Better margins and lower costs help to boost Croda profits

The Snaith-based company, which supplies chemicals to firms such as P&G, Unilever, L’Oreal and Estee Lauder, reported a pre-tax profit of £65.1m in the first quarter to March 31.

Revenue grew marginally to £283.1m from £281.9m last year.

Croda said the results were achieved against a particularly strong performance last year and despite the adverse impact of an earlier Easter this year.

Consumer care sales were stable at £158.4m, with a weaker performance from the crop care business due to the poor weather in a number of regions.

Personal care and health care sales were flat and performance technologies sales were also stable at £102.4m, with continuing weakness in lubricants being the major factor.

Industrial chemicals sales rose 10.4 per cent to £22.3m.

Profits and margins improved in all three divisions. Consumer care profits increased by 2.3 per cent to £49.2m, performance technologies profits rose by 1.9 per cent to £16.1m and industrial chemicals profits increased by 80 per cent to £2.7m as a result of strong sales and favourable commodity prices.

Interest costs decreased due to the reduced pension fund deficit, helping to achieve the 6.5 per cent increase in pre-tax profits.

Croda said its first quarter results represents a solid start to the year and it expects to report further progress.

Analyst Adam Collins, at Liberum Capital, said: “We would expect little change to estimates following today – upside is possible on the cost side given recent softness in many oil based and natural commodities.”