Speciality chemical company Synthomer PLC (LON:SYNT) enjoyed a solid first-half of 2018 and remains on track to meet full-year expectations.
Revenue rose 8.2%, or 6.4% on a constant currency (CC) basis to £833.8mln in the first six months of 2018 from £770.3mln in the corresponding period of 2017.
READ: Synthomer buys Perstorp Belgium as it reports growth in full-year profit
Volumes in the period rose 9.1% to 796,600 tonnes from 730,200 tonnes the year before. The company said it saw good volumes growth in Europe & North America, albeit with a slight softening of unit margins, while volumes in Asia & the rest of the world shot up.
Underlying profit before tax improved 6.4% (CC: 4.3%) to £76.2mln from £71.6mln the year before.
Earnings per share rose 9.5% to 18.4p from 16.8p and the interim dividend was hiked 8.1% to 4p from 3.7p.
In 2016, the group, formerly known as Yule Catto, unveiled a mammoth capital expenditure programme to drive growth and said on Monday that it remains on track to see the larger investments relating to the 90,000 tonnes expansion in Pasir Gudang and the 36,000 tonnes expansion in Worms come online during the latter part of the third quarter 2018 and the first quarter of 2019 respectively.
The group added that it is on track to deliver US$12mln of annualised savings from its 2016 PAC acquisition by the end of this year, with an extra US$2mln of savings likely to be squeezed out by the end of 2019.
“We have made strong operational progress, with continued progress on Safety, Health & Environment policies as well as the Manufacturing Excellence initiatives delivering improved efficiency and output,” said Neil Johnson, the chairman of Synthomer.
“Our investment programme to increase production capacity has continued. We have also invested to strengthen our supply chain resilience and procurement flexibility in a relatively volatile raw material market. Inorganic growth has come through our acquisition of the Pischelsdorf site from BASF during January,” he added.
Synthomer #SYNT H1 results look fine, revenues up to £833.8M (770.3M), PBT £76.2M (71.6M), underlying eps 18.4[ (16.8p), divi 4p (3.7p), outlook cautiously optimistic https://t.co/uL7v56rqSG
— Steve Markus (@smarkus) August 6, 2018
“Notwithstanding ongoing political and economic uncertainty, the group's diversified business means we are well placed to make continued progress and the board's expectations for the full year remain unchanged,” Synthomer's chairman said.
“Looking to 2019, we remain cautiously optimistic about the future prospects of the group,” Johnson said.
UBS noted that profit before tax was up 4% year-on-year in the first half but said the growth rate needs to double in the second half for the company to hit consensus forecasts.
The shares were up 3.5% at 538p in early deals.
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