17th May 2007 07:01
Yule Catto & Co PLC17 May 2007 Yule Catto & Co plc AGM Statement Yule Catto is an international producer of speciality chemicals, supplied toglobal customers for use in a wide range of industries includingpharmaceuticals, FMCG, paints and adhesives At today's Annual General Meeting of Yule Catto & Co plc to be held at 12 noonat Saddlers' Hall, 40 Gutter Lane, London EC2V 6BR, Anthony Richmond-Watson,Chairman, will make the following comments: Throughout 2006 we continued to implement our plans for the long-termdevelopment of the Group. Our water-based Polymer business delivered anothersolid performance with strong volume and profit growth. This performanceconfirms our strategy of geographical expansion around our existing businesshubs in Europe, Asia, the Middle East and South Africa and focusing on marketsectors where our product technology and manufacturing capabilities give us realcompetitive advantage. Our Pharmaceutical business continued to increase the range of generic andethical products that it plans to manufacture and registered a further 7 drugmaster files in the year. Sales grew 9% on a year on year basis. The Performance Chemicals businesses had a difficult year. As previouslyannounced, we implemented plans to restructure significantly these businesses toreduce costs and focus on market segments offering better margins and growth. Overall, underlying profit before taxation reduced to £31.5 million as a resultof the difficulties in our Performance Chemicals businesses. I would like to thank all our employees everywhere for their commitment andtheir contribution towards the company's success. First Quarter Operating Performance 2007 has started positively, with our un-audited management accounts showingrevenues and profits in-line with expectations. First quarter pre-tax profit inall three operating divisions is ahead of the prior year corresponding period. Within Polymer Chemicals we continue to see strong volume growth for both ourDispersion and Latex product ranges. In particular demand for our products fromthe synthetic glove market continues to grow at double-digit rates. Newcapacity targeted at supporting this market was commissioned successfully inlate March and is now fully utilised. As previously announced we havesanctioned further capacity to be operable early in 2008. Our Pharma and Fine Chemical division has seen continued growth as an increasingrange of pharmaceutical intermediates reach commercial production. Zolpidem hasnow come off patent and we are working with our customers to activelyparticipate in this market. Within Performance Chemicals our previously announced re-structuring activitieswithin William Blythe and James Robinson is now complete. Following theclosure of two UK sites within these operating companies, we anticipate sellingthese vacated sites in the course of 2007. The current level of operatingprofit exceeds that in the corresponding period, on a reduced level of sales. Organisation Restructuring and Management Appointments Following an extensive review of our existing organisational structure andmanagement capabilities, we are re-structuring the operations of the Group. Wewill manage our businesses and present our financial results against a reviseddivisional structure as follows: - • Polymer Chemicals This will remain unchanged from previous reporting content and as such willinclude the results of our Aqueous Polymer businesses based in Europe, Asia, theMiddle East and South Africa. • Pharma Chemicals Previously we have reported the results of our Pharma and Fine Chemicalsbusinesses on a combined basis. Going forward our Fine Chemicals businesseswill be reported within a new division, Impact Chemicals. We believe ourshareholders will welcome the increased clarity this new reporting will bring.Our Pharma business operates 4 plants in 3 countries - Spain (2), Mexico (1),Italy (1), and supplies active pharmaceutical intermediates to both generic andethical drug formulators • Impact Chemicals This new division will be a consolidation of what has previously been reportedunder "Fine Chemicals" and "Performance Chemicals". This division will comprisefive operating companies - Holliday Pigments, William Blythe, James Robinson,Oxford Chemicals and PFW. These businesses each serve unique markets and haveminimal operational synergies with other Group companies. In parallel with this organisational change we have re-structured the seniormanagement teams who will run these three divisions. To run the newly formed Impact Chemicals division we are pleased to be able toannounce the appointment of Derick Whyte. He will join the Group on 21 May 2007and, with immediate effect, will become Divisional Chief Executive of ImpactChemicals. Derick is a chartered chemist with more than 20 years experience inthe chemicals industry. Prior to joining the Company, Derick held a number ofsenior management roles with ICI, latterly as President of Acheson Industries. Apriority for Derick will be to continue to improve performance and realise valuefrom the portfolio of operating companies within Impact Chemicals. Mark Robbins will continue as Chief Executive of the Pharma Division. Alan Maddywill continue as Chief Executive of the Polymer Division until his retirement inAugust 2008. Andrew Lanham was promoted from within the Polymer Division tobecome Polymer European Managing Director effective 1st March 2007 reportinginto Alan Maddy. All three divisional Chief Executives will be whollyresponsible for their operating performance and will report directly to theGroup Chief Executive, Adrian Whitfield. As part of the process of strengthening group functions to support the Company'sbusiness activities, we have also appointed Frank Siddle as Director of GroupHR. Frank joined the Group on 22nd January 2007 and previously held seniorpersonnel roles within Caterpillar and Volvo. I strongly believe this new organisation structure and associated managementchanges will better allow the Company to be managed in line with the issues andopportunities each division is facing and in so doing enhance the overallperformance of the Group. The Group's interim results to be announced in September will be presented inaccordance with these organisational changes. In order to provide a comparativebaseline for the new divisions, the 2006 interims and full year results havebeen presented on this new basis and are appended to this statement as well asbeing available to view on the Company's website as of today's date. Board Changes As previously announced, Dr M J Peagram stood down as Deputy Chairman on 5thApril 2007. Peter Welch is not standing for re-election and will cease to be adirector from the close of this meeting. We thank them both for theirconsiderable contribution over the past years. Searches for two newnon-executive directors are well in hand and we anticipate being in a positionto announce new appointees in the coming months. Dato Seri Lee Oi Hian, Dato Lee Hau Hian, Alex Catto and Peter Wood are allstanding for re-election at today's meeting. Sean Cummins resigned from the Board as of the 22nd March 2007. A search for hisreplacement as Finance Director is underway. Andrew Burnett previously GroupFinancial Controller has been appointed Acting Finance Director. Pensions As we announced in March this year, the triennial valuation of our pensionscheme is currently underway. In parallel with this valuation we have beenconsulting with our workforce on the future level of benefits to be provided andthe associated contributions to be made by both employees and the Company. TheCompany and its Trustees plan to submit mutually agreed future funding proposalsto the Pensions Regulator in early June. We expect this exercise to be concludedin 2007. Outlook We anticipate continued good sales growth in our Polymer Division where rawmaterial prices remain volatile. Within Pharma Chemicals we will continue tofocus on extending our product range of generic and ethical intermediates. Thenewly formed Impact Chemicals Division will focus on enhancing its overallprofitability. The performance of the individual businesses within this divisionwill continue to be reviewed closely and further restructuring of this divisionmay be required to achieve our goal of realising satisfactory value for theGroup. 17 May 2007 ENQUIRIES: YULE CATTO Tel: 01279 442791Adrian Whitfield, Chief Executive COLLEGE HILL Tel: 020 7457 2020Gareth David APPENDIX Reclassified Segmental Financial Analysis Segments as previously reported Underlying performance 6 months ended 30 June 2006 Year ended 30 December 2006 Group sales Operating Group sales Operating profit profit £000 £000 £000 £000 Polymer chemicals 199419 20300 399084 38749Pharma & fine chemicals 45284 4936 88479 9455Performance chemicals 37132 113 69794 (358)Unallocated corporate expenses (2896) (4887) 281,835 22,453 557,357 42,959 Restatement to new segments Underlying performance 6 months ended 30 June 2006 Year ended 30 December 2006 Group sales Operating Group sales Operating profit profit £000 £000 £000 £000 Polymer chemicals 199419 20300 399084 38749Pharma chemicals 32487 3941 64404 8133Impact chemicals 49929 1108 93869 964Unallocated corporate expenses (2896) (4887) 281,835 22,453 557,357 42,959 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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