Shares in chemicals group Synthomer soared 31 per cent on Tuesday, their biggest one-day jump ever. The firm said trading so far this year had been “cautiously encouraging” despite reporting a revenue fall.
The polymer maker posted a 15.5 per cent drop in revenue to £1.97bn last year, slightly undershooting its January guidance of £2.0bn. Its underlying operating profit fell 77.8 per cent to £37.7m.
Synthomer pinned the decline on “prolonged demand weakness exacerbated by destocking,” with a 9.9 per cent fall in volume and a pass-through of lower raw material input prices.
It added that the company was focused on cutting its site footprint to 36 from 43 and achieving cost savings of £18m.
“Despite a challenging year, we have taken decisive actions to position the business well for the future,” said chief executive Michael Willome.
Synthomer said its trading since the start of this year was “cautiously encouraging, supported by short-term restocking by customers, though evidence of broad-based demand recovery remains limited”.
The firm said it expected earnings progress in 2024, even if there is no macroeconomic improvement.
Analysts at Jefferies were still cautious, saying in a note that “conditions remain too tough to get positive yet”. Despite today’s boost, Synthomer’s share price is down 81 per cent from a year ago.