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Croda profit hit by weak personal care and industrial demand

By Sean Farrell

Date: Tuesday 25 Feb 2020

Croda profit hit by weak personal care and industrial demand

(Sharecast News) - Croda International's annual profit fell after the specialty chemicals company's sales were affected by a slower US personal care market and weak industrial demand.
Adjusted pretax profit for the year to the end of December declined 2.8% to ?322.1m from a year earlier as core sales slipped 0.2% to ?1.27bn. Excluding currency movements profit fell 3.7% and sales dropped 2.3%.

Personal care sales fell 3% at constant currency to ?485.2m and performance technologies fell 7.3% to ?430.2m. The FTSE 100 company blamed trade tensions for lower personal care sales and economic uncertainty for specialty chemicals' decline. Life sciences had record sales of ?350.5m, up 6%.

Croda said consumer markets improved in the final quarter but that industrial demand stayed weak and was not expected to pick up in 2020. It told investors to expect 2020 growth to be concentrated in the second half of the year.

Return on sales was unchanged at 24.7%. The company increased its annual dividend by 3.4% to 90p a share.

The company said it was monitoring the impact of coronavirus on its business and that there was potential for disruption to customer and consumer demand. In China, which accounts for 6% of sales and 2% of production, its sales offices and production units have reopened in a limited capacity.

Steve Foots, Croda's chief executive, said: In 2019, we delivered a resilient performance with a strong margin maintained and increased cash flow, despite subdued market conditions. In the year ahead, subject to trading conditions remaining similar, we expect to make further progress in our consumer markets, whilst demand in industrial markets is expected to remain weak but stable. Growth will be second half weighted."

Croda shares fell 1.2% to ?48.60 at 08:20 GMT.


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