Synthomer PLC reported a trading update indicating its fiscal 2025 results will fall slightly short of market expectations, with EBITDA now projected in the range of £135 million to £138 million.
The company said it anticipates full-year sales of approximately £1.74 billion, below the consensus forecast of £1.82 billion. Despite the top-line shortfall, Synthomer highlighted an improvement in both gross margin and EBITDA margin, which management attributed to a stronger concentration on higher-margin specialty solutions and a programme of cost reductions across its Coatings & Construction Solutions division and general and administrative expenses.
Performance varied across the company’s businesses. The Adhesives & Synthetics division reported margin enhancement and an associated gain in market share. By contrast, the Coatings & Construction Solutions segment only recorded a modest uptick in coatings during the fourth quarter of 2025. That partial recovery was offset by softer outcomes in its construction and consumer sub-sectors and by persistently weak demand in its energy solutions line.
Within Health & Protection, volumes began to show signs of recovery in the fourth quarter, although margins in that division remained weak. The company confirmed that free cash flow for the full year was positive.
Synthomer now expects net debt to be approximately £575 million at year-end, an outcome the company said was better than analyst expectations around £600 million. Management linked the stronger net debt position to disciplined profit and cash management and noted a recent £50 million receivables facility agreed with KLK group as a contributing factor. Covenant leverage at December 31, 2025, was reported at between 4.7x and 4.8x, within the 5.25x covenant requirement.
Looking toward fiscal 2026, management signalled expectations for year-over-year improvement driven primarily by self-help measures and targeted product investment within Adhesives & Synthetics. However, the company cautioned that gains from margin progression in specialties and increased volumes in Health & Protection are likely to be partially offset by wage inflation and accruals for bonuses.
Key elements of the trading update include a modest earnings shortfall relative to consensus, offsetting factors on margins and a stronger-than-expected leverage outcome. The update presents a mixed picture for stakeholders: operational discipline and cash management have improved the balance sheet, while revenue and certain end-market demands remain subdued.