28 June 2012 14:19 [Source: ICIS news]
LONDON (ICIS)--UBS has lowered its target share price for UK-based specialty chemicals firm Yule Catto to £1.77 (€2.21, $2.77) from £2.60, following the company’s bleak trading outlook, the investment bank said on Thursday.
On Wednesday, Yule Catto released a trading update which said it is expecting a £5m drop in operating profits due to falling demand and continued economic uncertainty.
“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,” said Yule Catto.
The company added that in its Europe and ?xml:namespace>
“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,” the company said.
UBS said that trading in nitrile butadiene rubber (NBR) in
In its trading statement, Yule Catto said weakness in end-market demand for NBR is continuing.
“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 company said.
At 12:40 GMT, Yule Catto’s shares were trading at £1.36 on the London Stock Exchange, down 1.45% on the previous close.
(€1 = £0.80, $1 = £0.64)
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