ii view: FTSE 100’s Croda tops City forecasts
It has a proud dividend track record but its shares have more than halved over the last five years. We assess prospects for this speciality chemicals maker.
16th October 2025 11:16
by Keith Bowman from interactive investor
Third-quarter trading update to 30 September
- Currency adjusted revenue up 6.5% to £425 million
Guidance:
- Continues to expect full-year 2025 adjusted pre-tax profit of between £265 million and £295 million versus £260 million in 2024
ii round-up:
Speciality chemicals maker Croda International (LSE:CRDA) today detailed sales that topped City forecasts, led by demand for beauty ingredients, fragrances and flavours and crop protection chemicals.
Third-quarter currency adjusted sales to 30 September rose 6.5% to £425 million, exceeding analyst estimates of £417 million. Buoyed by expected cost savings of £25 million, the Yorkshire headquartered company continues to forecast full-year adjusted pre-tax profit of £265-295 million. That’s potentially up from last year’s £260 million.
Shares in the FTSE 100 company rose 5% in UK trading having come into these latest results down by a fifth so far in 2025. The FTSE 100 index is up almost 14% during that time. Fellow chemicals maker Synthomer (LSE:SYNT) has more than halved year-to-date.
- Our Services: SIPP Account | Stocks & Shares ISA | See all Investment Accounts
Croda operates across the three divisions of consumer care, life sciences and industrial specialities, making chemical ingredients for items ranging from beauty creams to medical drugs and solutions to treat water.
Consumer care sales gained most, rising 8% on a currency adjusted basis to £242 million, aided by rising North American beauty ingredient sales and continued demand for fragrances and flavours. Home care related sales fell 6%.
Elsewhere, currency adjusted Life Science related sales improved 6% to £134 million. A near one-fifth rise in crop protection chemicals countered flat demand for both medical drug ingredients and seed enhancement items.
Sales of industrial Specialty chemicals, and including emulsifiers and detergents, was flat at £49 million.
Geographically, currency adjusted sales for Latin America led the way, rising 11%. That was followed by a 10% improvement for North America, an 8% rise for the combined Europe, Middle East, and Africa (EMEA) region, and a 4% fall on a non-currency adjusted basis for Asia.
Broker UBS reiterated its ‘buy’ stance on Croda shares post the news. Full-year results are scheduled for 24 February.
ii view:
Started in 1925, Croda today employs around 6,000 people. The Consumer Care business generated most sales during 2024 at 56%, followed by Life Sciences at 31%, and Industrial Specialities after a previous part business sale, at 12%. Geographically, EMEA generated 39% of 2024 revenues, North America 27%, Asia 23% and Latin America the balance of 11%.
For investors, US trade tariffs and Croda’s previously proposed customer surcharge to export to the country now offer headwinds. A recent warning from Ineos head, Jim Ratcliffe, warning of possible extinction for the UK chemical sector given high energy costs and carbon taxes is not to be ignored. The positive impact of the pandemic and ingredient sales for Pfizer’s Covid vaccine has made for tough after year comparatives, while inflation and the costs of group investments were previously flagged as offering headwinds.
- ii investment performance review: Q3 2025
- Analyst outlook for FTSE 100 mining stocks, small-caps and lithium
- FTSE 100 dividend stars: City view on M&G, Phoenix and L&G
More favourably, signs of improving customer demand persist. A management focus on product innovation and reducing costs is ongoing. Diversity in both business type and geographical region exists, while a record of more than 20 years of consecutive annual dividend increases puts the shares on a forecast dividend yield of around 4%.
In all, a consensus analyst fair value estimate above £34 per share implies longer-term optimism in the City. However, with shares near an 11-year low, more cautious investors might prefer to wait for better signs of a sector recovery.
Positives:
- A diverse product and customer base
- A progressive dividend policy
Negatives:
- Uncertain economic outlook
- Subject to currency movements
The average rating of stock market analysts:
Buy
These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.
Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.