Shares in Synthomer plc (LON:SYNT) gained today after the polymers supplier announced the acquisition of Perstorp Oxo Beligium AB for €78mln and reported an increase in full year profits.
Synthomer, which makes nitrile rubber used in medical gloves, has bought the chemicals business from Sweden-based firm Perstorp Group.
The acquisition, completed yesterday, was funded from existing financial resources. Perstorp Belgium, which supplies additives to the decorative and industrial coatings industries, will be consolidated into Synthomer’s results from March 2017.
“The business is an excellent fit and provides increased access to new products and customers,” said chief executive Calum MacLean.
Separately Synthomer reported underlying pre-tax profit of £122.2mln for the year ended 31 December 2016, compared to £95.4mln the previous year.
Revenue rose to £1.05bn from £870.1mln, supported by organic growth in the Europe and North America division and the Asia and rest of the world segments.
An increase in Europe and North America revenue to £746.1mln from £582.1mln was driven by improved margins, lower average raw material prices, the positive impact of a weaker sterling and incremental volumes associated with the acquisition of the performance adhesives and coatings (PAC) business from Hexion Inc. in June last year for $221mln.
In Asia and the rest of the world, revenue climbed to £299.6mln from £288mln, buoyed by a strong performance in the waterborne dispersions businesses in China and the Asia Pacific.
However, volumes fell 1.8% reflecting a weak first half in the Asian nitrile latex division. Volumes in nitrile stabilised in the second half following expansion of capacity in the market, although margins softened.
During the period the group sold its South African business and the added PAC Chonburi to the business.
“Looking ahead, we expect to continue to see resilient trading in Europe, although the raw material and macroeconomic environments remain volatile,” said chairman Neil Johnson.
“Whilst we envisage our Asian Nitrile business will be further impacted by the introduction of the additional industry capacity in 2016, this will be partially offset by a full year of PAC and 10 months of Perstorp Belgium included in the 2017 results.”
The total dividend was lifted to 11.3p from 8.6p per share.
Shares rose 1.10% to 457.80p in morning trading.