The manufacturer of speciality chemicals said it expects underlying growth across all of its sectors to continue in the second half year, driven by consumer demand, although the customer restocking seen in the first half is expected to moderate.
Full year adjusted profit before tax is tipped to be significantly ahead of current expectations, Croda said, thanks partly to the 2020 acquisition of Avanti working out better than expected.
Sales in the first half of 2021 shot up 38% to GBP934mln from GBP672.9mln the year before, helped by demand for lipid systems used in vaccines and therapeutics drugs.
Croda said demand for COVID-19 solution ingredients remains uncertain beyond the short term and the current level of sales could moderate; however, it expects to see an ongoing expansion in the range of applications for lipid systems in vaccines and therapeutic drugs over the medium term.
Profit before tax surged 40.9% to GBP204.1mln from GBP144.9mln; adjusted profit before tax, which excludes what the group regards as exceptional items, jumped 59.5% to GBP229.5mln from GBP152.5mln.
The scale-up of Avanti’s technology platform within Croda saw lipid system sales exceed US$100m, with its principal COVID-19 vaccine contract supplemented by additional drug and vaccine applications, albeit at smaller scale.
Croda is now working on more than 100 COVID-19 projects in 20 countries across its three patient health platforms and expects lipid systems sales to top US$200mln this year.
The interim dividend has been hiked by 10% to 43.5p from 39.5p last year.
Our half year results, announced this morning, show a record first half performance for Croda. For more detailed information on our results and the opportunity to register for our live webcast taking place at 9am this morning, please click here: https://t.co/50FZ5Fwyxo pic.twitter.com/wVqd2C37Da
— Croda International (@CrodaPlc) July 27, 2021
“Our record first-half performance reflects the impact of our strategic acceleration and investments, supported by improving customer demand across all regions and sectors. This has been delivered through excellent growth in our existing businesses, successful delivery from our recent acquisitions and continued success in building our Life Sciences platform. With the strategic review of our Performance Technologies business well underway, we continue our transition to becoming a pure-play consumer-facing ingredients company,” said Steve Foots, Croda’s chief executive officer.
“I am excited by Croda’s increasing opportunities in emerging technology platforms and faster growth markets, where demand for sustainable solutions will drive our progress going forward. We are investing in organic and inorganic expansion, continuing our relentless innovation and focusing on sustainability across everything we do. This is creating new avenues for future growth, delivering significant value for our shareholders,” he added.