Synthomer profits, revenue fall in 'challenging' markets

In its preliminary results for the year to the end of December 2019, the supplier of aqueous polymers said earnings before interest, tax, depreciation and amortisation fell 1.7% to £177.9m, while underlying operating profit declined 11.5% to £125.8m. Revenue was down 10% to £1.5bn and underlying earnings per share slid to 25.3p from 30.7p in 2018.

Underlying pre-tax profit fell 14% to £116.2m, with depreciation and interest costs up 34% and 37% respectively as a result of the company’s recent investment in growth capacity and IFRS 16 leases accounting. IFRS pre-tax profit was down 16.5% to £100.5m.

Synthomer said growth in Functional Solutions, Industrial Specialities and the Performance Elastomers NBR markets helped to offset a shortfall in the Performance Elastomers SBR markets, where European paper was particularly weak.

Chairman Neil Johnson said: "Despite 2019 being a challenging year for the global chemical industry, Synthomer delivered a resilient performance. Whilst Performance Elastomers SBR Latex markets declined driven largely by a difficult European paper sector, Performance Elastomers NBR markets, Functional Solutions and Industrial Specialities all performed in-line with or above 2018 levels.

"In the year ahead, we are not anticipating any change to the economic environment, with industrial end markets remaining challenging and additional uncertainty relating to the potential impact of Coronavirus."

At 1000 GMT, the shares were down 4.5% at 261p.