Synthomer splashes out with special dividend after second-half recovery
Chemicals group Synthomer has put a difficult year to bed, delivering full-year results slightly ahead of expectations and a special dividend after after a series of second-half downgrades.
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Looking forward to 2015 under newly appointed chief executive Calum MacLean, the FTSE 250 group remained cautious on the European economy and the impact of the euro, but expected to benefit from lower raw material prices and improved performance from its Asian nitrile business.
Revenues at Synthomer declined by 6.1% to £990.5m, or by a lesser 2% on a constant currency basis, as a positive first half in Europe was outweighed by weaker demand in the second half as challenging conditions hit the Asian nitrile business.
But, despite continuing weakness in Europe, a bounce back in Asian nitrile volumes and margins saw full year profit before tax fall just 0.2% at a constant currency level to £86.0m, exceeding downgraded expectations.
Chairman Neil Johnson also announced increased final ordinary dividend of 4.8p plus a special dividend of 7.8p per share, bringing the total dividend for the year to 15.6p, but delivered a mixed outlook statement.
"We remain cautious on the European economy and its impact on demand, but some benefit from lower raw material prices may help offset any volume weakness," he said.
"However, the weakness of the euro, will affect the translation of our European business results."
Management predicts the year ahead will see a continuation of the recently improved performance from the Asian nitrile business, given the continuing tightening in the supply demand position and improving margins.