Synthomer expects further profit growth despite mixed demand

(Sharecast News) - Chemicals group Synthomer pleased investors with "robust" results for 2024 despite some challenging end markets, with full-year figures expected to meet market expectations and further earnings growth predicted for 2025. The company, which supplies high-performance, specialised polymers such as coatings, adhesives and healthcare solutions, said in a pre-close trading update that it made "robust progress" last year.

Annual revenues were £2.0bn, up from £1.94bn in 2023, with EBITDA from continuing operations in the range of £145m-148m, up from £137m the year before.

Group volumes were higher in the second half, but growth slowed from the first half, which Synthomer said reflected "mixed end-market demand trends". Nevertheless, momentum improved in the fourth quarter relative to the third, it said.

Meanwhile, ongoing cost-savings and "reliability improvement programmes" helped deliver a strong gross margin performance in the fourth quarter, supported by an ongoing re-allocation of resources towards higher-margin solutions.

"We are pleased to report robust underlying earnings progress in 2024, even with the additional operating investments we have made in our people and our assets," said chief executive Michael Willome.

Looking ahead, Synthomer pointed to "further earnings progress in 2025, even if end-market demand does not improve", due to improvements in margins and the strategic progress made in 2024.

The stock was up 3.1% at 154.19p by 0840 GMT.