London – Synthomer plc has upgraded its earnings forecast on the back of “strong trading momentum across the business,” the group said in a 14 Jan trading update for the year ended 31 Dec 2020.
Buoyed by stronger trading across its three main divisions, Synthomer now expects 2020 EBITDA of around £255m, about 10% ahead of the guidance provided in a trading statement of 14 Oct 2020.
The recent Omnova acquisition, investment in new capacity, efficiency measures and continued strength in performance elastomers, “will underpin strong EBITDA growth in 2021,” said the UK group.
During the final quarter of 2020, the Performance Elastomers unit continued to “perform strongly”, with positive trends in the nitrile latex business continuing to exceed expectations.
Conditions in the SBR latex business also continued to strengthen, with all SBR segments except paper trading ahead of the comparative period in 2019, Synthomer added.
The group’s Functional Solutions business, meanwhile, delivered “sustained improvement” in the final quarter with consumer-facing and industrial end markets remaining strong – except for the oil & gas market.
Industrial Specialities also had a strong finish to the year, with the laminates and films business, which serves the home improvement and recreational vehicles market, performing ahead of the prior-year period.
Looking forward, Synthomer said that, while continuing to adapt its operations to the ongoing Covid-19 pandemic to ensure the safety of all employees, it did not expect any significant disruption to business.
"In a very challenging year, Synthomer has delivered a strong performance,” said Caroline Johnstone, chair of Synthomer. This is “testament to the strategy that we have been consistently executing and the investments that we have made.”
Synthomer issued the trading update ahead of announcing full-year results on 4 March.