Umeco posts strong results prior to US acquisition
COMPOSITES group Umeco has seen full year revenue grow by 7.5% in its final set of annual figures before being acquired by US firm Cytec Holdings in a deal worth £274m.
Revenue came in at £223m (2011: £207.4m) with adjusted operating profit up 11.3% to £21.7m (2011: £19.5m), a performance which it said reflected strong growth in its aerospace activities although partially offset by weakness in the wind energy sector.
Adjusted pre-tax profit saw a rise of 23.8% but the Warwickshire firm said that in keeping with the terms of the Cytec offer it would not be making any final dividend.
Under the terms of the acquisition, Umeco shareholders will be entitled to receive 550p in cash for each Umeco share, valuing the entire issued and to be issued share capital of Umeco at approximately £274m. The consideration of 550p in cash for each Umeco share represents a premium of approximately 46.3% on the closing price of 376p per Umeco share on April 11, 2012 – the last dealing day prior to announcement of the proposed acquisition.
Shareholders have already overwhelmingly voted in favour of the offer and the acquisition is expected to complete on July 20, 2012.
Neil Johnson, chairman, said: “As Umeco enters a new phase in its long history it is well positioned in growing markets with an experienced management team focused on the future growth prospects. The offer from Cytec of 550p per Umeco share represents a valuation that reflects this potential whilst providing certainty, in cash, to Umeco shareholders.”
On annual performance, chief executive Andrew Moss said despite the major upheaval of the year – which also saw the disposal of its Pattonair supply chain operation in a £145m deal – the group had done well, with profits in line with expectations.
“During the year we made significant progress with the successful disposal of supply chain enabling us to focus on enhancing our position as a leading global composite materials and solutions business. We also acquired high quality assets for our new business in Germany and opened our joint venture in China, giving us a foothold in the world’s largest wind energy market,” he said.
“Whilst we need to be vigilant in an uncertain macroeconomic environment, Umeco is in good shape to enjoy the structural growth opportunities for advanced composite materials”
The year saw some notable highlights for the operation. In its automotive business, the UK and US businesses enjoyed strong growth and are active on a number of projects. High profile use of composite materials included both GTA Motor’s ‘Spano’ Super Sports Car and Koenigsegg’s Agera R Hypercar, which recently broke a world speed record.
