Croda results show strong growth on the back of skin care sales
and profits for the first six months of the year, driven primarily
by demand for skin care ingredients, reports Simon Pitman.
Total sales turnover from continuing operations was reported to have risen by 8.4 per cent on the corresponding six months of 2004, up from £146.5 million to £158.9 million. Although profit before tax rose by 15 per cent to reach $25.8 million, the company's tax bill, which included payments on debt, meant that net profit after all expenses was up from £15.2 million to $16.8, a rise of 11 per cent.
After reporting a strong performance in the first quarter, chairman Anthony Beevor said that demand had continued to be good in the second quarter. In particular he pointed to the strong performance in the Consumer Care segment, which currently accounts for around 75 per cent of the total business.
Breaking this figure down further, Beevor stated that growth in the skin care market had been a particular strong point for the company, reflecting the continued strong global demand for ingredients in this category. Currently around 61 per cent of the company's total sales are attributed to personal care and health products.
In total sales for the consumer care segment, which comprises the personal, health and homecare segments, were up 11. 7 per cent on total volumes that rose 11 per cent, on the previous year.
Croda offers a range of raw materials to the personal care market. It supplies a range ingredients, including natural oils and multi-functional emollients, to major players such as Proctor & Gamble and Estee Lauder.
On a geographical basis, the figures reflected the company's continued strong growth outside of its core European market. Sales in the Americas have proved to be particularly strong, with figures up by 16 per cent in North America and 35 per cent in South America.
The company also reported that sales in continental Europe were up by 35 per cent.
Asia was the one exception to the strong global performance, with growth reported to be at a slower rate compared to last year. Although the China market continued to perform well, other leading markets such as Indonesia were described as flat.
Net debt was almost the same as the previous year, at £20.8 million, but interest payment was trimmed back from £1.8 million to £1.5 million due to an improved cash flow.
Looking ahead to the full year, the company says that new product launches planned for the second half of the year lead it to believe that the progress will be sustained for the full year.
Beevor also confirmed that he will be retiring from the company at the end of September, when he will be handing over his position to Martin Flower, who is currently a non-executive director at the company.