Interim Management Statement

RNS Number : 0132G

Synthomer PLC

01 May 2014

 



1st May 2014

Synthomer plc

AGM and Interim Management Statement

Synthomer plc ("Synthomer" or "the Group") today issues its Interim Management Statement for the period 1 January to 30 April 2014.

Trading

We reported with our full year results in February that we had experienced slightly firmer demand in Europe across our Construction & Coatings, Functional Polymers and Performance Polymers segments. Encouragingly, this trend has continued, and as a result operating profit for the first quarter in our Europe and North America business (ENA) was ahead of the prior year, despite an adverse currency translation impact of £0.6M. 

In our Asia and Rest of the World (ARW) business, volumes have continued to progress.   However, recent substantial expansions by nitrile customers has led to excess glove capacity and aggressive competition between glove manufacturers.  Combined with falling Butadiene prices this has resulted in destocking and short term pressure on nitrile margins.  However, we expect on-going demand growth for nitrile latex and unit margins to firm as the year progresses.

The Group is currently developing plans for a further expansion of nitrile latex capacity, and expects to make an announcement in the next few months

Financial Position

Net debt increased over the first three months in line with normal seasonality. The Board has previously indicated it would move dividend cover to three times by 2015.  However, in the light of the Group's current low leverage, and strong underlying cash flow generation, the Board is reviewing that policy with a view to increasing the planned level of returns to shareholders. Any revised dividend policy will be formally communicated to shareholders with the interim results.

Outlook

Whilst the start to the year in Europe has been encouraging, we remain cautious until these trends become more sustained.  So far in 2014, Asia has performed below our expectations due to the competitive environment in the glove market. Although the overall Asia and ROW results may now be slightly weaker than our expectations at the start of the year, we believe the fundamental drivers for our business in the region remain strong.

The Board remains confident in the medium and long term outlook for the Group.

Synthomer will announce its Interim Results on Monday 11^th August 2014.

Enquiries:

Adrian Whitfield, Chief Executive Officer	Charles Armitstead / Rosie Oddy
David Blackwood, Chief Financial Officer	Pendomer Communications
Tel: [phone]	Tel: [phone]

The company will host a conference call for analysts at 8.00am (BST) today:

Dial-In: [phone] 

Please quote "Synthomer" to gain access to the call

 

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