Chemicals firm Croda stockpiles goods for Brexit

Chemical manufacturer Croda announced today it is stockpiling goods in mainland Europe and adapting its trading model in preparation for Brexit.

Read more: Carney: UK growth 'guaranteed' to fall in no-deal Brexit

The British firm, which supplies chemicals to Unilever, Proctor & Gamble and L'Oreal among others, also saw adjusted profit before tax tick up 1.2 per cent year on year to £317.8m.

Sales in 2018 rose one per cent to £1.39bn.

FTSE 100-listed Croda’s share price dropped 3.7 per cent to 4,874p as investors reacted to the news, making it one of the top losers on the UK's blue chip index despite reporting a rise in profit and revenue.

In response to rising profits, Croda returned £150m to shareholders as part of a special dividend of 115p per share.

The company, which produces 80 per cent of its goods and sells 96 per cent of its goods outside the UK, said it was readying its shipping operations for Brexit by finding ports with sufficient capacity after the UK's departure.

Croda also said it was re-registering UK products in the EU to avoid compliance issues on the continent.

UK chemicals firms had raised concerns that their goods may no longer be valid under the EU’s Reach regulation programme.

However, the UK government has confirmed that EU-held Reach registrations will continue to be accepted in the short-terms for products coming into the UK.

Croda noted: “An orderly transition of the UK out of the EU is expected to be manageable for Croda.

"However, given uncertainty over the method and timing of the UK's exit from the EU, we have progressed contingency plans for a 'hard Brexit'.”

The UK is due to leave the EU on 29 March, but Prime Minister Theresa May’s exit deal, which was agreed with the EU last year, is yet to be approved by parliament, increasing the likelihood of a no-deal Brexit.

Read more: May to give parliament a vote on no-deal Brexit

Chief executive Steve Foots said: “2018 was another year of strong progress for Croda. All core sectors contributed to this performance, demonstrating Croda's three legs of growth.”

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