British speciality chemicals manufacturer Synthomer Plc reported that trading accelerated in April and May, attributing the uptick to a changed commercial environment caused by the U.S.-Iran conflict that disrupted competitors' global sourcing and distribution networks, particularly across Asia. The company said that the resulting re-routing and supply tightness pushed volumes higher in a number of product areas.
Shares in the UK-based group were trading lower following the announcement - down 5.8% as of 05:01 ET (09:01 GMT).
In its trading statement released ahead of the 2026 annual general meeting, Synthomer said continuing group volume, revenue, EBITDA and EBITDA margin all showed strong growth in the first five months of 2026 compared with the equivalent period a year earlier. The company said overall trading was running ahead of the prior-year period.
Synthomer noted that significant increases in raw material and energy costs were passed through to customers. It flagged that volumes in several areas - most prominently within its Health & Protection segment - benefited both from disruption to competitors' networks and from pre-buying activity by customers seeking to bolster the resilience of their own supply chains.
As a consequence of these dynamics, the company said that EBITDA growth in the second quarter has been ahead of its expectations.
Momentum improved across all three of Synthomer's divisions through the first quarter, the company added. Management attributed this to a combination of modest end-market recovery, delivery of cost savings and targeted growth initiatives. The statement cited disciplined investment in coatings for data centers within Coatings & Construction Solutions and incremental APO capacity in Adhesive Solutions as examples of those targeted actions.
The company said that much-improved performances in Coatings & Construction Solutions helped offset a slower start in parts of Health & Protection and Performance Materials.
After completing a debt refinancing and extending maturities in April, Synthomer reported that it holds good liquidity and covenant headroom. The company said this position prevailed despite the unwind of an arrangement with KLK and a normal seasonal build-up in working capital during the first half, which reflects the usual H1-weighted activity profile together with recent higher pricing and volumes.
Synthomer also said it is continuing to advance non-core divestment processes intended to accelerate the transformation of its business portfolio, following an announcement made the prior week.
"We are very pleased with how the business has performed so far in 2026," chief executive Michael Willome said. "The market environment remains uncertain and so our focus is on continuing to deliver our speciality strategy."
The company said the strong trading in the first half, combined with benefits from prior-year self-help actions, underpins its confidence in delivering year-on-year progress for 2026. At the same time, Synthomer cautioned that the geopolitical context remains volatile and that it is too early to determine how long current conditions will last or what the longer-term end-market trends may be.
Jefferies, which maintains a "hold" rating on Synthomer with a 65 pence price target, described the trading update as "encouraging." The brokerage said consensus 2026 EBITDA estimates range between 145 million and 150 million and are likely to move higher from current levels.
However, Jefferies noted that guidance commentary was unchanged given the wide set of possible outcomes for the second half of the year, and that while the company has made good progress in 2026, risks remain around the sustainability of recent gains into coming months. The broker also highlighted that the core issue of high leverage remains in place.