Polymers manufacturer Zotefoams reported solid results for its traditionally busier first half, with specialist demand from the aviation industry helping to boost overall sales by 10 per cent. The aviation industry is proving to be an avid customer for Zotefoams' fire retardant polymers and the company will continue its round of capital investment to boost production capacity, despite the uncertainty in the eurozone.
The company's core division, Polyolefin, benefited from a mixture of falling raw materials costs and currency gains to increase turnover by 8 per cent to £22.3m and buoyed by higher margins, operating profits rose 12 per cent to £3.6m. However, the most impressive gains were seen at the high-performance polymers division (HPP), which manufacturers flame resistant foams for the aviation industry. Strong US demand meant sales at HPP rose 80 per cent to £1.72m.
Managing director David Stirling said the company would spend about £6.5m this year on capital investment, roughly double the rate of depreciation, on expanding capacity at its Croydon plant. He added that Zotefoams had not seen any real problems in its northern European markets and that its products were not confined to any particular industry.
N+1 Brewin forecasts full-year pre-tax profits of £5.9m and EPS of 12.1p, up from £5.47m and 11.8p, respectively, in 2011.
ZOTEFOAMS (ZTF) | ||||
|---|---|---|---|---|
| ORD PRICE: | 175p | MARKET VALUE: | £ 69.7m | |
| TOUCH: | 173-178p | 12-MONTH HIGH: | 187p | LOW: 102p |
| DIVIDEND YIELD: | 2.9% | PE RATIO: | 14 | |
| NET ASSET VALUE: | 93p* | NET CASH: | £1.8m | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 22.5 | 3.27 | 6.6 | 1.6 |
| 2012 | 24.8 | 3.58 | 7.3 | 1.7 |
| % change | +10 | +9 | +11 | +6 |
Ex-div: 12 Sep Payment: 11 Oct *Includes intangible assets of £5.59m, or 14p a share | ||||
