Croda sees good growth

The Snaith-based company said sales were in line with expectations in July and August, but trading weakened in September, which is usually a strong month.

Croda also reported the sale of its Italian business based in Cremona to a private company in Italy for a consideration equivalent to the working capital value.

Completion is subject to a number of minor conditions but is expected to take place before the year end.

The business was acquired with Uniqema in 2006 and is focused on the manufacture of basic products for the Performance Technologies and Industrial Chemicals sectors.

Croda said group sales rose 3.2 per cent over the three months, despite depressed market conditions, particularly in Europe.

Including the adverse currency impact, continuing sales rose 0.5 per cent to £256.5m.

The group reported turnover decline in Europe, but experienced growth in all other major regions.

Volumes rose 8.9 per cent overall and the strongest growth came in lower value products in Performance Technologies and Industrial Chemicals, which were weak in the third quarter of 2011.

This meant that average selling prices fell by 5.7 per cent although Croda said it fully recovered raw material inflation.

Operating margins increased to 23.3 per cent. As a result, continuing operating profit increased by 4.7 per cent to £59.7m and continuing pre-tax profit increased 4.4 per cent to £59.3m.

Martin Flower, chairman of Croda said: “Quarter four has started well. However, with the market remaining weak, particularly in Europe, and currency headwinds, we expect a similar performance in quarter four to that seen in the third quarter.

“Looking further forward, the board remains confident that Croda has the right strategy for continued growth.”