2017 are to drive profitability through a greater focus on premium, faster growth niches; improve performance in less differentiated markets; and continue to grow margins in Performance Technologies and Incotec.

“We have seen some encouraging signs of improving sales trends, which have continued into 2017. We are supporting this through innovation and investment. Croda is a strongly cash generative business with substantial balance sheet capacity.

“We will remain disciplined in both our capital allocation and in driving returns for shareholders. We are confident of delivering continued progress in our performance in 2017.”

Chief technology officer Dr. Keith Layden also announced that he would step down, taking on a non-executive director role at Croda.