Asian growth made chemicals group Yule Catto's first half a successful one. Moreover, March's acquisition of PolymerLatex should help offset macro-economic glitches and lift full-year earnings above expectations.
Although, smart as that deal was, PolymerLatex has complicated these figures - which include £51m of special items, largely driven by a £37m write-down on the non-core pharmaceutical business. Strip these out and underlying pre-tax profit surged 81 per cent in period to £43.5m. While, on pro forma basis - which assumes ownership of PolymerLatex for the relevant reporting periods - pre-tax profit rose 29 per cent.
Demand at the core polymers business picked up in Europe and North America during the second quarter after a sluggish start to the year. There, underlying pro forma operating profit grew 3 per cent and sales jumped 22 per cent, as big increases in raw material costs were passed on to customers. In Asia and elsewhere, sales surged 30 per cent and 60,000 tonnes of extra capacity will be brought on stream by the end of 2012 to cope with demand, especially for nitril latex used to make protective gloves.
Deutsche Bank expects full-year pre-tax profit of £81m, giving EPS of 17.78p (£58m and 21.98p in 2010).
YULE CATTO (YULC) | ||||
|---|---|---|---|---|
| ORD PRICE: | 177p | MARKET VALUE: | £602m | |
| TOUCH: | 175-177p | 12-MONTH HIGH: | 257p | Low: 136p |
| DIVIDEND YIELD: | 1.4% | PE RATIO: | 35 | |
| NET ASSET VALUE: | 93p* | NET DEBT: | 74% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p)** | Dividend per share (p) ** |
|---|---|---|---|---|
| 2010 | 332 | 40.9 | 13.6 | 1.3 |
| 2011 | 548 | -7.9 | -3.4 | 1.2 |
| % change | +65 | - | - | -8 |
Ex-div: 12 Oct Payment: 10 Nov *Includes intangible assets of £450m, or 132p a share **Adjusted for Dec 2010's rights issue | ||||
