Synthomer PLC on Tuesday reported a loss for the first half of 2024, during which the company progressed efforts to cut costs and shift strategic focus to specialty businesses.
The London-based developer of highly specialised polymers swung to £33.2 million pretax loss in the half-year that ended June 30 from a £16.7 million pretax profit the previous year.
Revenue from continuing operations was broadly flat at £1.05 billion.
Efforts to reduce costs delivered £13 million in benefits with the company optimising procurement and production. However, this was partially offset by increases in operating costs primarily stemming from wage inflation and the normalisation of bonus accrual in the year.
Underlying operating profit increased 16% to £29.0 million from £25.1 million.
The underlying figure does not include the one-off costs mostly relating to amortisation, restructuring, and the closure of sites which totalled £31.2 million in the recent half.
Synthomer cut net debt by 30% to £560.6 million from £795.8 million.
Chief Executive Officer Michael Willome said: ‘While we remain cautiously encouraged by trading in some end markets since the start of the year, evidence of a broad-based recovery in demand remains limited. Despite this, we have made earnings progress by delivering on our cost and operational efficiency programmes, and we continue to strengthen our strategic positioning for the future by focusing on our speciality businesses, creatively managing our resources and enhancing our operating leverage.’
In April, the company sold it latex compounding business for €27.5 million after designating it as non-core as part of its strategy update. Further non-core divestments are underway including its European paper and carpet markets business.
‘While our main focus remains on furthering our non-core divestment programme, we continue to identify and track potential accretive bolt-on acquisition opportunities in strategically attractive end markets and geographies for the future, when our financial circumstances allow,’ Synthomer said.
The company reiterated its full-year outlook for positive free cash flow and ‘some earnings progress’ anticipated from continuing operations while no sustained end market recovery is expected at this stage.
Synthomer shares were up 3.3% to 243.81 pence each in London on Tuesday morning.
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