'Delivering on our plan': Croda shares rise as Yorkshire chemicals firm reports higher-than-expected profits
Shares in speciality chemicals firm Croda have risen after the Goole-based company reported better-than-expected profits and set out new growth plans.
The business has posted an adjusted profit before tax for 2025 of £276.2m – above market expectations of £267.8m and higher than the £260m figure recorded for 2024.
Croda also announced a new three-year financial framework projecting annual sales growth of between three and six per cent, along with increased profitability, higher cashflows and an improved return on invested capital.
Shares in the company were up almost five per cent in early Tuesday trading following the announcement of the results and the financial framework.
Revenue was up by 4.4 per cent on 2024 as it increased from £1,628m to £1,699m, with EBITDA rising by 4.8 per cent to £396m.
Steve Foots, Chief Executive Officer, said he was pleased with the company’s progress and confident about the future strategy.
"I am encouraged by the early progress we have made in 2025 delivering on our plan to grow earnings and improve returns in an uncertain trading environment,” he said. "Our differentiated business model and higher-growth portfolio have underpinned progress with Consumer Care and Life Sciences both growing sales, adjusted margins and profits.
"Our efforts to drive more consistent growth and transform the business are beginning to deliver results and whilst there is much more to do, our confidence in realising further improvements in performance is highlighted by the three-year financial framework we have set out today."
He added: “In an uncertain trading environment, group sales were up 7 per cent at constant currency.
"Although margins are still significantly below their medium-term potential, they improved in both key businesses, contributing to an 8 per cent increase in group adjusted operating profit.
"Whilst free cash flow (post exceptionals) of £161.6m was £8m lower than the (restated) prior year, it improved in the second half year due to lower working capital and capex, with the debt leverage ratio falling. The board is proposing a one pence per share increase to the full year dividend to 111p.
"Consumer Care and Life Sciences grew sales, adjusted operating margins and profits, with sales up 8 per cent in both businesses at constant currency.
"In Consumer Care, Fragrances and Flavours (F&F) continues to outperform peers, and growth in Beauty was supported by more robust consumer sentiment in North America in the second half year. In Life Sciences, Crop Protection benefited from a recovery in demand from larger customers following an extended period of destocking, and Pharma delivered its strongest performance of the year in the final quarter despite the US regulatory environment continuing to create uncertainty for our customers.
“We are driving growth and transforming the Business to deliver consistent sales growth, enhanced profitability and increased cashflows.”