Synthomer says demand across end-markets remains weak

(Sharecast News) - Synthomer said on Thursday that demand remained soft across a number of its markets, but that self-help initiatives were helping to mitigate this. In a third-quarter trading update, the supplier of high performance polymers said the soft end-market demand conditions were set to persist for the rest of the year and that it expects full-year continuing group earnings before interest, tax, depreciation and amortisation to be "similar to" the £143m achieved in 2024.

In its interim results in August, Synthomer had said it was on track to deliver previously identified £25m to £30m in annual self-help and strategy benefits for 2025, supporting "expected progress" over continuing group EBITDA of £143.1m a year earlier.

Synthomer said the adhesive solutions division continued to regain share and enhance margins, supported by its investment in increased amorphous polyolefin capacity for adhesive applications at the group's Texas facility, which came onstream in July.

Health & Protection volumes for the medical glove market remained subdued, although Synthomer said its customers were "increasingly confident" of benefiting from their improved competitiveness in the US medical glove market following tariff changes.

End markets in the Coatings & Construction Solutions division were more varied. Improving construction and relatively stable consumer sub-segments were offset by a slowdown in coatings demand particularly in the USA and low levels of oil and gas drilling activity affecting the energy solutions business.

"As anticipated, our 'in region, for region' manufacturing strategy means we are experiencing limited direct tariff impact which we are largely offsetting through surcharges, but we remain mindful that ongoing uncertainties around the global trade environment continue to create volatility in end-market demand," the company said.

Chief executive Michael Willome said: "With ongoing global geopolitical and tariff-related turbulence continuing to unbalance demand and supply in our end markets, we have sharpened our focus on what we can control - expanding our cost saving programme, accelerating the transformation of our business portfolio and allocating resources even more rigorously to strengthen our financial position.

"We have clear commercial, operational and strategic plans in place, which are contributing to greater resilience and a stronger portfolio mix with considerable operating leverage to end-market demand recovery.

"As such, we remain confident in our objective to double Synthomer's recent earnings levels in the medium term, through our cost actions and strategy of focusing the business on market-leading speciality products with sustainable, differentiated benefits for global end-users."

At 0830 BST, the shares were up 2.3% at 58.22p.