High input costs continue to hurt Zotefoams

5th Jul 2011 10:08

High-performance foams supplier Zotefoams recorded a 10% rise in like-for-like sales, in the six months to 30 June.The rise, which excludes the consolidation of MuCell Extrusion, was driven by growth in its Azotec polyolefin foam products, which has uses in packaging, construction and automotive applications and added that trading is in line with expectations. However, shares of the foam maker sank more than 7% in London in early morning trade as raw material prices continued to weigh on profits.The company confirmed that raw material prices have been "significantly higher" than last year with certain supply related issues caused by high levels of market demand for polymer products worldwide. Last year, Zotefoams' profits increase was partially offset by rising polymer prices. Zotefoams said this has impacted margins in the short term but sees operational improvements and the benefit of sales price increases adding to the business. For the six months ended 30 June 2011, the company said revenue from its high-performance polymers, which will depend on the phasing of relatively large shipments, are at a similar level to that experienced in the first half of 2010.Shares were trading down 6.9% at 141p in London. AR