Export growth lifts Croda 40%

CRODA International pleased the City yesterday with a 40 per cent rise in half-year pre-tax profits to pounds 14.3m after its core chemical businesses achieved 'very good volume growth' in export markets.

Analysts - who a year ago claimed Croda had shot itself in the foot with an 'unwarranted' dividend cut - warmed to the company after the results, and increased their full-year profits forecasts to as much as pounds 29.5m. Croda's shares rose 12p to 175p.

Keith Hopkins, Croda's chief executive, said there was an increasing 'green' demand for the chemicals that the company makes from natural vegetable oils and fats. Chemical sales were 12 per cent ahead at pounds 122.8m, due almost solely to volume growth.

New plant helped the chemicals division increase its profits by 35 per cent to a record pounds 15.5m.

But Croda's cosmetics business, which makes own-label products for the likes of Marks & Spencer and Sainsbury, fell to a small loss of pounds 200,000. Dr Hopkins said the division had suffered a tough six months because of an overhang of products from a poor Christmas last year and substantial price competition. The outlook for next Christmas was 'pretty bleak'.

Croda's coatings division recovered from last year's depressed profit of pounds 2.7m to make pounds 3.3m.

Despite seeing no end to the recession, Croda is optimistic about prospects for its chemical business. The interim dividend is unchanged at 2.75p.