Record earnings at Synthomer despite lower prices
Updated : 09:33
Depressed commodities prices pushed revenue down at Synthomer in 2015, but a focus on tight cost control saw the firm reporting some record numbers.
The FTSE 250 company saw total sales, including its share of joint ventures, drop 9.7% during the year to £894m. Total volumes were up, however, by 5% to 1,251 kilotonnes.
Synthomer's operating profit improved 6.6% to £102.9m. Of that, Europe and North America dropped 14.5% while Asia and Rest of World improved 127.5%. Profit before tax was £95.3m, up 10.8% from £86m.
Earnings per share were up 10.3% to 21.5p, from 19.5p. The full year dividend was increased in line with dividend policy, by 10% to 8.6p per share, from 7.8p.
"It has been an excellent year for Synthomer with the Group reporting record underlying profit before tax," said Synthomer chairman Neil Johnson.
"This result reflects favourable market conditions in our nitrile business in Asia and our ongoing strategic initiatives to invest in future growth through innovation, increased capacity and tight cost control. We have also benefitted from the stability and resilience of our businesses in Europe and North America," he added.
Looking forward, the company said it remained confident that it is well placed to perform, citing the strategy it had in place.
Synthomer's outlook for the Europe and North America businesses remained cautious, with overall volumes and unit margins continuing at similar levels through 2016.
For Asia and Rest of World, which remained heavily influenced by the firm's Asian nitrile business, Synthomer said a number of nitrile producers - including itself - had announced plans to increase capacity during the latter part of 2016 and early 2017.
"Whilst we are confident of continued strong growth in demand from the nitrile glove manufacturers during 2016 and beyond, we expect this planned capacity increase to impact the supply/demand balance during the second half of 2016 leading to similar volumes and margins to 2015 for the year as a whole," Johnson explained.