Croda International PLC (LON:CRDA) is to return an extra £150mln to shareholders in the form of a special dividend after cash generation improved significantly last year.
Coupled with the 87.0p ordinary dividend, shareholders are set for a £270mln windfall. The FTSE 100 group, which makes chemicals used in cosmetic creams and dietary supplements, has been investing heavily in a new plant in North America of late which has sucked up a lot of spare cash.
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But construction at the plant completed last year, which allowed free cash flow to improve sharply to £155.4mln (2017: £98.5mln).
Overall, Croda reported a 1.0% rise in sales to £1.39bn (2017: £1.37bn) in the 12 months ended 31 December.
Profit before tax edged 1.2% higher to £317.8mln (2017: £314.1mln). Adjusted for one-off items, pre-tax profits climbed 3.5% to £331.5mln (2017: £320.2mln).
Croda’s performance technologies business was the standout performer, with profits soaring 13% year-on-year as bosses moved away from higher-volume, lower-margin products.
“2018 was another year of strong progress for Croda,” said chief executive Steve Foots.
“All core sectors contributed to this performance, demonstrating Croda's three legs of growth.
"Cash generation strengthened and we have proposed the return of a further £150mln through a special dividend to shareholders, in addition to an increased ordinary dividend.”