Synthomer Share Discussion Threads

[wigwammer] 18/7/2023 12:04

I can see that. But if they can get anywhere close to to the target 15% EBITDA margin as things recover (circa £330m pa) then the debt payments will appear manageable and the shares will recover strongly. Personally, I can see a recovery here as the cycle works through and demand recovers... ATB

[elsa7878] 18/7/2023 08:00

Net debt is 800m but actual debt > 1 bn. What is the interest on that. 75 m of EBITDA is pre-debt interest obviously. So one you take that off they are making very little, hence cut capex etc. Not sustainable for long imho.

[queenbreguet] 18/7/2023 07:55

Um still in the doldrums.

[hamhamham1] 18/7/2023 07:42

Synthomer plc
Post-close trading update



Synthomer plc ('Synthomer' or 'the Group') today announces an update regarding trading for the six months ended 30 June 2023 (the 'period') and our outlook for the remainder of 2023.



Group trading
Continuing Group revenue in the period was £1.1bn with EBITDA expected to be in the range of £72-74m, broadly consistent with the Board's expectations described in our 2022 results announcement in March. Continuing Group EBITDA in the second quarter was higher than the first, notwithstanding the challenging macroeconomic conditions throughout the period. Robust pricing and our strong focus on margins helped to mitigate substantially lower volumes compared with the first half of 2022, a consequence of destocking, subdued levels of demand across most of our end markets and increased competition in some of our base chemical product ranges.



We continued to focus on cash generation during the period, with reductions in capital expenditure, working capital and costs across the Group. As at 30 June 2023, net debt was c.£795m, with net debt:EBITDA on a leverage covenant basis of 5.5 times and committed liquidity of more than £400m.



Divisional update

All divisions continued to make progress against their key priorities, including delivery of our refreshed strategy as announced last October. Those parts of our portfolio identified as the more speciality, higher growth areas in our strategy review proved the most resilient during the period and are already beginning to benefit from our differentiated focus and investment.



Coatings & Construction Solutions (CCS) is achieving robust pricing and margins, with improved trading performance over the period compared with the last quarter of 2022 despite cautious customer buying behaviour. In line with our strategy, CCS recently implemented several actions to broaden geographic and customer penetration which will strengthen organic growth and increase market share over time, while enhancing margins.



The performance of Adhesive Solutions (AS) in the period continues to reflect the lower volume environment as well as the previously disclosed operational reliability and supply chain challenges in the adhesive resins business, acquired in early 2022. We expect our reliability and performance improvement measures to have a positive impact in the second half of the year, despite continued demand weakness. We also recently committed to expand our speciality amorphous polyolefins capacity in North America to support growth in this region.



In Heath & Protection and Performance Materials (HPPM), the challenging medical glove market dynamics which followed the unprecedented activity during the pandemic continue. In line with previous indications, we do not expect low nitrile butadiene rubber (NBR) production levels to abate before the end of 2023. We continue to focus on capacity management and cost control.



Our non-core portfolio rationalisation programme continued to progress during the period.



Update on outlook
The Board does not anticipate a material recovery in customer demand before the end of the current year. However, we anticipate c.£20m in self-help measures expected mainly in H2. Overall the Group remains confident of making sequential progress in the second half relative to the first.



The Group continues to take decisive action to strengthen our business so that it is positioned for profitable growth when demand does begin to recover. We remain confident in our ability to execute our refreshed strategy and deliver the medium-term targets set out last October, which were mid-single-digit growth in constant currency over the cycle, EBITDA margins above 15% and mid-teens return on invested capital.



Synthomer will report half year results for the six months to 30 June on 7 September 2023.

[my retirement fund] 11/7/2023 15:13

Dont mince words. Porche just say it like it is

[mrminister] 26/6/2023 16:05

Selling must be exhausted by now surely ....I'm expecting an rns holdings increased any day now ...

[pottsypotts] 26/6/2023 14:59

Bottoming out or a temporary blip before the downward trajectory continues

[nomolos1] 22/6/2023 11:58

Nice insider buy - as a new CEO he'll need to build his stake over time in any case - but good to see.

[pottsypotts] 22/6/2023 10:29

Not a massive one but at least a director has some faith

[mrminister] 21/6/2023 16:23

small drop today , so better ....good vols as well

[lonrho] 21/6/2023 16:15

Nope they've sold a business since for 200 million

[farrugia] 21/6/2023 15:23

is net debt at 1,070 million?

[tuftymatt] 21/6/2023 15:21

meijiman, I agree with what you posted earlier but to double from here would only see the share price back where it was 3 months ago!!

That's the issue for longer term holders / attracting new blood as the fall over the past two years has been nothing short of savage.

[edmundshaw] 21/6/2023 13:15

Yes, directors did some buying after some earlier falls. I don't think it means a lot though...

[farrugia] 21/6/2023 12:48

how much debt do they have?

also no director buys? do directors have skin in the game?

[lonrho] 21/6/2023 12:30

They need another disposal for approx 200m to get debt down to manageable levels. should be doable as they have some attractive high margin businesses.

[meijiman] 21/6/2023 11:55

Brought low by pitifully poor management. Foolish overpriced acquisition (s).
Yes it is all about debt and debt management. That said could easily see this doubling on say a 12 month view if management can demonstrate there is a floor under the situation...ie markets not getting worse and debt repayment being sorted.

[fuji99] 21/6/2023 11:19

Now at 14 year low.

[rcturner2] 20/6/2023 15:13

PE is irrelevent here. All about the debt.