Interim Results

CRODA INTERNATIONAL PLC
3 August 1999

                                   
                        Croda International Plc
 
Croda International today announces results for the six months to 30
June 1999.
 
Highlights
 
                                  1999          1998      Change
                               £185.0m       £178.3m        + 4%
Turnover from continuing                                        
operations
Pre-tax profit from           £  19.8m      £  18.3m        + 8%
continuing operations                                           
Earnings per share (pre-          9.7p          8.7p       + 11%
exceptionals)
Dividend per share               3.65p         3.55p        + 3%
 
- Oleochemicals' profits up 8% on sales up 7%
 
- Oleochemicals' margins up to 16.2%
 
- Oleochemicals now 70% of Group sales and over 80% of trading profit
 
- Rationalisation continues with withdrawal from the textile pigments
and dyes market
 
  
Commenting on the results, Chairman Keith Hopkins, said:
 
'The growth in sales and profits we reported for the first quarter was
maintained in the second quarter.  Current levels of demand indicate
the second six months will see volumes ahead of the same period last
year.  Raw material prices remain subdued and we expect the year to
have a satisfactory outcome.'
 
 
Contacts:
 
Mike Humphrey, Chief Executive   Tel: [phone] morning
                                      0385 307786   afternoon
                                 
Barbara Richmond, Group Finance  Tel: [phone] morning
Director                         
                                      0467 252627   afternoon
                                                
Charles Watson, Financial        Tel: [phone]
Dynamics                         
                                                
or visit our web site at                        
www.croda.co.uk
 
 
Chairman's Statement
 
Profits before taxation and exceptional items were 8.7% higher in the
first six months at £19.1m compared with £17.6m last year.  The growth
in sales and profits that we reported earlier in the year was
maintained in the second quarter.  In continuing operations volumes
were up 3% and sales turnover was 4% higher than last year.  An
increased proportion of new products led to rather better margins.
 
With a slightly lower tax charge, earnings per share before exceptional
items were 11.5% higher at 9.7p (1998 8.7p).  The Board has declared an
increased interim dividend of 3.65p (1998 3.55p) which will be paid to
ordinary shareholders on 7 January 2000.
 
Trading
 
Operating profits in Oleochemicals were 8% higher on sales 7% up on
last year.  Westbrook Lanolin, which was acquired last August, made a
welcome contribution to these results.  Operating margins in
Oleochemicals at 16.2% were well up on those seen during the second
half of last year, helped by a better sales mix and weak vegetable oil
raw material prices.  The combination of Sederma, Westbrook and the
original Croda product range has been warmly welcomed by our customers
and has led to strong growth in sales of skin care ingredients.
 
Sales in South East Asia rose significantly as we benefited from the
continuity of support given to customers during the financial crises in
the region.  Sales in Japan recovered well in the second quarter and
prospects in the personal care industry are particularly encouraging.
Sales in the Americas were strong and overall in Oleochemicals
underlying volumes were up 5% on last year.
 
In the first six months Industrial Chemicals' sales were 2% lower than
last year and operating profits fell 13%, though we saw some recovery
from the depressed levels of demand seen in the second half of 1998.
Although we continued to grow our export business, sales to UK
manufacturing industry were particularly poor.
 
 
Corporate Development
 
We continued our strategy of focussing on speciality chemicals and
announced in June our withdrawal from the desperately depressed dyes
and pigments sector.  The total cost of this closure is £5.5m and is
treated as an exceptional item in these accounts.
 
We mentioned in our annual report that we intended to restructure a
number of operations to improve efficiency and to optimise future
capacity and capital expenditure.  The detailed plans are now being
finalised with the target of completion of the rationalisation by the
end of next year.  The revenue cost will be just over £8m but will
generate savings of about £5m per annum.
 
 
Finance
 
In the first six months we spent £13.9m on capital expenditure (1998
£14.6m).  Most of the spend was at Rawcliffe Bridge in the UK and in
Singapore.  The new ethoxylation plant at Rawcliffe is now on stream
and reaching rates close to its design capacity.  The major expansion
of our manufacturing operations in Singapore is on plan.  This plant is
due to start commissioning this September and so the strong growth in
our Far East sales is particularly welcome.
 
As 70% of our debt is at variable rates, we have benefited from lower
UK interest rates.  Combined with better trading results this has
increased our interest cover to over six times with gearing at 76%.
 
 
Year 2000
 
As we had planned, with two minor exceptions, our businesses now have
operational millennium compliance.  We continue to work with our
suppliers to try to ensure that they will also be compliant but a
number will not give guarantees in this respect and where practicable
contingency plans are being put in place.
 
 
Outlook
 
We continue to see better levels of demand for the remaining six months
of this year than we saw last year.  Raw material prices remain subdued
and the rationalisation plan being put in place will improve our
competitiveness.  We continue to thrive through the launch of new
products with higher margins and, although the run up to the new
millennium will no doubt produce new challenges, we expect the year to
have a satisfactory outcome.
 

Croda International Plc, Results for the six months ended 30 June 1999

Group Profit and Loss account
 
                                             1999     1998    1998
                       Before  Exception    First    First    Year
                    Exception   al Items     Half     Half
                     al Items               total
                                                           
Unaudited £m                                               
                                                           
Turnover                                                   
Continuing              185.0          -    185.0    178.3   349.8
operations
Discontinued              1.9          -      1.9     19.2    25.5
operations
                        _____      _____    _____    _____   _____
                                                                  
                        186.9          -    186.9    197.5   375.3
                        _____      _____    _____    _____   _____
                                                                  
Operating profit                                                  
Continuing               23.5          -     23.5     22.5    42.2
operations
Discontinued            (0.7)          -    (0.7)    (0.7)   (2.2)
operations
                        _____      _____    _____    _____   _____
                                                                  
                         22.8          -     22.8     21.8    40.0
Exceptional items           -      (5.5)    (5.5)    (9.9)  (18.0)
Net interest            (3.7)          -    (3.7)    (4.2)   (8.0)
payable
                        _____      _____    _____    _____   _____
                                                                  
Profit before            19.1      (5.5)     13.6      7.7    14.0
taxation
UK taxation             _____      _____    (2.0)    (1.7)   (3.3)
Overseas taxation                           (4.0)    (3.9)   (6.9)
Tax on exceptional                            0.4    (0.9)   (0.9)
items
                                            _____    _____   _____
                                                                  
Profit after                                  8.0      1.2     2.9
taxation
Minority interests                                                
and preference                              (0.2)    (0.2)   (0.4)
dividends
                                            _____    _____   _____
                                                                  
Profit                                                            
attributable to                               7.8      1.0     2.5
ordinary
shareholders
Ordinary dividends                          (4.9)    (4.8)  (14.0)
                                            _____    _____   _____
                                                                  
Reserves transfer                             2.9    (3.8)  (11.5)
                                            _____    _____   _____
 
 
 
Earnings per share of      1999 First   1998 First       1998
10p                              Half      Half          Year
                            pence per   pence per       pence
                                share         share       per
                                                        share
                                                             
Basic                             5.9           0.7       1.8
Basic before exceptional          9.7           8.7      15.7
items
                                                             
Fully diluted                     5.9           0.7       1.8
Fully diluted before              9.7           8.7      15.7
exceptional items
                                                             
Ordinary dividends                                           
                                                             
Interim                          3.65          3.55      3.55
Second interim                                           6.80
                                                             
 
              Segmental analysis of continuing operations
                                   
Unaudited £m                 1999          1998          1998
                       First half    First half          Year
                                                       
Turnover                                                     
Oleochemicals               128.5         120.5         235.7
Industrial Chemicals         56.5          57.8         114.1
                            _____         _____         _____
                                                             
                            185.0         178.3         349.8
                            _____         _____         _____
                                                             
Trading profit                                               
Oleochemicals                20.8          19.2          35.9
Industrial Chemicals          4.6           5.3          10.2
                            _____         _____         _____
                                                             
                             25.4          24.5          46.1
Central costs               (1.9)         (2.0)         (3.9)
                            _____         _____         _____
                                                             
                             23.5          22.5          42.2
                            _____         _____         _____
                                                             
Turnover by                                                  
geographical
destination
United Kingdom               46.4          50.5          99.1
Rest of Europe               52.3          51.4          97.9
Americas                     54.8          48.2          96.0
Asia                         18.3          14.0          28.7
Rest of World                13.2          14.2          28.1
                            _____         _____         _____
                                                             
                            185.0         178.3         349.8
                            _____         _____         _____
                                   
                                   
                         Summarised cash flow
 
Unaudited £m                       1999      1998      1998
                                  First     First      Year
                                   half      half
                                                           
Operating profit                   22.8      21.8      40.0
Depreciation and amortisation       9.6       9.3      18.4
Working capital                   (6.3)     (0.8)       2.1
Other                             (1.6)     (1.9)     (4.1)
                                  _____     _____     _____
                                                           
Operating cash flow                24.5      28.4      56.4
                                                           
Interest                          (3.6)     (4.2)     (7.8)
Dividends                         (9.2)     (0.2)    (14.4)
Taxation                          (5.1)     (3.8)    (10.5)
Fixed assets purchased           (13.9)    (14.6)    (31.1)
Purchase of own shares            (4.6)         -     (2.7)
Acquisitions                          -     (0.9)    (11.7)
Disposals                             -      30.0      32.2
Other                             (0.5)       1.2       3.3
                                  _____     _____     _____
                                                           
Movement in net debt from cash   (12.4)      35.9      13.7
flows
New finance lease contracts           -         -     (0.2)
Exchange differences              (0.7)       0.5         -
                                  _____     _____     _____
                                                           
Movement in net debt             (13.1)      36.4      13.5
                                  _____     _____     _____
 
                                   
                                   
                       Summarised balance sheet
                                   
Unaudited £m             At 30 June    At 30 June     At 31 Dec
                               1999          1998          1998
                                                               
Fixed assets                  192.2         166.4         184.7
Stock                          60.9          61.9          62.5
Debtors                       114.1         111.4         106.0
Creditors and                (88.8)        (98.3)        (89.9)
provisions
                              _____         _____         _____
                                                               
                              278.4         241.4         263.3
                              _____         _____         _____
                                                               
Shareholders' funds           156.6         156.0         154.8
Minority interests              1.3           0.9           1.1
                              _____         _____         _____
                                                               
                              157.9         156.9         155.9
Net debt                      120.5          84.5         107.4
                              _____         _____         _____
                                                               
                              278.4         241.4         263.3
                              _____         _____         _____
                                   
                                   
 
                    Movement in shareholders' funds
                                   
Unaudited £m                          1999      1998      1998
                                     First     First      Year
                                      half      half
                                                              
Profit attributable to ordinary        7.8       1.0       2.5
shareholders
Ordinary dividends                   (4.9)     (4.8)    (14.0)
New share capital issued                 -       1.5       1.5
Goodwill written back                  0.4       9.1      13.8
Currency translation differences     (1.5)     (2.5)     (0.7)
                                     _____     _____     _____
                                                              
Net addition to shareholders'          1.8       4.3       3.1
funds
Opening shareholders' funds          154.8     151.7     151.7
                                     _____     _____     _____
                                                              
Closing shareholders' funds          156.6     156.0     154.8
                                     _____     _____     _____
 
Note
 
With the exception of the prior year adjustment explained in note 2
there have been no recognised gains or losses, other than those
detailed above, since 31 December 1998.
 
                                   
                           Exceptional items
                                   
                                   
Unaudited £m                        1999      1998      1998
                                   First     First      Year
                                    half      half
                                                            
Loss on discontinuance of                                   
operations
Loss on discontinuance               5.1       0.8       4.2
Goodwill written back                0.4       9.1      13.8
                                   _____     _____     _____
                                                            
                                     5.5       9.9      18.0
                                   _____     _____     _____
                                   
 
Notes to the interim statement:
 
 
1.   The  interim dividend of 3.65p will be paid on 7 January  2000  to
shareholders registered on 3 December 1999.
 
2.  The interim financial information has been prepared on the basis of
the  accounting policies set out in the Group's 1998 statutory accounts
with the exception of the change in accounting policy for environmental
liabilities  arising from the required adoption of Financial  Reporting
Standard  12.   The  previous  policy  of  the  Group  was  to  expense
environmental costs on operational sites as incurred unless either  the
site  ceased  operation,  or the obligation  was  probable,  accurately
quantifiable  and material to the financial position of  the  Group  at
which  point provision would be made.  FRS 12 requires provision to  be
made immediately where a constructive or legal obligation is identified
and  can be quantified.  This change in accounting policy results in  a
prior year adjustment, reducing shareholders funds at 1 January 1998 by
£9 million and increasing provisions by a corresponding amount.
 
3.   Financial information relating to the year to 31 December 1998 has
been  abridged.  Full accounts for that year, on which the Auditors  of
the  Company  made  an unqualified report, have been delivered  to  the
Registrar of Companies.  Comparative figures have been restated,  where
appropriate, to reflect the adoption of FRS 12.
 
4.   This  statement  has  been sent to all  shareholders  and  can  be
obtained  by  the public from the Company's registered  office,  Cowick
Hall, Snaith, Goole, East Yorkshire DN14 9AA.
 
Notes to the interim statement:
 
  
1.   The interim dividend of 3.65p will be paid on 7 January 2000 to
     shareholders registered on 3 December 1999.
 
2.   The interim financial information has been prepared on the basis
     of the accounting policies set out in the Group's 1998 statutory
     accounts with the exception of the change in accounting policy for
     environmental liabilities arising from the required adoption of
     Financial Reporting Standard 12.  The previous policy of the Group was
     to expense environmental costs on operational sites as incurred unless
     either the site ceased operation, or the obligation was probable,
     accurately quantifiable and material to the financial position of the
     Group at which point provision would be made.  FRS 12 requires
     provision to be made immediately where a constructive or legal
     obligation is identified and can be quantified.  This change in
     accounting policy results in a prior year adjustment, reducing
     shareholders funds at 1 January 1998 by £9 million and increasing
     provisions by a corresponding amount.
 
3.   Financial information relating to the year to 31 December 1998 has
     been abridged.  Full accounts for that year, on which the Auditors of
     the Company made an unqualified report, have been delivered to the
     Registrar of Companies.  Comparative figures have been restated, where
     appropriate, to reflect the adoption of FRS 12.
 
4.   This statement has been sent to all shareholders and can be
     obtained by the public from the Company's registered office, Cowick
     Hall, Snaith, Goole, East Yorkshire DN14 9AA.