April 30th 2015
Synthomer plc
Quarter 1 trading update
Synthomer plc ('Synthomer' or 'the Group') today issues a trading update for the first quarter ended March 31 2015.
Trading
Trading in the first quarter has been in line with the Board's expectations at the time of the full year 2014 results.
In our European and North American (ENA) business, volumes were slightly below the same period in 2014, where we experienced a good start to the year. We saw some modest margin benefit from declining raw material prices, and constant currency operating profit was slightly ahead of the prior year but behind on a reported basis, due to the weakness of the Euro.
We reported with our full year 2014 results that unit margins in our Asian nitrile business had firmed through the second half and demand had strengthened through the fourth quarter. Demand has remained strong through the first quarter of 2015 and we have seen a further improvement in margins. Consequently, our operating profit in our Asia and Rest of the World (ARW) segment was substantially ahead of the prior year.
The Group is currently developing plans for a further expansion of its nitrile latex capacity, and expects to make an announcement in the next few months.
Financial Position
Capital expenditure was low in the quarter, and the seasonal outflow of working capital was lower than usual, due to the impact of falling input costs. Together with the translation effect on euro denominated debt, this resulted in a reduction of net debt from the year end to below £100 million (December 2014 £112M million).
The Board announced at the time of the full year 2014 results that in line with its capital management policy, a special dividend of 7.8p per share, equivalent to £26.5 million which will be paid in July, along with the normal final dividend from 2014 of 4.8p per share.
Outlook
Europe is expected to remain challenging due to both the general economic environment and ongoing currency effects. In Asia we expect to continue to perform strongly due to the current demand and margin trends in nitrile. The Board remains confident in the medium and long term growth prospects for the Group.
Synthomer will announce its Interim Results on Tuesday 11th August 2015.
Enquiries:
Calum MacLean, Chief Executive Officer |
Charles Armitstead |
David Blackwood, Chief Financial Officer |
Pendomer |
Tel: 01279 775220 |
Tel: 020 3603 5220 |
The Company will host a conference call for analysts at 8.00am (BST) today:
Dial-In: +44 (0)203 427 0662
Please quote "Synthomer" to gain access to the call
