Synthomer (LSE:SYNT) said first-half trading came in ahead of expectations, driving an upgrade to its full-year 2026 outlook to slightly ahead of market expectations.
The speciality chemicals company reported continuing-group revenue of £954.3m for the six months to 30 June, up 5.1% in constant currency from £894.4m a year earlier, with volumes up 2.3%. Continuing group EBITDA rose 16.4% to £96.7m from £83.1m, lifting the margin by 80 basis points, with underlying pre-tax profit climbing to £12.7m from £1.3m.
Of the £14m EBITDA improvement, around £8m came from strategic growth initiatives and self-help measures, while around £6m stemmed from Iran conflict-related disruption to competitors' supply chains that boosted Health and Protection volumes by 13.5% in the second quarter, gains the company does not expect to recur in the second half.
Net debt rose to £671.3m from £575m at the end of December, reflecting higher raw material prices and seasonal working capital build, pushing covenant net debt to EBITDA to 4.9x from 4.7x, against £268m of committed liquidity.
The company expects a working capital inflow and positive free cash flow in the second half, with full-year free cash flow before receivables financing movements now expected to be positive and year-end leverage to improve to 4.0-4.35x.
Synthomer also announced the June divestment of its Acrylate Monomers business, its fourth non-core disposal since 2022, with three further divestment processes underway.
"We are confident that by remaining true to our speciality strategy, we will continue to strengthen our balance sheet and deliver further sustainable earnings growth," said chief executive Michael Willome.
News Intelligence what this means for the company
Synthomer upgraded its 2026 profit and cash guidance after first-half EBITDA jumped 16.4% to £96.7m on a mix of structural margin gains (£8m from strategic initiatives and self-help) and temporary supply-chain tailwinds from Iran-related disruption to competitors (£6m). The company now expects full-year free cash flow to turn positive and year-end leverage to improve to 4.0–4.35x, a material step toward its deleveraging goal after completing a bank refinancing in April and unwinding a £50m receivables facility in March.
The upgrade rests partly on non-recurring competitive gains the company explicitly does not expect to repeat in H2, so sustainable earnings power depends on whether the £8m structural margin lift holds and whether ongoing divestitures (three processes underway after the Acrylate Monomers sale) deliver the deleveraging trajectory management is signalling. Current leverage of 4.9x remains elevated against the 4.0–4.35x target.
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