AGM Statement
Yule Catto & Co PLC
17 May 2007
Yule Catto & Co plc
AGM Statement
Yule Catto is an international producer of speciality chemicals, supplied to
global customers for use in a wide range of industries including
pharmaceuticals, FMCG, paints and adhesives
At today's Annual General Meeting of Yule Catto & Co plc to be held at 12 noon
at 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-term
development of the Group. Our water-based Polymer business delivered another
solid performance with strong volume and profit growth. This performance
confirms our strategy of geographical expansion around our existing business
hubs in Europe, Asia, the Middle East and South Africa and focusing on market
sectors where our product technology and manufacturing capabilities give us real
competitive advantage.
Our Pharmaceutical business continued to increase the range of generic and
ethical products that it plans to manufacture and registered a further 7 drug
master files in the year. Sales grew 9% on a year on year basis.
The Performance Chemicals businesses had a difficult year. As previously
announced, we implemented plans to restructure significantly these businesses to
reduce costs and focus on market segments offering better margins and growth.
Overall, underlying profit before taxation reduced to £31.5 million as a result
of the difficulties in our Performance Chemicals businesses.
I would like to thank all our employees everywhere for their commitment and
their contribution towards the company's success.
First Quarter Operating Performance
2007 has started positively, with our un-audited management accounts showing
revenues and profits in-line with expectations. First quarter pre-tax profit in
all three operating divisions is ahead of the prior year corresponding period.
Within Polymer Chemicals we continue to see strong volume growth for both our
Dispersion and Latex product ranges. In particular demand for our products from
the synthetic glove market continues to grow at double-digit rates. New
capacity targeted at supporting this market was commissioned successfully in
late March and is now fully utilised. As previously announced we have
sanctioned further capacity to be operable early in 2008.
Our Pharma and Fine Chemical division has seen continued growth as an increasing
range of pharmaceutical intermediates reach commercial production. Zolpidem has
now come off patent and we are working with our customers to actively
participate in this market.
Within Performance Chemicals our previously announced re-structuring activities
within William Blythe and James Robinson is now complete. Following the
closure of two UK sites within these operating companies, we anticipate selling
these vacated sites in the course of 2007. The current level of operating
profit 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 and
management capabilities, we are re-structuring the operations of the Group. We
will manage our businesses and present our financial results against a revised
divisional structure as follows: -
• Polymer Chemicals
This will remain unchanged from previous reporting content and as such will
include the results of our Aqueous Polymer businesses based in Europe, Asia, the
Middle East and South Africa.
• Pharma Chemicals
Previously we have reported the results of our Pharma and Fine Chemicals
businesses on a combined basis. Going forward our Fine Chemicals businesses
will be reported within a new division, Impact Chemicals. We believe our
shareholders 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 and
ethical drug formulators
• Impact Chemicals
This new division will be a consolidation of what has previously been reported
under 'Fine Chemicals' and 'Performance Chemicals'. This division will comprise
five operating companies - Holliday Pigments, William Blythe, James Robinson,
Oxford Chemicals and PFW. These businesses each serve unique markets and have
minimal operational synergies with other Group companies.
In parallel with this organisational change we have re-structured the senior
management teams who will run these three divisions.
To run the newly formed Impact Chemicals division we are pleased to be able to
announce the appointment of Derick Whyte. He will join the Group on 21 May 2007
and, with immediate effect, will become Divisional Chief Executive of Impact
Chemicals. Derick is a chartered chemist with more than 20 years experience in
the chemicals industry. Prior to joining the Company, Derick held a number of
senior management roles with ICI, latterly as President of Acheson Industries. A
priority for Derick will be to continue to improve performance and realise value
from the portfolio of operating companies within Impact Chemicals.
Mark Robbins will continue as Chief Executive of the Pharma Division. Alan Maddy
will continue as Chief Executive of the Polymer Division until his retirement in
August 2008. Andrew Lanham was promoted from within the Polymer Division to
become Polymer European Managing Director effective 1st March 2007 reporting
into Alan Maddy. All three divisional Chief Executives will be wholly
responsible for their operating performance and will report directly to the
Group Chief Executive, Adrian Whitfield.
As part of the process of strengthening group functions to support the Company's
business activities, we have also appointed Frank Siddle as Director of Group
HR. Frank joined the Group on 22nd January 2007 and previously held senior
personnel roles within Caterpillar and Volvo.
I strongly believe this new organisation structure and associated management
changes will better allow the Company to be managed in line with the issues and
opportunities each division is facing and in so doing enhance the overall
performance of the Group.
The Group's interim results to be announced in September will be presented in
accordance with these organisational changes. In order to provide a comparative
baseline for the new divisions, the 2006 interims and full year results have
been presented on this new basis and are appended to this statement as well as
being 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 5th
April 2007. Peter Welch is not standing for re-election and will cease to be a
director from the close of this meeting. We thank them both for their
considerable contribution over the past years. Searches for two new
non-executive directors are well in hand and we anticipate being in a position
to announce new appointees in the coming months.
Dato Seri Lee Oi Hian, Dato Lee Hau Hian, Alex Catto and Peter Wood are all
standing for re-election at today's meeting.
Sean Cummins resigned from the Board as of the 22nd March 2007. A search for his
replacement as Finance Director is underway. Andrew Burnett previously Group
Financial Controller has been appointed Acting Finance Director.
Pensions
As we announced in March this year, the triennial valuation of our pension
scheme is currently underway. In parallel with this valuation we have been
consulting with our workforce on the future level of benefits to be provided and
the associated contributions to be made by both employees and the Company. The
Company and its Trustees plan to submit mutually agreed future funding proposals
to the Pensions Regulator in early June. We expect this exercise to be concluded
in 2007.
Outlook
We anticipate continued good sales growth in our Polymer Division where raw
material prices remain volatile. Within Pharma Chemicals we will continue to
focus on extending our product range of generic and ethical intermediates. The
newly formed Impact Chemicals Division will focus on enhancing its overall
profitability. The performance of the individual businesses within this division
will continue to be reviewed closely and further restructuring of this division
may be required to achieve our goal of realising satisfactory value for the
Group.
17 May 2007
ENQUIRIES:
YULE CATTO Tel: 01279 442791
Adrian Whitfield, Chief Executive
COLLEGE HILL Tel: 020 7457 2020
Gareth 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 38749
Pharma & fine chemicals 45284 4936 88479 9455
Performance 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 38749
Pharma chemicals 32487 3941 64404 8133
Impact chemicals 49929 1108 93869 964
Unallocated 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 Exchange