Overseas business boosts Yule Catto's profits

As Yule Catto reports half year results ahead of market forecasts Graham Spooner, investment adviser at The Share Centre, explains what this means for investors.

"Yule Catto announced positive figures this morning with pre-tax profits increasing to £43.5m and sales rising by 65%. However, a goodwill impairment and acquisition costs means the speciality chemical group faces a pre-tax loss of £7.9m for the period to 30 June.

"Growth seeking investors will be pleased to hear the company's figures were boosted by its PolymerLatex business that was acquired in December and full year earnings are now predicted to be ahead of expectations. The company's Asian business has also been improving and strong demand in the region contributed to the sharp rise in profits.

"Investors wanting exposure to a specialist area may wish to look at Yule Catto. The company's acquisition into Germany and its potential for improving emerging market sales are attractive for investors. The recent market downturn has seen the share price fall sharply from its July high of 250p to 174p and we recommend investors take advantage of this and ‘buy' on the weakness."