Trading update

RNS Number : 0240M

Synthomer PLC

11 July 2014

 



11th July 2014                                                                     

Synthomer plc

Trading update

Synthomer plc ("Synthomer" or the "Group") today issues a trading update ahead of its interim results on 11^th August 2014.

The Group has continued to see similar trends to those seen during the first quarter of the year which it highlighted at the time of its Interim Management Statement on 1 May 2014.

In Europe and North America, trading has continued in line with the first quarter of the year and our expectations. Volumes were ahead of the prior year in our Construction & Coatings, Functional Polymers and Performance Polymers segments, whilst average cash margins in the second quarter have remained similar to the first three months of 2014.

In Asia and Rest of the World, the strong competition between glove manufacturers that we reported at the time of our Q1 IMS in May has continued. This has caused ongoing margin pressure in our Nitrile business, exacerbated by weak Butadiene pricing and a related period of customer de-stocking. This prolonged pressure means that operating profit for the first half of the year for Asia will be approximately £4m below our first half performance in 2013 (H1 2013: £11.5m).  However, as the second half progresses we continue to expect demand for nitrile latex to grow and unit margins to firm.

In addition, sterling strengthened further during the period. As a result, we now expect currency translation to have an adverse impact on full year operating profit of approximately £5m, an increase of £1m over our original expectations, assuming no further change to current rates.

The result of weaker margins in our nitrile business and adverse currency translation means that we now expect full year profit before tax to be broadly in-line with the level achieved in 2013.

Enquiries:

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