Synthomer trading in line, reiterates 2017 expectations

Specialist chemical group Synthomer said on Thursday that it continues to trade in line with the board's expectations as it reiterated it 2017 expectations.

In a trading update for the first quarter to the end of March, the company said its business in Europe and North America delivered a solid performance, with results ahead of the same period a year ago, reflecting the acquisitions of PAC and Perstorp Oxo Belgium, and robust trading in the heritage unit.

Synthomer said higher volumes mostly reflected the positive impact of PAC following its full integration into the business. Unit margins were also up on 2016, in line with expectations.

Although raw material prices have been volatile, the company said it continued to effectively manage these movements and remains confident of being able to continue to do so.

In Asia and Rest of World, the performance was in line with the group's expectations. Nitrile margins remained stable relative to the final quarter of last year, albeit lower than the strong comparative first quarter of 2016, as expected.

Synthomer said volumes were lower than the first quarter of last year due to the sale of its South African business in August 2016, and some short-term de-stocking in March following continued raw material price volatility.

Net debt increased from £150m at the year end to £257m at the end of March due to the acquisition of Perstorp Oxo Belgium for €78m in March, with the balance accounted for by working capital in a volatile but net rising raw material price environment.

At 0855 BST, the shares were down 0.3% to 495.50p.