High polymer prices dent Zotefoams earnings

Zotefoams, which makes foam used in cars and shin guards, warned its full-year pre-tax profit was likely to be 20 per cent below stock market forecasts due to a weaker-than-expected end to the first half and higher-than-previously anticipated polymer prices.

Analysts at ING Barings had expected Zotefoams to record a pre-tax profit of about £2.8m in the year to 31 December. Last year, pre-tax profit was £3.5m on sales of £23m. Shares in the company fell to their lowest in four years, falling 13.5p to 75.5p.

Zotefoams added that after a fire at its facility in Croydon in October 2000 it had now received a final settlement of £13.9m from its insurers. In March, at the time of the group's results for 2001, the group said it had received £6m. The company expects there will be about £1.5m of revenue expenses to be offset against the remaining proceeds of £7.9m. The balance of about £6.4m will be recorded as an exceptional profit before taxation in the current financial year.