May 16, 2013 / 9:11 AM / in 5 years

UPDATE 1-Synthomer says profit hit by weak demand from construction in Europe

* Says volumes in Europe, N America fall 7 pct in March, April

* Shares fall 10 pct (Adds analyst comment, updates share movement)

May 16 (Reuters) - British chemical maker Synthomer Plc said its profit so far this year was lower than the same period in 2012 due to weak demand in Europe, particularly in the construction industry, sending it shares down 10 percent.

Synthomer, formerly known as Yule Catto & Co, said sales volumes in its Europe and North America business fell 7 percent in March and April from a year earlier as a prolonged winter in Europe hit demand in the construction industry.

The company, whose chemicals are also used in the adhesive, textile and pharmaceutical businesses, generates more than half of its revenue from Western Europe.

However, the company said demand in Asia and its “rest of the world” division was ahead of its expectations and would partially offset the decline in Europe.

The specialty polymer maker said it expected full-year nitrile operating profit to be ahead of last year. Nitrile is a speciality chemical used in the manufacturing of latex - a very fine quality of rubber.

Numis Securities analyst Charles Pick said the company’s statement was disappointing and would lead brokerages to cut their estimate for pretax profit by 3 million-4 million pounds for the year.

“The detail is hazy for now on why Europe has disappointed and the reverse for Asian NBR latex,” Pick said in a note while cutting the stock’s rating to “add” from “buy”.

Synthomer’s shares were down about 10 percent at 201.7 pence at 0857 GMT on the London Stock Exchange on Thursday. (Reporting by Karen Rebelo in Bangalore; Editing by Don Sebastian)

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