UPDATED: Croda is cheered by North American recovery

In the first half, Croda’s sales rose by 16.2 per cent, which the company said was driven by continued organic growth across all of its core business sectors.

Steve Foots, Croda’s chief executive, told The Yorkshire Post that good growth in the company’s Asian and European markets had been supported by a recovery in North America.

Croda has also shown its commitment to Yorkshire by announcing a £27m investment into its Hull plant, which will double capacity at the site. It now employs around 700 people in Yorkshire.

Snaith-based Croda makes high performance ingredients and technologies for some of the biggest brands in the world. The company creates, makes and sells speciality chemicals that are relied on by industries and consumers around the world.

The company’s adjusted profit before tax rose by 14.3 per cent to £169.7m over the six months ended June 30 2017.

Croda said it was continuing to display a “relentless focus” on innovation, with sales of new and protected products (NPP) increasing to almost £200m. This continued cash generation was supporting organic investment and was also leading to a strong balance sheet, Croda said.

Mr Foots added: “Our strategy delivered a good first half performance with all core business sectors growing sales and profit organically, highlighting Croda’s increased breadth across three growth sectors. It was encouraging to see growth coming from a broad base of both product and geography. Alongside an improved sales trend, we delivered adjusted operating profit growth of over 5 per cent in constant currency and over 15 per cent in reported currency.

“Our priorities for 2017 remain unchanged: to drive profitability through premium, faster growth niches; improve performance in less differentiated markets; and continue to grow margins in Life Sciences and Performance Technologies. We are confident of delivering continued progress through the remainder of 2017.”

Croda said the improving sales trend, which had been seen at the end of 2016, had continued through the first half of 2017. Sales grew by 16.2 per cent to £707.3m. Croda said that innovation, and targeting faster growth niches, continued to drive the good sales performance, with success in the first half year achieved in premium markets, including skin actives, high purity excipients and the company’s seed enhancement business, Incotec.

The company added: “It was encouraging to see a broader based recovery, with sales stabilised in Speciality ingredients in Personal Care and in our API contract in Health Care, together with growth in North America.”

The company said its robust financial platform was supporting growth and the creation of shareholder value.

CRODA’s Organic sales are now growing in its three largest regions, according to the latest half year results.

The company said that Asia and Europe continued to drive sales growth. Growth in North Asia, including China, remained particularly robust, Croda said.

Croda said it continues to deliver good cash generation and maintain a strong balance sheet with the flexibility for organic investment, acquisition and returns to shareholders.

In a note, analysts from JP Morgan Cazenove said: “The company expects continued progress in profitability through the remainder of 2017.”