Synthomer reports in line 1H trading, reiterates full-year guidance

Synthomer reported growth in revenues, earnings and underlying earnings per share over the first half of 2024 and reiterated its full-year guidance.

Nonetheless, whilst trading was in line with expectations, there was no evidence of a "sustained" increase in end-market demand.

"While we remain cautiously encouraged by trading in some end markets since the start of the year, evidence of a broad-based recovery in demand remains limited," Synthomer boss, Michael Willome, said.

"Despite this, we have made earnings progress by delivering on our cost and operational efficiency programmes, and we continue to strengthen our strategic positioning for the future by focusing on our speciality businesses, creatively managing our resources and enhancing our operating leverage."

Revenues for the six months ending on 30 June were ahead by 3.5% to £1.05bn at constant currencies.

Earnings before interest and tax meanwhile rose by 18.7% to £29.0m.

On an underlying basis, EPS came in at 1.3 after -8.0 in 2023.

The specialty chemicals manufacturer also said that it was on track to turn positive on free cash flow for the full-year and that it had extended its debt maturities.

Modest positive free cash flows were anticipated even without a broad-based improvement in demand.

Free cash flow over the latest six-month stretch was negative to the tune of £31.2m.

However, net debt shrank from £795.8m one year before to £560.6m.

At 4.7 times its EBITDA operating profit, net debt was "well within" the limits set out in its debt covenants, the company said.

Management also noted that it had refinanced a €350m bond with the next debt maturity in 2027.