LONDON -- The shares of Croda International (LSE:CRDA) slipped 35 pence lower to 2,521 pence during early London trade this morning after the market reacted unkindly to the group's annual figures.
Croda, which develops specialty chemicals for use within cosmetics, fungicides, and engine oils, revealed underlying sales up 2% to £1,052 million and underlying operating profits up 7% to £255 million.
The FTSE 100 member claimed its results were a record and were in part driven by "exciting new product launches."
The figures also showed margins at an impressive 24% and net debt reduced by £23 million to £208 million.
The annual dividend was lifted 8% to 59.5 pence per share.
Martin Flower, Croda's chairman, said:
This achievement in tough economic conditions demonstrates the resilience of our Consumer Care and Performance Technologies businesses, with both sectors reporting higher profits and a further improvement in margins.
Our progress reflects our focus on sustainable growth through continued product innovation in niche markets and increasing investment in new technologies and emerging markets, particularly in Asia and Latin America.
Referring to current trading, Flower said Croda had made an "encouraging start" to 2013.
Based on today's figures, Croda's shares trade on a P/E of 19 and offer a yield of 2.3%. Certainly that P/E multiple looks a little racy, given today's figures showed the business expanding at a single-digit pace.
However, Croda's earnings quadrupled between 2007 and 2011, which propelled the shares up at least four-fold during the last five years.
Of course, whether the current £3 billion market cap, today's results, the great growth record and the general outlook for specialty chemicals all combine to make Croda a buy remains your decision.
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