19 October 2009 12:05 [Source: ICIS news]
LONDON (ICIS news)--Yule Catto's third-quarter financial performance, helped by cost-control measures and the weak pound, exceeded its board's expectations, the ?xml:namespace>
In a management statement for the period 1 July to 30 September 2009, the company said it expected full-year underlying group pre-tax profit to substantially exceed that achieved in 2008.
Yule Catto said its cost-reduction initiatives had delivered as planned and it had made good progress on lowering net debt, which fell further during the quarter.
The group repaid the £33m (€36m, $54m) current instalment of its term loans, without recourse to its three-year, £30m revolving bank loan facility arranged in December 2008, which remained undrawn as at the end of September.
However, Yule Catto said material uncertainty still remained about the global economic situation and it was cautious about next year’s volume development.
"Raw material price rises are putting pressure on margins, and we are working to recover this through selling prices and this looks likely to persist throughout 2010," the company said.
“There has been some customer restocking during the first nine months, and whilst Polymer volumes will be ahead for the fourth quarter, we remain cautious about volume development in 2010,” Yule Catto added.
In August, Yule Catto reported a first-half net profit increase of 14% to £19.9m on the same period in 2008 due to the weaker sterling, lower feedstock prices and cost reduction, despite total sales falling 9.9% year on year to £269.7m as demand dropped off for polymers.
On Monday, the company's shares were trading at 161.50p on the London Stock Exchange at 10:58 local time, up 9.86% on the last close.
($1 = €0.67, €1 = £0.91)
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