Croda International PLC keeps up dividend despite demand drop from cosmetics and

() kept up its half-year dividend even though the coronavirus pandemic hit its division that supplies to the cosmetics and skincare industries.

The FTSE 100 group’s Personal Care arm saw sales fall 8% and profits by 17% despite a flat first quarter, though the Performance Technologies unit’s revenues fell 5% and Life Sciences was even more resilient with sales down just 0.8%. 

The smaller and ‘non core’ industrial chemicals division saw sales slide 17%.

READ: Croda expands life sciences arm with Avanti Polar Lipids acquisition

Overall group sales fell 5.8% to £672.9mln for the six months to June 30 and with return on sales down 110 basis points, group profit before tax was 12.8% lower at £144.9mln.

Free cash flow was down 15% but still well in the positive at £80.2mln, allowing Croda to maintain its interim dividend at 39.5p, noting that it with all its 19 plants remaining operational it has not needed to furlough any employees, make pay cuts nor use government liquidity facilities. 

Chief executive Steve Foots said: “Whilst customer demand has inevitably been impacted by the crisis, the strength and breadth of our portfolio, global footprint and flexible manufacturing have all helped to reduce its impact.”

He added that current trading conditions remain volatile, but the group’s strategy is unchanged and “by focusing on the future during these challenging times, we can accelerate delivery to enhance future growth and profitability”.

The shares were down a few pennies to 5,596p on Thursday morning. 

Analysts at broker Liberum said: “The shape of the results turned out to be pretty much as we predicted in our preview at the end of June – resilient performance in Life Sciences, a softer landing than feared in Performance Technologies where 1/3 of sales go into Auto/Energy markets and a harder landing for Personal Care than expected, particularly in 2Q.”