Charles Stanley upgrades Croda after first-half results

Charles Stanley upgraded Croda to ‘hold’ from ‘reduce’ in light of the company’s improved performance and the likelihood of a capital return to shareholders, following its first-half results earlier on Tuesday.

The brokerage said the figures were better than expected and a 4% beat at the earnings per share level.

It said Croda delivered good growth, with a solid performance in Healthcare in the first quarter continuing into the second quarter, with better-than-expected sales of pharmaceutical grade Omega-3 as a result of pipeline filling in pharmacies combined with good market penetration, and an improved performance in Crop Care.

Charles Stanley added that the group has also seen margin improvement as sales of its New and Protected Products gain better traction.

“Net debt/EBITDA is a modest 0.6x and a review of the group’s capital structure is likely to result in additional returns being made to shareholders.”

At 14:06, shares were up 3.5% at 2,892p.