Interim Results

Croda International PLC
26 July 2006


26 July 2006


                            CRODA INTERNATIONAL PLC

                     Interim results announcement June 2006

Highlights

                                                                      2006               2005
Sales for continuing operations                                    £164.5m            £154.5m        +  6.5%
Pre-tax profit for continuing operations                            £27.9m             £25.1m        + 11.2%
Earnings per share for continuing operations                         14.7p              12.5p        + 17.6%
Dividend per share                                                   4.65p              4.35p        +  6.9%



  • Pre-tax profits up 11.2% to £27.9m
  • Group sales up 6.5% to £164.5m
      o    Consumer Care sales up 8.2%
  • Earnings per share up 17.6%
  • 4.65p interim dividend, up 6.9%
  • £32.4m returned to shareholders:
      o    £21.5m treasury stock buyback
      o    £10.9m final dividend paid
  • Acquisition of Uniqema announced



Commenting on the results, Chairman, Martin Flower, said:

'This was a strong performance in spite of the headwinds of higher input costs,
particularly energy.  Pre-tax profits on continuing operations were up over 11%
on sales up 6.5%, including 2.5% from currency translation.  We were pleased to 
announce the acquisition of Uniqema from ICI PLC on 29 June.  This transforming 
acquisition gives Croda a great opportunity to further enhance shareholder 
value.'


For further information, please contact:

Mike Humphrey, Group Chief Executive                       Tel:   [phone]

Sean Christie, Group Finance Director                      Tel:   [phone]

Charlie Watenphul or Andrew Dowler, Financial Dynamics     Tel:   [phone]



Or visit our web site at:  www.croda.com where the presentation to analysts will
be available by midday today




Chairman's Statement

I am pleased to report a strong set of results for the first half of 2006.
Overall pre-tax profits on continuing operations for the period were up 11.2% at
£27.9m, compared to £25.1m for the same period last year, on sales up 6.5%.  I
am also delighted that Croda has reached agreement to acquire the Uniqema
business from ICI PLC.  The deal is expected to complete in early September.

In line with the Group's stated objective to dispose of non-core activities,
Croda sold its metal treatments division to Shell UK Limited for an initial
consideration of £3.9m.

Continuing earnings per share increased 17.6% to 14.7p (2005 12.5p) and as a
result, the Board has declared an interim dividend of 4.65p, 6.9% higher than
last year.

Trading

The first quarter profit uplift reported at the AGM continued in the second
quarter, resulting in continuing pre-tax profits up 11.2% for the half versus
the previous year.  In the second quarter, improved margins versus last year
compensated for fewer working days. We continued to focus on high margin, high
added value products, reducing the level of toll processing and technical oil
trading at Seatons.  In Consumer Care, sales were buoyant with all regions
making progress versus the previous year.  Currency translation added around
2.5% to the sales increase, partially compensating for higher input costs,
particularly energy.

Finance

We continued to buyback shares in the market.  In the first quarter, 4.3m shares
were purchased at a cost of £21.5m, taking the total purchased to 12.5m shares
at a cost of £52.4m since the programme began in December 2004.

The tax rate was slightly lower than last year, representing the relative
trading in the various tax regimes in which Croda operates.

Net debt at the end of June was £39.1m, with strong underlying cash generation
before the £32.4m returned to shareholders via the share buyback and 2005 final
dividend payment in June.

Outlook

Firm demand continues in our core markets and we remain confident of further
progress for the rest of 2006.  We look forward to integrating Uniqema, creating
a new platform for growth.


Croda International Plc
Results for the six months ended 30 June 2006

Condensed Group income statement


                                      Note             2006                 2005                    2005
                                                      First                First                    Full
Unaudited £m                                           Half                 Half                    Year

Continuing operations
Revenue                                  2            164.5                154.5                   305.6

Cost of sales                                       (113.3)              (106.5)                 (214.5)
                                                     ______               ______                  ______
Gross profit                                           51.2                 48.0                    91.1

Operating expenses                                   (23.4)               (22.1)                  (40.0)
                                                     ______               ______                  ______

Operating profit                         2             27.8                 25.9                    51.1

Net financial income                     3              0.1                (0.8)                   (1.9)
                                                     ______               ______                  ______

Profit before tax                                      27.9                 25.1                    49.2

Tax                                                   (9.9)                (9.0)                  (17.6)
                                                     ______               ______                  ______
Profit after tax from
continuing operations                                  18.0                 16.1                    31.6

Profit after tax from
discontinued operations                  5              0.9                  0.7                     1.2
                                                     ______               ______                  ______
Profit for the period                                  18.9                 16.8                    32.8
                                                      _____                _____                   _____

Attributable to:

Minority interest                                         -                    -                     0.1
Equity shareholders                                    18.9                 16.8                    32.7
                                                       ____                _____                    ____
                                                       18.9                 16.8                    32.8
                                                      _____                _____                   _____


                                                  pence per            pence per               pence per
                                                      share                share                   share
Earnings per share of 10p

Basic
Total                                                  15.4                 13.0                    25.6
Continuing operations                                  14.7                 12.5                    24.7

Diluted
Total                                                  15.2                 13.0                    25.2
Continuing operations                                  14.5                 12.5                    24.3

Ordinary dividends
Interim                                                4.65                 4.35                    4.35
Final                                                                                               9.00



Condensed Group statement of recognised income and expense

                                                          2006                2005                     2005
                                                         First               First                     Full
Unaudited £m                                              Half                Half                     Year

Profit attributable to equity shareholders                18.9                16.8                     32.7
Exchange differences                                     (2.4)                 1.6                      4.7
Actuarial movement on retirement benefit
    liabilities (net of deferred tax)                     14.5                   -                    (3.8)
                                                        ______              ______                   ______
Total recognised income attributable to
    equity shareholders                                   31.0                18.4                     33.6
                                                        ______              ______                   ______


Condensed Group balance sheet

                                                                 At                 At                   At
Unaudited £m                                                30 June            30 June          31 December
                                           Note                2006               2005                 2005
Assets
Non-current assets
Goodwill                                                        6.5                6.5                  6.5
Property, plant and equipment                                 119.8              126.2                122.4
Investments                                                     0.8               11.1                  1.4
Deferred tax assets                                            28.4               33.8                 36.0
                                                           ________             ______               ______
                                                              155.5              177.6                166.3
                                                           ________             ______               ______

Current assets
Inventories                                                    55.3               55.9                 53.4
Trade and other receivables                                    62.1               64.3                 55.7
Cash and cash equivalents                     6                23.5               36.2                 39.3
Other financial assets                                            -                0.3                  0.1
Assets classified as held for sale            5                10.3                  -                 15.4
                                                             ______             ______               ______
                                                              151.2              156.7                163.9
                                                            _______             ______               ______

Liabilities
Current liabilities
Trade and other payables                                     (48.3)             (66.6)               (46.6)
Borrowings and other financial
   liabilities                                6              (34.7)             (36.0)               (24.2)

Current tax liabilities                                       (5.0)              (4.4)                (5.5)
                                                            _______             ______               ______
                                                             (88.0)            (107.0)               (76.3)
                                                            _______             ______               ______
Net current assets                                             63.2               49.7                 87.6
                                                             ______             ______               ______
Non-current liabilities
Borrowings and other financial
   liabilities                                6              (27.9)             (21.3)               (39.4)
Other payables                                                (0.8)              (0.7)                (1.0)
Retirement benefit liabilities                               (82.3)            (102.5)              (107.1)
Provisions                                                    (9.6)              (8.6)                (9.6)
Deferred tax liabilities                                     (16.4)             (15.4)               (16.2)
                                                             ______             ______               ______
                                                            (137.0)            (148.5)              (173.3)
                                                             ______             ______               ______

Net assets                                                     81.7               78.8                 80.6
                                                             ______             ______               ______

Shareholders' equity                                           81.5               77.9                 79.7
Minority interest in equity                                     0.2                0.9                  0.9
                                                            _______             ______               ______

Total equity                                                   81.7               78.8                 80.6
                                                             ______             ______               ______



Condensed Group cash flow statement


                                                          Note         2006          2005            2005
Unaudited £m                                                          First         First            Full
                                                                       Half          Half            Year
Cash flows from operating activities
Continuing operations
Operating profit                                                       27.8          25.9            51.1
Adjustments for:
  Depreciation and loss on disposal of fixed assets                     7.0           7.0            14.0
  Changes in working capital                                          (7.9)         (3.9)             3.4
  Pension fund contributions in excess of service
  cost                                                                (0.5)         (1.4)           (2.8)
  Share based payments                                                  0.5           0.4             0.7
                                                                     ______        ______          ______
Cash generated from continuing operations                              26.9          28.0            66.4
Discontinued operations                                                 0.2           0.8             1.2
Interest paid                                                         (1.7)         (1.5)           (3.7)
Tax paid                                                             (10.1)         (9.1)          (15.9)
                                                                     ______        ______          ______
Net cash generated from operating activities                           15.3          18.2            48.0
                                                                     ______        ______          ______
Cash flows from investing activities
Purchases of property, plant and equipment                            (6.0)         (4.1)           (9.1)
Proceeds from sale of property, plant and equipment                     0.9           0.2             1.4
Proceeds from sale of investments                                       0.5             -               -
Proceeds from sale of businesses (net of costs)                         3.4             -               -
Cash paid against provisions                                              -         (5.0)           (5.2)
Interest received                                                       0.4           0.5             1.3
                                                                     ______        ______          ______
Net cash used in investing activities                                 (0.8)         (8.4)          (11.6)
                                                                     ______        ______          ______
Cash flows from financing activities
Additional borrowings                                                     -           4.8            15.0
Repayment of borrowings                                              (10.5)             -           (0.6)
Net purchases of own shares                                          (18.8)         (8.9)          (21.8)
Dividends paid                                               4       (11.6)         (5.4)          (21.7)
Other                                                                   0.3             -           (0.1)
                                                                     ______        ______          ______
Net cash used in financing activities                                (40.6)         (9.5)          (29.2)
                                                                     ______        ______          ______

Net movement in cash and cash equivalents                    9       (26.1)           0.3             7.2
Cash and cash equivalents brought forward                              26.4          17.5            17.5
Exchange differences                                                  (0.9)           1.1             1.7
                                                                     ______        ______          ______
Cash and cash equivalents carried forward                             (0.6)          18.9            26.4
                                                                     ______        ______          ______

Cash and cash equivalents carried forward
  comprise
Cash at bank and in hand                                               23.5          36.2            39.3
Bank overdrafts                                                      (24.1)        (17.3)          (12.9)
                                                                     ______        ______          ______
                                                                      (0.6)          18.9            26.4
                                                                     ______        ______          ______


A reconciliation of the cash flows above to the movement in net debt is shown at
note 9.


Notes to the interim report

1. Basis of preparation

This interim financial report has been prepared under the historical cost
convention and in accordance with the accounting policies used in the Group's
financial statements for the year ended 31 December 2005.  The IFRS and
interpretations that will be applicable as at 31 December 2006, including those
that will be applicable on an optional basis, are not yet known with certainty
at the time of preparing this report.

The financial information included in this interim financial report for the six
months ended 30 June 2006 does not constitute statutory accounts as defined in
section 240 of the Companies Act 1985 and is unaudited.  The comparative
information for the six months ended 30 June 2005 is also unaudited.  The
comparative figures for the year ended 31 December 2005 have been extracted from
the Group's financial statements as filed with the Registrar of Companies, on
which the auditors gave an unqualified opinion and did not make a statement
under section 237 of the Companies Act 1985.

2. Segmental information

Primary reporting format - business segments

At 30 June 2006 the Group is organised on a worldwide basis into two main
business segments, relating to the manufacture and sale of the Group's products
which are destined for either the Consumer Care market or the market for
Industrial Specialities.


                                                             2006              2005                2005
                                                            First             First                Full
                                                             Half              Half                Year
                                                               £m                £m                  £m
Turnover - continuing operations
Consumer Care                                               113.5             104.9               207.8
Industrial Specialities                                      51.0              49.6                97.8
                                                            _____             _____               _____
                                                            164.5             154.5               305.6
                                                            _____             _____               _____

Operating profit - continuing

operations
Consumer Care                                                23.8              22.0                43.9
Industrial Specialities                                       4.0               3.9                 7.2
                                                            _____             _____               _____
                                                             27.8              25.9                51.1
                                                            _____             _____               _____


There are no sales between business segments and all operating costs of the
Group are allocated between the segments.

2. Segmental information (continued)

Secondary reporting format - geographical segments

The sales analysis in the table below is based on the location of the customer.

                                                             2006              2005                2005
                                                            First             First                Full
                                                             Half              Half                Year
                                                               £m                £m                  £m

Turnover by destination -
continuing operations
Europe                                                       71.0              69.0               131.7
Americas                                                     60.6              55.9               111.5
Asia                                                         22.3              20.2                42.3
Rest of World                                                10.6               9.4                20.1
                                                            _____             _____               _____
                                                            164.5             154.5               305.6
                                                            _____             _____               _____

3. Net financial income


Net bank interest payable                                   (1.3)             (1.0)               (2.3)
Expected return on pension scheme
assets less interest on scheme liabilities                    1.4               0.2                 0.4
                                                            _____             _____               _____
                                                              0.1             (0.8)               (1.9)
                                                            _____             _____               _____

4. Dividends paid

                                         Pence
                                     per share
Ordinary
2004 Interim - paid
January 2005                              4.10                   -                5.4                5.4
2004 Final - approved
April 2005, paid July 2005                8.40                   -                  -               10.7
2005 Interim - paid
October 2005                              4.35                   -                  -                5.5
2005 Final - paid June
2006                                      9.00                10.9                  -                  -
                                                             _____              _____              _____
                                                              10.9                5.4               21.6
Preference (paid June and
December)                                                        -                  -                0.1
Dividends paid to minority
shareholders                                                   0.7                  -                  -
                                                             _____              _____              _____
                                                              11.6                5.4               21.7
                                                             _____              _____              _____


An interim dividend in respect of 2006 of 4.65p per share, amounting to a total
dividend of £5.6m, was declared by the directors at their meeting on 25 July
2006.  This interim report does not reflect the 2006 interim dividend payable.
The dividend will be paid on 6 October 2006 to shareholders registered on 8
September 2006.

5. Discontinued operations

On 27 March 2006, in continuance of the Group's stated objective to dispose of
non-core activities, the Group's metal treatments division was sold to Shell UK
Limited for an initial consideration of £3.9m, with a further £0.8m payable a
year from the date of sale contingent upon the business achieving a
pre-determined level of profits.  The sale did not include the non-current
assets of the business, primarily land and buildings, however the Group has
received a valuation of the land and buildings which is significantly in excess
of their carrying value.  Accordingly, there has been no re-measurement to fair
value less costs to sell.  Under the terms of the sale agreement, following
completion the Group was committed to an initial three month period of toll
manufacture.  A subsequent agreement signed on 21 June 2006 extends the period
of manufacture for a maximum of a further six months. Once this period is
complete, the directors are confident that the valuation of the land and
buildings will be realised through their disposal.

In addition, during 2005, the Group, in conjunction with the company's majority
shareholder, commenced the process of selling its holding in the Group's sole
associate, Baxenden Chemicals Limited and at 30 June the process was continuing.
The Board remain committed to the disposal plan and consider it highly probable
that the disposal will have taken place within twelve months.  Accordingly, the
carrying value of the Group's investment in Baxenden (£10.3m) has been
categorised within current assets as 'assets classified as held for sale'. The
impact of discontinued operations on the income statement is as follows:

                                                             2006              2005                2005
                                                            First             First                Full
                                                             Half              Half                Year
                                                               £m                £m                  £m

Operating profit of discontinued
operations                                                    1.3               1.0                 1.9
Profit on disposal and closure of
discontinued operations                                         -                 -               (0.3)
Profit on disposal of fixed assets in
discontinued operations                                         -                 -                 0.3
Tax                                                         (0.4)             (0.3)               (0.7)
                                                            _____             _____               _____
                                                              0.9               0.7                 1.2
                                                            _____             _____               _____

6. Financial assets and liabilities

The Group manages its interest rate profile by use of an interest rate swap to
convert a proportion of its fixed rate debt to a floating rate.  Under IFRS, the
fair value of such derivative instruments must be recognised in the financial
statements with a corresponding fair value adjustment to the underlying loan
instrument. Accordingly, a financial liability of £0.1m (2005: £0.3m asset) has
been recognised within current liabilities, being the fair value of the interest
rate swap, and current and non-current financial liabilities include a debit
adjustment of £0.1m (2005: £0.1m credit) and £nil (2005: £0.2m credit)
respectively in recognition of the corresponding adjustment to the fair value of
the Group's fixed rate debt.

7. Condensed statement of changes in equity

                                                             2006              2005                2005
                                                            First             First                Full
                                                             Half              Half                Year
                                                               £m                £m                  £m

Opening shareholders' equity                                 79.7              88.8                88.8
Total recognised income                                      31.0              18.4                33.6
Dividends on equity shares                                 (10.9)            (16.2)              (21.7)
Transactions in own shares                                 (18.8)            (13.3)              (21.8)
Share based payments                                          0.5               0.2                 0.8
                                                            _____             _____               _____
Closing shareholders' equity                                 81.5              77.9                79.7
                                                            _____             _____               _____


8. Treasury shares

During the period covered by this interim report the Company purchased 4,335,000
shares on the open market to be held as treasury shares for a consideration of
£21.5m.  The Company now holds 12,457,589 shares in total as treasury shares.
These shares have been deducted from shareholders' equity and will be held until
such time as the Board decided to cancel, reissue or use them to satisfy share
options.

9. Reconciliation of movement in net debt

                                                              2006               2005                2005
                                                             First              First                Full
                                                              Half               Half                Year
                                                                £m                 £m                  £m

Net movement in cash and cash
equivalents                                                 (26.1)                0.3                 7.2
Movement in debt and lease financing                          10.2              (4.8)              (14.3)
                                                             _____              _____               _____
Change in net debt from cash flows                          (15.9)              (4.5)               (7.1)
New finance lease contracts                                      -                  -               (0.2)
Exchange differences                                           1.0              (1.1)               (1.7)
                                                             _____              _____               _____
                                                            (14.9)              (5.6)               (9.0)
Net debt brought forward                                    (24.2)             (15.2)              (15.2)
                                                             _____              _____               _____
Net debt carried forward                                    (39.1)             (20.8)              (24.2)
                                                             _____              _____               _____




10. Accounting estimates and judgements

The Group's critical accounting policies under IFRS have been set by management
with the approval of the Audit Committee.  The application of these policies
requires estimates and assumptions to be made concerning the future and
judgements to be made on the applicability of policies to particular situations.
Estimates and judgements are continually evaluated and are based on historical
experience and other factors, including expectations of future events that are
believed to be reasonable under the circumstances.

Under IFRS an estimate or judgement may be considered critical if it involves
matters that are highly uncertain, or where different estimation methods could
reasonably have been used, or if changes in the estimate that would have a
material impact on the Group's results are likely to occur from period to
period.  The only such critical judgement required when preparing the Group's
accounts is discussed below.

Environmental provisions

At 30 June 2006, the Group has an environmental provision of £8.5m in respect of
soil and potential ground water contamination on a number of sites.  These
provisions were established in line with UK GAAP and have been reviewed to
ensure compliance with IFRS.  Based on information currently available, this
level of provision is considered appropriate by the directors.

11.Post balance sheet events

On 29 June 2006, the Group announced the proposed acquisition of Uniqema, a
division of Imperial Chemical Industries PLC ('ICI') for a consideration of
£410m on a cash and debt free basis.  At completion, the Group will pay £370m
and assume £40m of unfunded retirement benefit liabilities.  As part of the
completion mechanics, there will be an adjustment for working capital and an
adjustment for any retirement benefit liabilities, which will be funded, net of
tax, by ICI.

The acquisition constitutes a 'Reverse Takeover' under the UK Listing Rules by
virtue of its size and is subject to the approval of the Croda shareholders,
which will be sought at an Extraordinary General Meeting ('EGM') that is
anticipated to be held in late August, and obtaining the necessary competition
clearances.  The Circular inviting shareholders to vote at the EGM is expected
to be posted in the near future.  Given that the transaction is a 'Reverse
Takeover', Croda's ordinary shares were suspended from trading on 29 June 2006,
pending the publication of a Prospectus for the enlarged Group.  It is
anticipated that the Prospectus will be published in late August 2006 and that
trading in Croda shares will recommence shortly thereafter.


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