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Yule Catto & Co. (SYNT)

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Wednesday 27 June, 2012

Yule Catto & Co.

Trading Statement

RNS Number : 2108G
Yule Catto & Co PLC
27 June 2012
 



27 June 2012

 

Yule Catto & Co plc (the "Group") 

 

Pre-Close Trading Update

 

Yule Catto & Co plc ("Yule Catto" or the "Group"), the international producer of speciality chemicals, today issues a trading update in advance of entering its close period.

 

The challenging trading conditions outlined at the time of the Group's May Interim Management Statement have continued through the remainder of the first half of the year.

 

In our Europe and North America business segment, demand remains subdued, driven by continuing economic uncertainty and its effect on general business confidence. Demand is currently a little weaker than the first few months of the year, with business in the construction related sector continuing to be the weakest area of activity.  Margin management has fully compensated for the volume declines, and our European business is benefitting from the synergies of the PolymerLatex acquisition at the expected levels.

 

In Asia and ROW, the Group's non-nitrile businesses are performing well.   In nitrile, the weakness in end market demand continues.  This, combined with the effect of recent capacity additions has led to increasingly aggressive competitor pricing and a further weakening of profitability in nitrile.  Additional competitive capacity is also due on stream during the course of the summer.  The Board remains confident in the long term value that the Group will derive from this high growth sector. However, given the overall supply demand position, competitive behaviour and the volatility in trading caused by rapidly changing input prices, the Board now anticipates the current weakness in nitrile will probably continue throughout the remainder of this year and into next year.  This will substantially lower operating profit in our Asia and ROW business segment while this persists.

 

The impact of currency remains uncertain, with the volatility in the euro.  Based on current exchange rates, the Board anticipates a reduction to operating profit of some £5 million from translation consistent with the guidance on currency issued with the Group's IMS in May.

 

While the combination of weakness in nitrile and currency translation effects will impact the Group's performance, the Board still anticipates that full year underlying profit before tax will be ahead of prior year pro-forma.

 

Yule Catto will announce interim results for the six months to 30 June 2012 on Tuesday 28 August 2012.

 

Ends

 

 Enquiries:

 

 

Yule Catto & Co plc

Tel: 01279 442791

Adrian Whitfield, Chief Executive

 

David Blackwood, Group Finance Director

 

 

 

 

MHP Communications

Tel: 020 3128 8100

Andrew Jaques

 

John Olsen

 

Naomi Lane

 

 


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