Q3 Trading Update

RNS Number : 7178E

Synthomer PLC

06 November 2015

 

November 6^th 2015

Synthomer plc

Q3 Trading Update

Continued progress, in line with full year expectations

Synthomer plc ('Synthomer' or 'the Group') today issues a trading update for the third quarter ended September 30^th, 2015.

Trading

Europe and North America

The Europe and North America segment has continued to perform in line with the positive trends seen during the first half of the year. Whilst volumes were lower than Q3 2014 due to ongoing weakness in our Paper business, we continued to make good progress driven by a further improvement in Construction and Coatings and Functional Polymers. The recent falls in raw material prices helped to deliver a modest improvement in unit margins in Q3 over Q2 and the comparable period in 2014.

Asia and Rest of World

The Asia and Rest of World segment has continued to perform strongly in Q3, with both volumes and unit margins higher than in Q2 and Q3 2014. This ongoing momentum reflects a further rise in volumes and unit margins in our Nitrile business. Our principal revenue streams and raw material costs in Asia are US dollar denominated, and accordingly the recent volatility in the Malaysian Ringgit has a limited impact on the reported operating profit in Sterling.

Financial Position

Group debt increased from £77.2m to £94.8m following the Final Ordinary and Special dividend payments of £42.8m on 3 July 2015, offset by continued strong cash generation of £26.0m during the period.

The Group balance sheet remains strong with the net debt/ EBITDA ratio below 1x.

Outlook

Overall, the Board's expectations for Full Year 2015 remain unchanged.

Looking further ahead, in Europe and North America, our strategy continues to focus on innovation, margin improvement and tight cost control to drive performance. Consequently, we expect this segment to continue at similar volumes and margins through 2016.

As stated in our interim results, a number of Asian Nitrile producers, including Synthomer, have announced plans to increase capacity during the latter part of 2016 and early 2017. Whilst we are confident of continued growth in the market and strong demand going into next year, we expect this planned capacity increase to impact the supply/ demand balance during the second half of 2016 leading to similar net volumes and margins to 2015 for the year as a whole. 

-ENDS-

ENQUIRIES:

Calum MacLean, Chief Executive Officer	Charles Armitstead
Stephen Bennett, Chief Financial Officer	Pendomer Communications
Tel: + 44 1279 436211	Tel: + 44 20 3603 5220

The Company will hold a conference call for investors and analysts at 0800 BST today. 

Please dial + 44 20 3426 2890 to gain access to the call.

 

END

 

 

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