Sterling’s strength knocks £12m off Croda’s profits

Chemical maker Croda International reported ​improving sales​ growth​ in a challenging environment​ in 2014​, ​as sterling’s strength knocked £12m off profits.
Crodas chief executive Steve FootsCrodas chief executive Steve Foots
Crodas chief executive Steve Foots

​The ​Snaith-based ​company, which counts L’Oreal, Unilever and Procter & Gamble among its​ ​biggest customers, has high hopes for a number of new products in 2015, led by its new acne treatment Sebuless which comes from the lilac plant.

Sebuless slows down sebum (oil secreted by the sebaceous glands) production​, thereby reducing acne.

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Croda’s chief executive Steve Foots said: “Sebuless will be formulated into acne treatment. It’s in the early stages.

“All the big companies are looking into it. We expect it to be branded into big name products.”

Croda has made a name for itself producing wonder treatments from natural chemicals derived from plants, many from far-flung parts of the world, rather than man-made chemicals.

​It also has high hopes for a new, high purity Omega 3 ​product that boosts heart health and a new product for air fresheners that controls the fragrance release.

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While Western Europe has ​been in the doldrums, Croda is seeing strong growth in Asia and an improving performance in North and Latin America as consumer confidence picks up.

“The stand out performance is Asia, which is up 11 per cent,” said Mr Foots. “We’ve expanded research and development, expanded in India and we’ve got a manufacturing footprint in China for the first time. Croda has traditionally been in Europe and America, but the fastest growth is coming from these new regions.”

The strength of the pound contributed to a six per cent decline in annual adjusted pre-tax profit, which fell to £235m in the 12 months to December 31. Profit fell 1.7 per cent excluding sterling’s increase in value.

“The worst is over. A lot of it was about the exchange rate headwind,” said Mr Foots.

“The good thing is we’re through the anniversary (of sterling’s rise against the euro) so we shouldn’t have that £12m headwind through the next 12 months.”

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