Zotefoams

Specialist foams maker Zotefoams is cautiously optimistic after lifting first-half pre-tax profits 83% to £2.9m on turnover up 26% to £19.6m.

Steered by managing director David Stirling, the Croydon-based company, which makes foams in the UK and USA for uses rangng from motor, packaging and sports to construction and medical, turned net debt of £1.6m into net cash of £200,000 and absorbed a 42% sterling increase in the cost of its major raw material.

Chairman Nigel Howard says fully-listed Zotefoams pushed sales of polyolefin foams 27% higher in the six months to June, while high performance polymers (HPP) sales rose 48%. With strong demand in Northern Europe offsetting a decline in Spain and UK sales recovering by 14%, North American sales increased 27% and sales volumes in Asia surged 74%, so that Asian polyolefin sales now account for 5% of the group total and are 'growing strongly'.

According to Howard, shipments from July and orders for August show 'strong growth' against a year ago. He says HPP sales growth is underpinned by orders already received and describes the company as 'cautious about macro-economic conditions but confident in the position of Zotefoams within its markets'.

Analysts see full-year pre-tax profits rising 38% to £4.4m, with £4.6m on the cards for 2011. A maintained dividend of 1.5p a share implies a yield of some 4%.

Recommended by Growth Company Investor at 59.5p last year, Zotefoam shares have now reached 111p. They could have more mileage left.