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Shares of chemical organization Synthomer jumped 31% on Tuesday, its biggest gain in a day. The company said year-to-date operations have been “cautiously encouraging” despite a reported decline in revenue.
The polymer maker posted a 15. 5 percent drop in cash to £1. 97 billion last year, below its £2 billion target for January. Its underlying financial profit fell 77. 8 percent to £37. 7 million.
Synthomer attributed the drop to a “prolonged weakness in demand, exacerbated by reduced inventories,” with volumes falling 9. 9 percent and passing on declining commodity prices.
He added that the company is working to reduce its site footprint from 43 to 36 and achieve cost savings of £18 million.
“Despite a challenging year, we have taken decisive action to position the company for the future,” said CEO Michael Willome.
Synthomer said its business activity so far this year has been “cautiously encouraging, supported by the replenishment of short-term visitors; Evidence of a broad recovery in demand remains limited. “
The company said it expects earnings to rise in 2024 even in the absence of macroeconomic improvement.
Analysts at Jefferies remain cautious, saying in a note that “conditions remain too challenging to be positive yet. “Despite today’s momentum, Synthomer’s percentage value is down 81% from a year earlier.