Financial Analysis Croda Plc - Business Plan Example

Download file to see previous pages This increased to £916.2 million in the year 2009 signifying a compounded annual growth rate (CAGR) of 25%. With the rise in turnover, the Profit after tax (PAT) position of the company also increased by nearly 17 percent. In the year 2005, the company did not rely too much on debt as is evident from the low gearing percentage of 30% whereas this increased by 43% to reach 182.4% in the financial year 2009. The turnover and profit of the company have remained positive over the last five years period but the company has not been able to sustain a rise in ROIC. Even the operating profit margin of the company was significantly high at 17.7% in 2005 but over the five year period, it has reduced to 13.1% (Croda, 2009).
In the Chairman’s Statement, it is given that the company is continuously focusing on customers, markets, and markets product innovation. Together with this, the company works towards reduction of costs given the challenging global economic conditions. In the year 2009, the company announced about site closures at Bromborough in Merseyside and Wilton in North Yorkshire. The former ceased its production operations in 2009 and its operations are treated as ‘discontinued’ following its exit from the “specific commodity market”. The company wishes to align its future dividend with the growth in future earnings (Croda, 2009). Based on the strong market performance of the company towards the end of 2009 and in the financial year 2010 the Chairman expressed confidence in the future growth prospects of the company. As per the Group Chief Executive Mike Humphrey, an important feature of the company’s business model is its ability to sell a wide variety of products to various customers across the world. He has stated how the company has no real control over the pricing of certain commodity products like glycerine and fatty acids. Owing to the low margins on these products as compared to other specialty products the company has sold, ...Download file to see next pagesRead More