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Investing.com -- Shares of Synthomer (LON:SYNTS) PLC (LSE:SYNT) tumbled 7.7% as the market reacted to the company’s latest financial results and forward-looking statements.
The manufacturer reported sales of £1,987 million and EBITDA of £147 million, with net debt remaining in line with guidance at £597 million, translating to a leverage ratio of 4.6 times, just under the expanded covenant threshold of 5.75 times.
The company’s outlook for the fiscal year 2025 suggested trading in line with muted expectations, facing a tough comparator from the first quarter. Despite limited improvement anticipated in end markets, Synthomer expressed confidence in further earnings progress for the fiscal year 2025, attributing this to self-help measures. It also expects positive free cash flow (FCF) and some deleveraging.
Analysts from Jefferies commented on the results, noting that "Synthomer’s results are in line with guidance given in January, and 1Q25F has progressed as expected, with no notable improvement in demand.
We believe the group should make further progress this year on earnings and cash, and there is plenty going on from a self-help perspective, which is helpful, but the demand backdrop is likely to remain lacklustre (which likely limits the extent of deleveraging that can be achieved)."
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