Poor prospects take shine off Yorkshire

SHARES in Yorkshire Chemicals fell yesterday despite news that profits before tax have expanded by 29 per cent.

The negative City reaction followed a gloomy review of trading prospects by Yorkshire's chairman, Philip Lowe, who said: 'Market conditions are unlikely to improve in 1994. It will be well into 1995 before things will get any better.'

The company specialises in making dyes for the textiles industry and leather-treatment products.

Mr Lowe said volumes were recovering slowly but that while overall turnover grew during the year, sales declined in its largest operational arena, Continental Europe, because of recession. .

He added that the group suffered from pricing pressures and said the market for textile dyes was particularly competitive.

Taxable profits for the year to 31 December grew to pounds 13m from pounds 10.1m. However, about a third of the increase was due to favourable movements in exchange rates. The pre-tax line was also flattered by pounds 900,000 of interest received following a rights issue in February 1993 that raised pounds 24m.

Debt gearing was reduced to zero from 21 per cent. Earnings per share rose to 21p from 17.9p. Yorkshire is paying a 5.5p final dividend, making a total for the year of 8.1p (7.5p).

Analysts forecast that Yorkshire will make taxable profits of pounds 15m this year, equivalent to earnings per share of about 23p.

At yesterday's closing price of 459p, down 11p, the shares are trading on a price/earnings ratio of 19, in line with the sector but ahead of the stock market average of 15.5.